[Title 19 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2005 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



          19


          Parts 0 to 140

                         Revised as of April 1, 2005


          Customs Duties
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2005
          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                                                   3
  Finding Aids:
      Table of CFR Titles and Chapters........................     725
      Alphabetical List of Agencies Appearing in the CFR......     743
      Chapter I Subject Index.................................     753
      List of CFR Sections Affected...........................     849

[[Page iv]]





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

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 19 CFR 0.1 refers to 
                       title 19, part 0, section 
                       1.

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

[[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 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    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
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
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LEGAL STATUS

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HOW TO USE THE CODE OF FEDERAL REGULATIONS

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collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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OBSOLETE PROVISIONS

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[[Page vii]]

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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 2005.

[[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, 2005.

    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, Ruth Green was Chief Editor. The Code of Federal 
Regulations publication program is under the direction of Frances D. 
McDonald, assisted by Alomha S. Morris.

[[Page 1]]



                        TITLE 19--CUSTOMS DUTIES




                   (This book contains parts 0 to 140)

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

chapter i--Bureau of Customs and Border Protection, 
  Department of Homeland Security, Department of the 
  Treasury..................................................           0

[[Page 3]]



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




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


  Editorial Note: Nomenclature changes to chapter I appear at T.D. 95-
77, 60 FR 50021, Sept. 27, 1995.
Part                                                                Page
0               Transferred or delegated authority..........           5
1-3             [Reserved]
4               Vessels in foreign and domestic trades......           7
7               Customs relations with insular possessions 
                    and Guantanamo Bay Naval Station........          75
10              Articles conditionally free, subject to a 
                    reduced rate, etc.......................          81
11              Packing and stamping; marking...............         252
12              Special classes of merchandise..............         257
18              Transportation in bond and merchandise in 
                    transit.................................         316
19              Customs warehouses, container stations and 
                    control of merchandise therein..........         334
24              Customs financial and accounting procedure..         370
54              Certain importations temporarily free of 
                    duty....................................         424
101             General provisions..........................         426
102             Rules of origin.............................         439
103             Availability of information.................         480
111             Customs brokers.............................         502
112             Carriers, cartmen, and lightermen...........         526
113             Customs bonds...............................         534
114             Carnets.....................................         560
115             Cargo container and road vehicle 
                    certification pursuant to international 
                    customs conventions.....................         565
118             Centralized examination stations............         575
122             Air Commerce regulations....................         580
123             Customs relations with Canada and Mexico....         638
125             Cartage and lighterage of merchandise.......         666
127             General order, unclaimed, and abandoned 
                    merchandise.............................         670

[[Page 4]]

128             Express consignments........................         679
132             Quotas......................................         683
133             Trademarks, trade names, and copyrights.....         691
134             Country of origin marking...................         706
135-140         [Reserved]

[[Page 5]]



PART 0_TRANSFERRED OR DELEGATED AUTHORITY--Table of Contents




Sec.
0.1 Customs revenue function regulations issued under the authority of 
          the Departments of the Treasury and Homeland Security.
0.2 All other Customs Regulations issued under the authority of the 
          Department of Homeland Security.

Appendix to Part 0--Treasury Department Order No. 100-16

    Authority: 5 U.S.C. 301, 6 U.S.C. 101 et seq., 19 U.S.C. 66, 19 
U.S.C. 1624, 31 U.S.C. 321.

    Source: CBP Dec. 03-24, 68 FR 51869, Aug. 28, 2003, unless otherwise 
noted.



Sec. 0.1  Customs revenue function regulations issued under the authority 
of the Departments of the Treasury and Homeland Security.

    (a) Regulations requiring signatures of Treasury and Homeland 
Security. (1) By Treasury Department Order No. 100-16, set forth in the 
appendix to this part, the Secretary of the Treasury has delegated to 
the Secretary of Homeland Security the authority to prescribe all 
Customs regulations relating to customs revenue functions, except that 
the Secretary of the Treasury retains the sole authority to approve such 
Customs regulations concerning subject matters listed in paragraph 
1(a)(i) of the order. Regulations for which the Secretary of the 
Treasury retains the sole authority to approve will be signed by the 
Secretary of Homeland Security (or his or her DHS delegate), and by the 
Secretary of the Treasury (or his or her Treasury delegate) to indicate 
approval.
    (2) When a regulation described in paragraph (a)(1) of this section 
is published in the Federal Register, the preamble of the document 
accompanying the regulation will clearly indicate that it is being 
issued in accordance with paragraph (a)(1) of this section.
    (b) Regulations with respect to which the Department of Homeland 
Security is authorized to sign for the Department of the Treasury. (1) 
By Treasury Department Order No. 100-16, set forth in the appendix to 
this part, the Secretary of the Treasury delegated to the Secretary of 
Homeland Security the authority to prescribe and approve regulations 
relating to customs revenue functions on behalf of the Secretary of the 
Treasury when the subject matter of the regulations is not listed in 
paragraph 1(a)(i) of the order. Such regulations are the official 
regulations of both Departments notwithstanding that they are not signed 
by an official of the Department of the Treasury. These regulations will 
be signed by the Secretary of Homeland Security (or his or her DHS 
delegate).
    (2) When a regulation described in paragraph (b)(1) of this section 
is published in the Federal Register, the preamble of the document 
accompanying the regulation will clearly indicate that it is being 
issued in accordance with paragraph (b)(1) of this section.
    (c) Sole signature by Secretary of the Treasury. (1) Pursuant to 
Treasury Department Order No. 100-16, set forth in the appendix to this 
part, the Secretary of the Treasury reserves the right to promulgate 
regulations related to the customs revenue functions. Such regulations 
are signed by the Secretary of the Treasury (or his or her delegate) 
after consultation with the Secretary of Homeland Security (or his or 
her delegate), and are the official regulations of both Departments.
    (2) When a regulation described in paragraph (c)(1) of this section 
is published in the Federal Register, the preamble of the document 
accompanying the regulation will clearly indicate that the regulation is 
being issued in accordance with paragraph (c)(1) of this section.



Sec. 0.2  All other Customs regulations issued under the authority of 
the Department of Homeland Security.

    (a) The authority of the Secretary of the Treasury with respect to 
Customs regulations that are not related to customs revenue functions 
was transferred to the Secretary of Homeland Security pursuant to 
section 403(1) of the Homeland Security Act of 2002. Such regulations 
are signed by the Secretary of Homeland Security (or his or her 
delegate) and are the official regulations of the Department of Homeland 
Security.

[[Page 6]]

    (b) When a regulation described in paragraph (a) of this section is 
published in the Federal Register, the preamble accompanying the 
regulation shall clearly indicate that it is being issued in accordance 
with paragraph (a) of this section.

     Appendix to 19 CFR Part 0--Treasury Department Order No. 100-16

    Delegation from the Secretary of the Treasury to the Secretary of 
Homeland Security of general authority over Customs revenue functions 
vested in the Secretary of the Treasury as set forth in the Homeland 
Security Act of 2002.

Treasury Department, Washington, DC,
May 15, 2003.

    By virtue of the authority vested in me as the Secretary of the 
Treasury, including the authority vested by 31 U.S.C. 321(b) and section 
412 of the Homeland Security Act of 2002 (Pub. L. 107-296) (Act), it is 
hereby ordered:
    1. Consistent with the transfer of the functions, personnel, assets, 
and liabilities of the United States Customs Service to the Department 
of Homeland Security as set forth in section 403(1) of the Act, there is 
hereby delegated to the Secretary of Homeland Security the authority 
related to the Customs revenue functions vested in the Secretary of the 
Treasury as set forth in sections 412 and 415 of the Act, subject to the 
following exceptions and to paragraph 6 of this Delegation of Authority:
    (a)(i) The Secretary of the Treasury retains the sole authority to 
approve any regulations concerning import quotas or trade bans, user 
fees, marking, labeling, copyright and trademark enforcement, and the 
completion of entry or substance of entry summary including duty 
assessment and collection, classification, valuation, application of the 
U.S. Harmonized Tariff Schedules, eligibility or requirements for 
preferential trade programs, and the establishment of recordkeeping 
requirements relating thereto. The Secretary of Homeland Security shall 
provide a copy of all regulations so approved to the Chairman and 
Ranking Member of the Committee on Ways and Means and the Chairman and 
Ranking Member of the Committee on Finance every six months.
    (ii) The Secretary of the Treasury shall retain the authority to 
review, modify, or revoke any determination or ruling that falls within 
the criteria set forth in paragraph 1(a)(i), and that is under 
consideration pursuant to the procedures set forth in sections 516 and 
625(c) of the Tariff Act of 1930, as amended (19 U.S.C. 1516 and 
1625(c)). The Secretary of Homeland Security periodically shall identify 
and describe for the Secretary of the Treasury such determinations and 
rulings that are under consideration under sections 516 and 625(c) of 
the Tariff Act of 1930, as amended, in an appropriate and timely manner, 
with consultation as necessary, prior to the Secretary of Homeland 
Security's exercise of such authority. The Secretary of Homeland 
Security shall provide a copy of these identifications and descriptions 
so made to the Chairman and Ranking Member of the Committee on Ways and 
Means and the Chairman and Ranking Member of the Committee on Finance 
every six months. The Secretary of the Treasury shall list any case 
where Treasury modified or revoked such a determination or ruling.
    (b) Paragraph 1(a) notwithstanding, if the Secretary of Homeland 
Security finds an overriding, immediate, and extraordinary security 
threat to public health and safety, the Secretary of Homeland Security 
may take action described in paragraph 1(a) without the prior approval 
of the Secretary of the Treasury. However, immediately after taking any 
such action, the Secretary of Homeland Security shall certify in writing 
to the Secretary of the Treasury and to the Chairman and Ranking Member 
of the Committee on Ways and Means and the Chairman and Ranking Member 
of the Committee on Finance the specific reasons therefor. The action 
shall terminate within 14 days or as long as the overriding, immediate, 
and extraordinary security threat exists, whichever is shorter, unless 
the Secretary of the Treasury approves the continued action and provides 
notice of such approval to the Secretary of Homeland Security.
    (c) The Advisory Committee on Commercial Operations of the Customs 
Service (COAC) shall be jointly appointed by the Secretary of the 
Treasury and the Secretary of Homeland Security. Meetings of COAC shall 
be presided over jointly by the Secretary of the Treasury and the 
Secretary of Homeland Security. The COAC shall advise the Secretary of 
the Treasury and the Secretary of Homeland Security jointly.
    2. Any references in this Delegation of Authority to the Secretary 
of the Treasury or the Secretary of Homeland Security are deemed to 
include their respective delegees, if any.
    3. This Delegation of Authority is not intended to create or confer 
any right, privilege, or benefit on any private person, including any 
person in litigation with the United States.
    4. Treasury Order No. 165-09, ``Maintenance of delegation in respect 
to general authority over Customs Revenue functions vested in the 
Secretary of the Treasury, as set forth and defined in the Homeland 
Security Act of 2002,'' dated February 28, 2003, is rescinded. To the 
extent this Delegation of Authority requires any revocation of any other 
prior Order or Directive of the Secretary of the Treasury, such prior 
Order or Directive is hereby revoked.

[[Page 7]]

    5. This Delegation of Authority is effective May 15, 2003. This 
Delegation is subject to review on May 14, 2004. By March 15, 2004, the 
Secretary of the Treasury and the Secretary of Homeland Security shall 
consult with the Chairman and Ranking Member of the Committee on Ways 
and Means and the Chairman and Ranking Member of the Committee on 
Finance to discuss the upcoming review of this Delegation.
    6. The Secretary of the Treasury reserves the right to rescind or 
modify this Delegation of Authority, promulgate regulations, or exercise 
authority at any time based upon the statutory authority reserved to the 
Secretary by the Act.

John W. Snow, Secretary of the Treasury.

                          PARTS 1-3 [RESERVED]



PART 4_VESSELS IN FOREIGN AND DOMESTIC TRADES--Table of Contents




                      Arrival and Entry of Vessels

Sec.
4.0 General definitions.
4.1 Boarding of vessels; cutter and dock passes.
4.2 Reports of arrival of vessels.
4.3 Vessels required to enter; place of entry.
4.3a Penalties for violation of vessel reporting and entry requirements.
4.4 Panama Canal; report of arrival required.
4.5 Government vessels.
4.6 Departure or unlading before report or entry.
4.7 Inward foreign manifest; production on demand; contents and form; 
          advance filing of cargo declaration.
4.7a Inward manifest; information required; alternative forms.
4.8 Preliminary entry.
4.9 Formal entry.
4.10 Request for overtime services.
4.11 Sealing of stores.
4.12 Explanation of manifest discrepancy.
4.13 [Reserved]
4.14 Equipment purchases by, and repairs to, American vessels.
4.15 Fishing vessels touching and trading at foreign places.
4.16 [Reserved]
4.17 Vessels from discriminating countries.

                       Tonnage Tax and Light Money

4.20 Tonnage taxes.
4.21 Exemptions from tonnage taxes.
4.22 Exemptions from special tonnage taxes.
4.23 Certificate of payment and cash receipt.
4.24 Application for refund of tonnage tax.

                      Landing and Delivery of Cargo

4.30 Permits and special licenses for unlading and lading.
4.31 Unlading or transshipment due to casualty.
4.32 Vessels in distress, landing of cargo.
4.33 Diversion of cargo.
4.34 Prematurely discharged, overcarried, and undelivered cargo.
4.35 Unlading outside port of entry.
4.36 Delayed discharge of cargo.
4.37 General order.
4.38 Release of cargo.
4.39 Stores and equipment of vessels and crews' effects; unlading or 
          lading and retention on board.
4.40 Equipment, etc., from wrecked or dismantled vessels.
4.41 Cargo of wrecked vessel.

                          Passengers on Vessels

4.50 Passenger lists.
4.51 Reporting requirements for individuals arriving by vessel.
4.52 Penalties applicable to individuals.

                           Foreign Clearances

4.60 Vessels required to clear.
4.61 Requirements for clearance.
4.62 Accounting for inward cargo.
4.63 Outward cargo declaration; shippers' export declarations.
4.64 [Reserved]
4.65 Verification of nationality and tonnage.
4.65a Load lines.
4.66 Verification of inspection.
4.66a Illegal discharge of oil and hazardous substances.
4.66b Pollution of coastal and navigable waters.
4.66c Oil pollution by oceangoing vessels.
4.67 Closed ports or places.
4.68 Federal Maritime Commission certificates for certain passengers 
          vessels.
4.69 Shipping articles.
4.70 Public Health Service requirements.
4.71 Inspection of livestock.
4.72 Inspection of meat, meat-food products, and inedible fats.
4.73 Neutrality; exportation of arms and munitions.
4.74 Transportation orders.
4.75 Incomplete manifest; incomplete export declarations; bond.
4.76 Procedures and responsibilities of carriers filing outbound vessel 
          manifest information via the AES.

                           Coastwise Procedure

4.80 Vessels entitled to engage in coastwise trade.
4.80a Coastwise transportation of passengers.
4.80b Coastwise transportation of merchandise.

[[Page 8]]

4.81 Reports of arrivals and departures in coastwise trade.
4.81a Certain barges carrying merchandise transferred from another 
          barge.
4.82 Touching at foreign port while in coastwise trade.
4.83 Trade between United States ports on the Great Lakes and other 
          ports of the United States.
4.84 Trade with noncontiguous territory.
4.85 Vessels with residue cargo for domestic ports.
4.86 Intercoastal residue--cargo procedure; optional ports.
4.87 Vessels proceeding foreign via domestic ports.
4.88 Vessels with residue cargo for foreign ports.
4.89 Vessels in foreign trade proceeding via domestic ports and touching 
          at intermediate foreign ports.
4.90 Simultaneous vessel transactions.
4.91 Diversion of vessel; transshipment of cargo.
4.92 Towing.
4.93 Coastwise transportation by certain vessels of empty vans, tanks, 
          and barges, equipment for use with vans and tanks; empty 
          instruments of international traffic; stevedoring equipment 
          and material; procedures.

                                 General

4.94 Yacht privileges and obligations.
4.94a Large yachts imported for sale.
4.95 Records of entry and clearance of vessels.
4.96 Fisheries.
4.97 Salvage vessels.
4.98 Navigation fees.
4.99 Forms; substitution.
4.100 Licensing of vessels of less than 30 net tons.
4.101 Prohibitions against Customs officers and employees.

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624, 2071 
note; 46 U.S.C. App. 3, 91;
    Section 4.1 also issued under 19 U.S.C. 1581(a), 46 U.S.C. App. 163;
    Section 4.2 also issued under 19 U.S.C. 1441, 1486;
    Section 4.3 also issued under 19 U.S.C. 288, 1441; 46 U.S.C. App. 
111;
    Section 4.3a also issued under 19 U.S.C. 1433, 1436;
    Section 4.5 also issued under 19 U.S.C. 1441;
    Section 4.7 also issued under 19 U.S.C. 1581(a); 46 U.S.C. App. 
883a, 883b;
    Section 4.7a also issued under 19 U.S.C. 1498, 1584;
    Section 4.8 also issued under 19 U.S.C. 1448, 1486;
    Section 4.9 also issued under 42 U.S.C. 269;
    Section 4.10 also issued under 19 U.S.C. 1448, 1451;
    Section 4.12 also issued under 19 U.S.C. 1584;
    Section 4.14 also issued under 19 U.S.C. 1466, 1498;
    Section 4.20 also issued under 46 U.S.C. 2107(b), 8103, 14306, 
14502, 14511, 14512, 14513, 14701, 14702, 46 U.S.C. App. 121, 128;
    Section 4.21 also issued under 19 U.S.C. 1441, 46 U.S.C. App. 121-
125, 128, 129, 132, 135;
    Section 4.22 also issued under 46 U.S.C. App. 121, 128, 141;
    Section 4.24 also issued under 46 U.S.C. 2108;
    Section 4.30 also issued under 19 U.S.C. 288, 1446, 1448, 1450-1454, 
1490;
    Section 4.31 also issued under 19 U.S.C. 1453, 1586;
    Section 4.32 also issued under 19 U.S.C. 1449;
    Section 4.35 also issued under 19 U.S.C. 1447;
    Section 4.36 also issued under 19 U.S.C. 1431, 1457, 1458, 46 U.S.C. 
App. 100;
    Section 4.37 also issued under 19 U.S.C. 1448, 1457, 1490;
    Section 4.38 also issued under 19 U.S.C. 1448, 1505;
    Section 4.39 also issued under 19 U.S.C. 1446;
    Section 4.40 also issued under 19 U.S.C. 1446;
    Section 4.50 also issued under 19 U.S.C. 1431; 46 U.S.C. 3502;
    Section 4.51 also issued under 19 U.S.C. 1433;
    Section 4.52 also issued under 19 U.S.C. 1433;
    Section 4.61 also issued under 46 U.S.C. App. 883;
    Section 4.65a also issued under 46 U.S.C. 5101-5102, 5106-5109, 
5112-5114, 5116;
    Section 4.66 also issued under 46 U.S.C. App. 91;
    Section 4.66a also issued under 33 U.S.C. 1321, 46 U.S.C. App. 91;
    Section 4.66b also issued under 33 U.S.C. 407, 1321;
    Section 4.68 also issued under 46 U.S.C. App. 817d, 817e;
    Section 4.69 also issued under 46 U.S.C. 10301, 10302, 10314, and 
10315.
    Section 4.74 also issued under 46 U.S.C. App. 91;
    Section 4.75 also issued under 46 U.S.C. App. 91;
    Section 4.80 also issued under 28 U.S.C. 2461 note; 46 U.S.C. 12106; 
46 U.S.C. App. 251, 289, 319, 802, 808, 883, 883-1;
    Section 4.81 also issued under 19 U.S.C. 1442, 1486; 46 U.S.C. 251, 
883;
    Section 4.81a also issued under 46 U.S.C. App. 883;
    Section 4.82 also issued under 19 U.S.C. 293, 294, 46 U.S.C. App. 
123;
    Section 4.83 also issued under 46 U.S.C. App. 91, 111, 123;

[[Page 9]]

    Section 4.84 also issued under 46 U.S.C. App. 883-1;
    Section 4.85 also issued under 19 U.S.C. 1442, 1623;
    Section 4.86 also issued under 19 U.S.C. 1442;
    Section 4.88 also issued under 19 U.S.C. 1442, 1622, 1623;
    Section 4.92 also issued under 28 U.S.C. 2461 note; 46 U.S.C. App. 
316(a);
    Section 4.93 also issued under 19 U.S.C. 1322(a), 46 U.S.C. App. 
883;
    Section 4.94 also issued under 19 U.S.C. 1441; 46 U.S.C. App. 104;
    Section 4.94a also issued under 19 U.S.C. 1484b;
    Section 4.96 also issued under 46 U.S.C. 12101(a)(1), 12108, 46 
U.S.C. App. 251;
    Section 4.98 also issued under 31 U.S.C. 9701;
    Section 4.100 also issued under 19 U.S.C. 1706.

    Source: 28 FR 14596, Dec. 31, 1963, unless otherwise noted.

                      Arrival and Entry of Vessels



Sec. 4.0  General definitions.

    For the purposes of this part:
    (a) Vessel. The word vessel includes every description of water 
craft or other contrivance used or capable of being used as a means of 
transportation on water, but does not include aircraft. (19 U.S.C. 
1401.)
    (b) Vessel of the United States. The term vessel of the United 
States means any vessel documented under the laws of the United States.
    (c) Documented. The term documented vessel means a vessel for which 
a valid Certificate of Documentation, form CG 1270, issued by the U.S. 
Coast Guard is outstanding. Upon qualification and proper application to 
the appropriate Coast Guard office, the Certificate of Documentation may 
be endorsed with a: (1) Registry endorsement (generally, available to a 
vessel to be employed in foreign trade, trade with Guam, American Samoa, 
Wake, Midway, or Kingman Reef, and other employments for which another 
endorsement is not required), (2) coastwise endorsement (generally, 
entitles a vessel to employment in the coastwise trade, and other 
employments for which another endorsement is not required), (3) Great 
Lakes endorsement (generally, entitles a vessel to engage in the 
coastwise trade on the Great Lakes and their tributary and connecting 
waters, in trade with Canada, and in other employments for which another 
endorsement is not required), (4) fishery endorsement (generally, 
subject to federal and state laws regulating the fisheries, entitles a 
vessel to fish within the Exclusive Economic Zone (16 U.S.C. 1811) and 
landward of that zone and to land its catch) or (5) recreational 
endorsement (entitles a vessel to recreational use only). Any other 
terminology used elsewhere in this part to describe the particular 
documentation of a vessel shall be read as synonymous with the 
applicable terminology contained in this paragraph. Generally, any 
vessel of at least 5 net tons and wholly owned by a United States 
citizen or citizens is eligible for documentation except that for a 
coastwise, Great Lakes, or fisheries endorsement a vessel must also be 
built in the United States. Detailed Coast Guard regulations on 
documentation are set forth in Title 46, Code of Federal Regulations, 
Sec. 67.01-67.45.
    (d) Noncontiguous territory of the United States. The term 
noncontiguous territory of the United States includes all the island 
territories and possessions of the United States, but does not include 
the Canal Zone.
    (e) Citizen. The word citizen is as defined by the U.S. Coast Guard 
for purposes of vessel documentation (see subpart 67.03 of title 46, 
Code of Federal Regulations.)
    (f) Arrival of a vessel. The phrase ``arrival of a vessel'' means 
that time when the vessel first comes to rest, whether at anchor or at a 
dock, in any harbor within the Customs territory of the U.S.
    (g) Departure of a vessel. The phrase ``departure of a vessel'' 
means that time when the vessel gets under way on its outward voyage and 
proceeds on the voyage without thereafter coming to rest in the harbor 
from which it is going.

[T.D. 69-266, 34 FR 20422, Dec. 31, 1969, as amended by T.D. 83-214, 48 
FR 46511, Oct. 13, 1983; T.D. 93-78, 58 FR 50256, Sept. 27, 1993; T.D. 
93-96, 58 FR 67315, Dec. 21, 1993]

[[Page 10]]



Sec. 4.1  Boarding of vessels; cutter and dock passes.

    (a) Every vessel arriving at a Customs port will be subject to such 
supervision while in port as the port director considers necessary. The 
port director may detail Customs officers to remain on board a vessel to 
secure enforcement of the requirements set forth in this part. Customs 
may determine to board as many vessels as considered necessary to ensure 
compliance with the laws it enforces.
---------------------------------------------------------------------------

    \1-27\ [Reserved]
---------------------------------------------------------------------------

    (b)(1) No person, with or without the consent of the master, except 
a pilot in connection with the navigation of the vessel, personnel from 
another vessel in connection with the navigation of an unmanned barge, 
an officer of Customs or the Coast Guard, an immigration or health 
officer, an inspector of the Animal and Plant Health Inspection Service 
of the U.S. Department of Agriculture, or an agent of the vessel or 
consular officer exclusively for purposes relating to Customs 
formalities, shall go on board any vessel arriving from outside the 
Customs territory of the United States without permission of the port 
director or the Customs officer in charge until the vessel has been 
taken in charge by a Customs officer.
    (2) A person may leave the vessel for the purpose of reporting its 
arrival as required by law (see Sec. 4.2), but no other person, except 
those designated in paragraph (b)(1) of this section, shall leave any 
vessel arriving from outside the Customs territory of the United States, 
with or without the consent of the master, without the permission of the 
port director or the Customs officer in charge until the vessel has been 
properly inspected by Customs and brought into the dock or anchorage at 
which cargo is to be unladen and until all passengers have been landed 
from the vessel (19 U.S.C. 1433).
    (3) Every person permitted to go on board or to leave without the 
consent of a Customs officer under the provisions of this paragraph 
shall be subject to Customs and quarantine regulations.
    (4) The master of any vessel shall not authorize the boarding or 
leaving of his vessel by any person in violation of this paragraph.
    (c) A port director, in his discretion may issue a cutter pass on 
Customs Form 3093 to permit the holder to board an incoming vessel after 
it has been inspected by the quarantine authorities and taken in charge 
by an officer of the Customs, as follows: (1) To persons on official 
business; (2) to news reporters, newspaper photographers, photographers 
of established motionpicture companies, and broadcasters of established 
radio broadcasting cmmpanies; and (3) in cases of special exigency in 
which the port director is satisfied as to the urgent need for the 
boarding and that its allowance will not result in undue interference 
with the performance of official business.
    (d) No person in charge of a tugboat, rowboat, or other vessel shall 
bring such conveyance alongside an incoming vessel heretofore described 
and put on board thereof any person, except as authorized by law or 
regulations.
    (e) [Reserved]
    (f) Term cutter and dock passes, for a period of not to exceed one 
year, may be issued in the discretion of the port director, to persons 
on official business and to duly accredited news reporters and newspaper 
photographers. Passes are not transferable and shall be forfeited upon 
presentation by others than those to whom issued.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 78-141, 43 FR 22174, May 
24, 1978; T.D. 82-224, 47 FR 35475, Aug. 16, 1982; T.D. 92-74, 57 FR 
35751, Aug. 11, 1992; T.D. 95-77, 60 FR 50010, Sept. 27, 1995; T.D. 00-
4, 65 FR 2872, Jan. 19, 2000]



Sec. 4.2  Reports of arrival of vessels.

    (a) Upon arrival in any port or place within the U.S., including, 
for purposes of this section, the U.S. Virgin Islands, of any vessel 
from a foreign port or place, any foreign vessel from a port or place 
within the U.S., or any vessel of the U.S. carrying bonded merchandise 
or foreign merchandise for which entry has not been made, the master of 
the vessel shall immediately report that arrival to the nearest Customs 
facility or other location designated by the

[[Page 11]]

port director. The report of arrival, except as supplemented in local 
instructions issued by the port director and made available to 
interested parties by posting in Customs offices, publication in a 
newspaper of general circulation, and other appropriate means, shall be 
made by any means of communication to the port director or to a Customs 
officer assigned to board the vessel. The Customs officer may require 
the production of any documents or papers deemed necessary for the 
proper inspection/examination of the vessel, cargo, passenger, or crew.
    (b) For purposes of this part, ``foreign port or place'' includes a 
hovering vessel, as defined in 19 U.S.C. 1401(k), and any point in 
Customs waters beyond the territorial sea or on the high seas at which a 
vessel arriving in a port or place in the U.S. has received merchandise.
    (c) In the case of certain vessels arriving either in distress or 
for the limited purpose of taking on certain supplies and departing 
within a 24-hour time period without having landed or taken on any 
passengers or other merchandise (see section 441(4), Tariff Act of 1930, 
as amended), the report may be filed by either the master, owner, or 
agent, and shall be in the form and give the information required by 
that statute, except that the report need not be under oath. A derelict 
vessel shall be considered one in distress and any person bringing it 
into port may report its arrival.
    (d) The report of baggage and merchandise required to be made by 
certain passenger vessels making three or more trips a week between U.S. 
and foreign ports and vessels used exclusively as ferryboats carrying 
passengers, baggage, or merchandise (see section 441(2), Tariff Act of 
1930, as amended), is in addition to the required report of arrival, and 
shall be made within 24 hours of arrival.

[T.D. 93-96, 58 FR 67315, Dec. 21, 1993, as amended by T.D. 94-44, 59 FR 
23795, May 9, 1994]



Sec. 4.3  Vessels required to enter; place of entry.

    (a) Formal entry required. Unless specifically excepted by law, 
within 48 hours after the arrival at any port or place in the United 
States, the following vessels are required to make formal entry:
    (1) Any vessel from a foreign port or place;
    (2) Any foreign vessel from a domestic port;
    (3) Any vessel of the United States having merchandise on board 
which is being transported in-bond (not including bonded ship's stores 
or supplies), or foreign merchandise for which entry has not been made; 
or
    (4) Any vessel which has visited a hovering vessel as defined in 19 
U.S.C. 1401(k), or has delivered or received merchandise or passengers 
while outside the territorial sea.
    (b) Completion of entry. (1) When vessel entry is to be made at the 
customhouse, either the master, licensed deck officer, or purser may 
appear in person during regular working hours to complete preliminary or 
formal vessel entry; or necessary documents properly executed by the 
master or other authorized officer may be delivered at the customhouse 
by the vessel agent or other personal representative of the master.
    (2) The appropriate Customs port director may permit the entry of 
vessels to be accomplished at locations other than the customhouse, and 
services may be requested outside of normal business hours. Customs may 
take local resources into consideration in allowing formal entry to be 
transacted on board vessels or at other mutually convenient approved 
sites and times within or outside of port limits. When services are 
requested to be provided outside the limits of a Customs port, the 
appropriate port director to whom an application must be submitted is 
the director of the port located nearest to the point where the proposed 
services would be provided. That port director must be satisfied that 
the place designated for formal entry will be sufficiently under Customs 
control at the time of entry, and that the expenses incurred by Customs 
will be reimbursed as authorized. It may be required that advance notice 
of vessel arrival be given as a condition for granting requests for 
optional entry locations. A master, owner, or agent of a vessel who

[[Page 12]]

desires that entry be made at an optional location will file with the 
appropriate port director an application on Customs Form 3171 and a 
single entry or continuous bond on Customs Form 301 containing the bond 
conditions set forth in Sec. 113.64 of this chapter, in such amount as 
that port director deems appropriate but not less than $1,000. If the 
application is approved, the port director or a designated Customs 
officer will formally enter the vessel. Nothing in this paragraph 
relieves any person or vessel from any requirement as to how, when and 
where they are to report, be inspected or receive clearance from other 
Federal agencies upon arrival in the United States.

[T.D. 00-4, 65 FR 2872, Jan. 19, 2000]



Sec. 4.3a  Penalties for violation of vessel reporting and entry 
requirements.

    Violation of the arrival or entry reporting requirements provided 
for in this part may result in the master being liable for certain civil 
and criminal penalties, as provided under 19 U.S.C. 1436, in addition to 
other penalties applicable under other provisions of law. The penalties 
include civil monetary penalties for failure to report arrival or make 
entry, and any conveyance used in connection with any such violation is 
subject to seizure and forfeiture. Further, if any merchandise (other 
than sea stores or the equivalent for conveyances other than a vessel) 
is involved in the failure to report arrival or entry, additional 
penalties equal to the value of merchandise may be imposed, and the 
merchandise may be seized and forfeited unless properly entered by the 
importer or consignee. The criminal penalties, applicable upon 
conviction, include fines and imprisonment if the master intentionally 
commits any violation of these reporting and entry requirements or if 
prohibited merchandise is involved in the failure to report arrival or 
make entry.

[T.D. 93-96, 58 FR 67316, Dec. 21, 1993]



Sec. 4.4  Panama Canal; report of arrival required.

    Vessels which merely transit the Panama Canal without transacting 
any business there shall be required to report their arrival because of 
such transit. The report of arrival shall be made in accordance with 
Sec. 4.2(a).

[T.D. 79-276, 44 FR 61956, Oct. 29, 1979]



Sec. 4.5  Government vessels.

    (a) No report of arrival or entry shall be required of any vessel 
owned by, or under the complete control and management of the United 
States or any of its agencies, if such vessel is manned wholly by 
members of the uniformed services of the United States, by personnel in 
the civil service of the United States, or by both, and is transporting 
only property of the United States or passengers traveling on official 
business of the United States, or it is ballast. In addition, any vessel 
chartered by, and transporting only cargo that is the property of, the 
U.S. Department of Defense (DoD) will be treated as a Government vessel 
for the purpose of being exempt from entry, where the DoD-chartered 
vessel is manned entirely by the civilian crew of the vessel carrier 
under contract to DoD. Notwithstanding Sec. 4.60(b)(3) of this part, 
such DoD-chartered vessel is not exempt from vessel clearance 
requirements. However, if any cargo is on board, the master or commander 
of each such vessel arriving from abroad shall file a Cargo Declaration, 
Customs Form 1302, or an equivalent form issued by the Department of 
Defense, in duplicate. The original of each Cargo Declaration or 
equivalent form required under this paragraph shall be filed with the 
port director within 48 hours after the arrival of the vessel. The other 
copy shall be made available for use by the discharging inspector at the 
pier. See Sec. 148.73 of this chapter with respect to baggage on 
carriers operated by the Department of Defense.
    (b) The arrival of every vessel owned or controlled and manned as 
described in paragraph (a) of this section but transporting other 
property or passengers, and every vessel so owned or controlled but not 
so manned, whether in ballast or transporting cargo or passengers, shall 
be reported in accordance with Sec. 4.2 and the vessel shall be entered 
in accordance with Sec. 4.9.
    (c) Every vessel owned by, or under the complete control and 
management of, any foreign nation shall be exempt from or subject to the 
laws relating to

[[Page 13]]

report of arrival and entry under the same conditions as a vessel owned 
or controlled by the United States.

[28 FR 14596, Dec. 31, 1963, as amended by 39 FR 10897, Mar. 22, 1974; 
T.D. 83-213, 48 FR 46978, Oct. 17, 1983; CBP Dec. 03-32, 68 FR 68168, 
Dec. 5, 2003]



Sec. 4.6  Departure or unlading before report or entry.

    (a) No vessel which has arrived within the limits of any Customs 
port from a foreign port or place shall depart or attempt to depart, 
except from stress of weather or other necessity, without reporting and 
making entry as required in this part. These requirements shall not 
apply to vessels merely passing through waters within the limits of a 
Customs port in the ordinary course of a voyage.
    (b) The ``limits of any Customs port'' as used herein are those 
described in Sec. 101.3(b) of this chapter, including the marginal 
waters to the 3-mile limit on the seaboard and the waters to the 
boundary line on the northern and southern boundaries.
    (c) Violation of this provision may result in the master being 
liable for certain civil penalties and the vessel to arrest and 
forfeiture, as provided under 19 U.S.C. 1436, in addition to other 
penalties applicable under other provisions of law.

[T.D. 93-96, 58 FR 67316, Dec. 21, 1993, as amended by T.D. 98-74, 63 FR 
51287, Sept. 25, 1998]



Sec. 4.7  Inward foreign manifest; production on demand; contents and 
form; advance filing of cargo declaration.

    (a) The master of every vessel arriving in the United States and 
required to make entry shall have on board his vessel a manifest, as 
required by section 431, Tariff Act of 1930 (19 U.S.C. 1431), and by 
this section. The manifest shall be legible and complete. If it is in a 
foreign language, an English translation shall be furnished with the 
original and with any required copies. The manifest shall consist of a 
Vessel Entrance or Clearance Statement, Customs Form 1300, and the 
following documents: (1) Cargo Declaration, Customs Form 1302, (2) 
Ship's Stores Declaration, Customs Form 1303, (3) Crew's Effects 
Declaration, Customs Form 1304, or, optionally, a copy of the Crew List, 
Customs and Immigration Form I-418, to which are attached crewmember's 
declarations on Customs Form 5129, (4) Crew List, Customs and 
Immigration Form I-418, and (5) Passenger List, Customs and Immigration 
Form I-418. Any document which is not required may be omitted from the 
manifest provided the word ``None'' is inserted in items 16, 18, and/or 
19 of the Vessel Entrance or Clearance Statement, as appropriate. If a 
vessel arrives in ballast and therefore the Cargo Declaration is 
omitted, the legend ``No merchandise on board'' shall be inserted in 
item 16 of the Vessel Entrance or Clearance Statment.
    (b)(1) With the exception of any Cargo Declaration that has been 
filed in advance as prescribed in paragraph (b)(2) of this section, the 
original and one copy of the manifest must be ready for production on 
demand. The master shall deliver the original and one copy of the 
manifest to the Customs officer who shall first demand it. If the vessel 
is to proceed from the port of arrival to other United States ports with 
residue foreign cargo or passengers, an additional copy of the manifest 
shall be available for certification as a traveling manifest (see Sec. 
4.85). The port director may require an additional copy or additional 
copies of the manifest, but a reasonable time shall be allowed for the 
preparation of any copy which may be required in addition to the 
original and one copy.
    (2) Subject to the effective date provided in paragraph (b)(5) of 
this section, and with the exception of any bulk or authorized break 
bulk cargo as prescribed in paragraph (b)(4) of this section, Customs 
and Border Protection (CBP) must receive from the incoming carrier, for 
any vessel covered under paragraph (a) of this section, the CBP-approved 
electronic equivalent of the vessel's Cargo Declaration (Customs Form 
1302), 24 hours before the cargo is laden aboard the vessel at the 
foreign port (see Sec. 4.30(n)(1)). The current approved system for 
presenting electronic cargo declaration information to CBP is the Vessel 
Automated Manifest System (AMS).
    (3)(i) Where a non-vessel operating common carrier (NVOCC), as 
defined in

[[Page 14]]

paragraph (b)(3)(ii) of this section, delivers cargo to the vessel 
carrier for lading aboard the vessel at the foreign port, the NVOCC, if 
licensed by or registered with the Federal Maritime Commission and in 
possession of an International Carrier Bond containing the provisions of 
Sec. 113.64 of this chapter, may electronically transmit the 
corresponding required cargo manifest information directly to Customs 
through the Vessel Automated Manifest System (AMS) that must be received 
24 or more hours before the related cargo is laden aboard the vessel at 
the foreign port (see Sec. 113.64(c) of this chapter); in the 
alternative, the NVOCC must fully disclose and present the required 
manifest information for the related cargo to the vessel carrier which, 
is required to present this information to Customs via the vessel AMS 
system.
    (ii) A non-vessel operating common carrier (NVOCC) means a common 
carrier that does not operate the vessels by which the ocean 
transportation is provided, and is a shipper in its relationship with an 
ocean common carrier. The term ``non-vessel operating common carrier'' 
does not include freight forwarders as defined in part 112 of this 
chapter.
    (iii) Where the party electronically presenting to CBP the cargo 
information required in Sec. 4.7a(c)(4) receives any of this 
information from another party, CBP will take into consideration how, in 
accordance with ordinary commercial practices, the presenting party 
acquired such information, and whether and how the presenting party is 
able to verify this information. Where the presenting party is not 
reasonably able to verify such information, CBP will permit the party to 
electronically present the information on the basis of what the party 
reasonably believes to be true.
    (4) Carriers of bulk cargo as specified in paragraph (b)(4)(i) of 
this section and carriers of break bulk cargo to the extent provided in 
paragraph (b)(4)(ii) of this section are exempt with respect to that 
cargo from the requirement set forth in paragraph (b)(2) of this section 
that a cargo declaration be filed with Customs 24 hours before such 
cargo is laden aboard the vessel at the foreign port. Any carriers of 
bulk or break bulk cargo that are exempted from the filing requirement 
of paragraph (b)(2) of this section must present their cargo 
declarations to Customs 24 hours prior to arrival in the U.S. if they 
are participants in the vessel AMS program, or upon arrival if they are 
non-automated carriers. These carriers must still report 24 hours in 
advance of loading any containerized or non-qualifying break bulk cargo 
they will be transporting.
    (i) A carrier is exempt from the filing requirement of paragraph 
(b)(2) of this section with respect to the bulk cargo it is 
transporting. Bulk cargo is defined for purposes of this section as 
homogeneous cargo that is stowed loose in the hold and is not enclosed 
in any container such as a box, bale, bag, cask, or the like. Such cargo 
is also described as bulk freight. Specifically, bulk cargo is composed 
of either:
    (A) Free flowing articles such as oil, grain, coal, ore, and the 
like, which can be pumped or run through a chute or handled by dumping; 
or
    (B) Articles that require mechanical handling such as bricks, pig 
iron, lumber, steel beams, and the like.
    (ii) A carrier of break bulk cargo may apply for an exemption from 
the filing requirement of paragraph (b)(2) of this section with respect 
to the break bulk cargo it will be transporting. For purposes of this 
section, break bulk cargo is cargo that is not containerized, but which 
is otherwise packaged or bundled.
    (A) To apply for an exemption, the carrier must submit a written 
request for exemption to the U.S. Customs Service, National Targeting 
Center, 1300 Pennsylvania Ave., NW., Washington, DC 20229. Until an 
application for an exemption is granted, the carrier must comply with 
the 24 hour advance manifest requirement set out in paragraph (b)(2) of 
this section. The written request for exemption must clearly set forth 
information such that Customs may assess whether any security concerns 
exist, such as: The carrier's IRS number; the source, identity and means 
of the packaging or bundling of the commodities being shipped; the ports 
of call, both foreign and domestic; the number of vessels the carrier

[[Page 15]]

uses to transport break bulk cargo, along with the names of these 
vessels and their International Maritime Organization numbers; and the 
list of the carrier's importers and shippers, identifying any who are 
members of C-TPAT (The Customs-Trade Partnership Against Terrorism).
    (B) Customs will evaluate each application for an exemption on a 
case by case basis. If Customs, by written response, provides an 
exemption to a break bulk carrier, the exemption is only applicable 
under the circumstances clearly set forth in the application for 
exemption. If circumstances set forth in the approved application 
change, it will be necessary to submit a new application.
    (C) Customs may rescind an exemption granted to a carrier at any 
time.
    (5) Within 90 days of December 5, 2003, all ocean carriers, and 
NVOCCs electing to participate, must be automated on the Vessel AMS 
system at all ports of entry in the United States.
    (c) No Passenger List or Crew List shall be required in the case of 
a vessel arriving from Canada, otherwise than by sea, at a port on the 
Great Lakes or their connecting or tributary waters.
    (d)(1) The master or owner of--
    (i) A vessel documented under the laws of the United States with a 
registry, coastwise license, or Great Lakes license endorsement, or a 
vessel not so documented but intended to be employed in the foreign, 
coastwise, or Great Lakes trade, or
    (ii) A documented vessel with a fishery license endorsement which 
has a permit to touch and trade (see Sec. 4.15) or a vessel with a 
fishery license endorsement lacking a permit to touch and trade but 
intended to engage in trade--

at the port of first arrival from a foreign country shall declare on 
Customs Form 226 any equipment, repair parts, or materials purchased for 
the vessel, or any expense for repairs incurred, outside the United 
States, within the purview of section 466, Tariff Act of 1930, as 
amended (19 U.S.C. 1466). If no equipment, repair parts, or materials 
have been purchased, or repairs made, a declaration to that effect shall 
be made on Customs Form 226.
    (2) If the vessel is at least 500 gross tons, the declaration shall 
include a statement that no work in the nature of a rebuilding or 
alteration which might give rise to a reasonable belief that the vessel 
may have been rebuilt within the meaning of the second proviso to 
section 27, Merchant Marine Act, 1920, as amended (46 U.S.C. 883), has 
been effected which has not been either previously reported or 
separately reported simultaneously with the filing of such declaration. 
The port director shall notify the U.S. Coast Guard vessel documentation 
officer at the home port of the vessel of any work in the nature of a 
rebuilding or alteration, including the construction of any major 
component of the hull or superstructure of the vessel, which comes to 
his attention unless the port director is satisfied that the owner of 
the vessel has filed an application for rebuilt determination as 
required by 46 CFR 67.27-3.
    (3) The declaration shall be ready for production on demand for 
inspection and shall be presented as part of the original manifest when 
formal entry of the vessel is made.
    (e) Failure to provide manifest information; penalties/liquidated 
damages. Any master who fails to provide manifest information as 
required by this section, or who presents or transmits electronically 
any document required by this section that is forged, altered or false, 
or who fails to present or transmit the information required by this 
section in a timely manner, may be liable for civil penalties as 
provided under 19 U.S.C. 1436, in addition to penalties applicable under 
other provisions of law. In addition, if any non-vessel operating common 
carrier (NVOCC) as defined in paragraph (b)(3)(ii) of this section 
elects to transmit cargo manifest information to Customs electronically 
and fails to do so in the manner and in the time period required by 
paragraph (b)(3)(i) of this section, or electronically transmits any 
false, forged or altered document, paper, manifest or data to Customs, 
such NVOCC may be liable for the payment of liquidated damages as 
provided in Sec. 113.64(c) of this chapter, in addition to any other

[[Page 16]]

penalties applicable under other provisions of law.

[T.D. 71-169, 36 FR 12602, July 2, 1971, as amended by T.D. 74-284, 39 
FR 39718, Nov. 11, 1974; T.D. 77-255, 42 FR 56319, Oct. 25, 1977; T.D. 
80-237, 45 FR 64565, Sept. 30, 1980; T.D. 83-214, 48 FR 46511, Oct. 13, 
1983; T.D. 92-74, 57 FR 35751, Aug. 11, 1992; T.D. 00-22, 65 FR 16515, 
Mar. 29, 2000; T.D. 02-62, 67 FR 66331, Oct. 31, 2002; 68 FR 1801, Jan. 
14, 2003; CBP Dec. 03-32, 68 FR 68168, Dec. 5, 2003]



Sec. 4.7a  Inward manifest; information required; alternative forms.

    The forms designated by Sec. 4.7(a) as comprising the inward 
manifest shall be completed as follows:
    (a) Ship's Stores Declaration. Articles to be retained aboard as sea 
or ship's stores shall be listed on the Ship's Stores Declaration, 
Customs Form 1303. Less than whole packages of sea or ship's stores may 
be described as ``sundry small and broken stores.''
    (b) Crew's Effects Declaration. (Customs Form 1304). (1) The 
declaration number of the Crew Member's Declaration, Customs Form 5129, 
prepared and signed by any officer or crewmember who intends to land 
articles in the United States, or the word ``None,'' shall be shown in 
item No. 7 on the Crew's Effects Declaration, Customs Form 1304 opposite 
the respective crewmember's name.
    (2) In lieu of describing the articles on Customs Form 1304, the 
master may furnish a Crew List, Customs and Immigration Form I-418, 
endorsed as follows:

    I certify that this list, with its supporting crewmembers' 
declarations, is a true and complete manifest of all articles on board 
the vessel acquired abroad by myself and the officers and crewmembers of 
this vessel, other than articles exclusively for use on the voyage or 
which have been duly cleared through Customs in the United States.

________________________________________________________________________
                                                               (Master.)


The Crew List on Form I-418 shall show, opposite the crewmember's name, 
his shipping article number and, in column 5, the declaration number. If 
the crewmember has nothing to declare, the word ``None'' shall be placed 
opposite his name instead of a declaration number.
    (3) For requirements concerning the preparation of Customs Form 
5129, see subpart G of part 148 of this chapter.
    (4) Any articles which are required to be manifested and are not 
manifested shall be subject to forfeiture and the master shall be 
subjected to a penalty equal to the value thereof, as provided in 
section 584, Tariff Act of 1930, as amended.
    (c) Cargo Declaration. (1) The Cargo Declaration (Customs Form 1302 
or a Customs-approved electronic equivalent) must list all the inward 
foreign cargo on board the vessel regardless of the U.S. port of 
discharge, and must separately list any other foreign cargo remaining on 
board (``FROB''). For the purposes of this part, ``FROB'' means cargo 
which is laden in a foreign port, is intended for discharge in a foreign 
port, and remains aboard a vessel during either direct or indirect stops 
at one or more intervening United States ports. The block designated 
``Arrival'' at the top of the form shall be checked. The name of the 
shipper shall be set forth in the column calling for such information 
and on the same line where the bill of lading is listed for that 
shipper's merchandise. When more than one bill of lading is listed for 
merchandise from the same shipper, ditto marks or the word ``ditto'' may 
be used to indicate the same shipper. The cargo described in column Nos. 
6 and 7, and either column No. 8 or 9, shall refer to the respective 
bills of lading. Either column No. 8 or column No. 9 shall be used, as 
appropriate. The gross weight in column No. 8 shall be expressed in 
either pounds or kilograms. The measurement in column No. 9 shall be 
expressed according to the unit of measure specified in the Harmonized 
Tariff Schedule of the United States (HTSUS) (19 U.S.C. 1202).
    (2)(i) When inward foreign cargo is being shipped by container, each 
bill of lading shall be listed in the column headed ``B/L Nr.'' in 
numerical sequence according to the bill of lading number. The number of 
the container which contains the cargo covered by that bill of lading 
and the number of the container seal shall be listed in column No. 6 
opposite the bill of lading number. The number of any other bill of 
lading for cargo in that container

[[Page 17]]

also shall be listed in column No. 6 immediately under the container and 
seal numbers. A description of the cargo shall be set forth in column 
No. 7 only if the covering bill of lading is listed in the column headed 
``B/L Nr.''
    (ii) As an alternative to the procedure described in paragraph (i), 
a separate list of the bills of lading covering each container on the 
vessel may be submitted on Customs Form 1302 or on a separate sheet. If 
this procedure is used:
    (A) Each container number shall be listed in alphanumeric sequence 
by port of discharge in column No. 6 of Customs Form 1302, or on the 
separate sheet; and
    (B) The number of each bill of lading covering cargo in a particular 
container, identifying the port of lading, shall be listed opposite the 
number of the container with that cargo in the column headed ``B/L Nr.'' 
if Customs Form 1302 is used, or either opposite or under the number of 
the container if a separate sheet is used.
    (iii) All bills of lading, whether issued by a carrier, freight 
forwarder, or other issuer, shall contain a unique identifier consisting 
of up to 16 characters in length. The unique bill of lading number will 
be composed of two elements. The first element will be the first four 
characters consisting of the carrier or issuer's four digit Standard 
Carrier Alpha Code (SCAC) assigned to the carrier in the National Motor 
Freight Traffic Association, Inc., Directory of Standard Multi-Modal 
Carrier and Tariff Agent Codes, applicable supplements thereto and 
reissues thereof. The second element may be up to 12 characters in 
length and may be either alpha and/or numeric. The unique identifier 
shall not be used by the carrier, freight forwarder or issuer for 
another bill of lading for a period of 3 years after issuance. Customs 
processing of the unique identifier will be limited to checking the 
validity of the Standard Carrier Alpha Codes (SCAC) and ensuring that 
the identifier has not been duplicated within a 3-year period. Carriers 
and broker/importers will be responsible for reconciliation of 
discrepancies between manifests and entries. Customs will not perform 
any reconciliation except in a post-audit process.
    (3) For shipment of containerized or palletized cargo, Customs 
officers shall accept a Cargo Declaration which indicates that it has 
been prepared on the basis of information furnished by the shipper. The 
use of words of qualification shall not limit the responsibility of a 
master to submit accurate Cargo Declarations or qualify the oath taken 
by the master as to the accuracy of his declaration.
    (i) If Cargo Declaration covers only containerized or palletized 
cargo, the following statement may be placed on the declaration:

    The information appearing on the declaration relating to the 
quantity and description of the cargo is in each instance based on the 
shipper's load and count. I have no knowledge or information which would 
lead me to believe or to suspect that the information furnished by the 
shipper is incomplete, inaccurate, or false in any way.

    (ii) If the Cargo Declaration covers conventional cargo and 
containerized or palletized cargo, or both, the use of the abbreviation 
``SLAC'' for ``shipper's load and count,'' or an appropriate 
abbreviation if similar words are used, is approved: Provided, That 
abbreviation is placed next to each containerized or palletized shipment 
on the declaration and the following statement is placed on the 
delaration:

    The information appearing on this declaration relating to the 
quantity and description of cargo preceded by the abbreviation ``SLAC'' 
is in each instance based on the shipper's load and count. I have no 
information which would lead me to believe or to suspect that the 
information furnished by the shipper is incomplete, inaccurate, or false 
in any way.

    (iii) The statements specified in paragraphs (c)(3) (i) and (ii) of 
this section shall be placed on the last page of the Cargo Declaration. 
Words similar to ``the shipper's load and count'' may be substituted for 
those words in the statements. Vague expressions such as ``said to 
contain'' or ``accepted as containing'' are not acceptable. The use of 
an asterisk or other character instead of appropriate abbreviations, 
such as ``SLAC'', is not acceptable.
    (4) In addition to the cargo manifest information required in 
paragraphs

[[Page 18]]

(c)(1)-(c)(3) of this section, for all inward foreign cargo, the Cargo 
Declaration, either on Customs Form 1302, or on a separate sheet or 
Customs-approved electronic equivalent, must state the following:
    (i) The last foreign port before the vessel departs for the United 
States;
    (ii) The carrier SCAC code (the unique Standard Carrier Alpha Code 
assigned for each carrier; see paragraph (c)(2)(iii) of this section);
    (iii) The carrier-assigned voyage number;
    (iv) The date the vessel is scheduled to arrive at the first U.S. 
port in Customs territory;
    (v) The numbers and quantities from the carrier's ocean bills of 
lading, either master or house, as applicable (this means that the 
carrier must transmit the quantity of the lowest external packaging 
unit; containers and pallets are not acceptable manifested quantities; 
for example, a container containing 10 pallets with 200 cartons should 
be manifested as 200 cartons);
    (vi) The first foreign port where the carrier takes possession of 
the cargo destined to the United States;
    (vii) A precise description (or the Harmonized Tariff Schedule (HTS) 
numbers to the 6-digit level under which the cargo is classified if that 
information is received from the shipper) and weight of the cargo or, 
for a sealed container, the shipper's declared description and weight of 
the cargo. Generic descriptions, specifically those such as ``FAK'' 
(``freight of all kinds''), ``general cargo'', and ``STC'' (``said to 
contain'') are not acceptable;
    (viii) The shipper's complete name and address, or identification 
number, from all bills of lading. (At the master bill level, for 
consolidated shipments, the identity of the Non Vessel Operating Common 
Carrier (NVOCC), freight forwarder, container station or other carrier 
is sufficient; for non-consolidated shipments, and for each house bill 
in a consolidated shipment, the identity of the foreign vendor, 
supplier, manufacturer, or other similar party is acceptable (and the 
address of the foreign vendor, etc., must be a foreign address); by 
contrast, the identity of the carrier, NVOCC, freight forwarder or 
consolidator is not acceptable; the identification number will be a 
unique number assigned by CBP upon the implementation of the Automated 
Commercial Environment);
    (ix) The complete name and address of the consignee, or 
identification number, from all bills of lading. (For consolidated 
shipments, at the master bill level, the NVOCC, freight forwarder, 
container station or other carrier may be listed as the consignee. For 
non-consolidated shipments, and for each house bill in a consolidated 
shipment, the consignee is the party to whom the cargo will be delivered 
in the United States, with the exception of ``FROB'' (foreign cargo 
remaining on board). However, in the case of cargo shipped ``to order of 
[a named party],'' the carrier must report this named ``to order'' party 
as the consignee; and, if there is any other commercial party listed in 
the bill of lading for delivery or contact purposes, the carrier must 
also report this other commercial party's identity and contact 
information (address) in the ``Notify Party'' field of the advance 
electronic data transmission to CBP, to the extent that the CBP-approved 
electronic data interchange system is capable of receiving this data. 
The identification number will be a unique number assigned by CBP upon 
implementation of the Automated Commercial Environment);
    (x) The vessel name, country of documentation, and official vessel 
number. (The vessel number is the International Maritime Organization 
number assigned to the vessel);
    (xi) The foreign port where the cargo is laden on board;
    (xii) Internationally recognized hazardous material code when such 
materials are being shipped;
    (xiii) Container numbers (for containerized shipments);
    (xiv) The seal numbers for all seals affixed to containers; and
    (xv) Date of departure from foreign, as reflected in the vessel log 
(this element relates to the departure of the vessel from the foreign 
port with respect to which the advance cargo declaration is filed (see 
Sec. 4.7(b)(2)); the time frame for reporting this data element will be 
either:
    (A) No later than 24 hours after departure from the foreign port of 
lading,

[[Page 19]]

for those vessels that will arrive in the United States more than 24 
hours after sailing from that foreign port; or
    (B) No later than the presentation of the permit to unlade (Customs 
Form (CF) 3171, or electronic equivalent), for those vessels that will 
arrive less than 24 hours after sailing from the foreign port of 
lading); and
    (xvi) Time of departure from foreign, as reflected in the vessel log 
(see Sec. 4.7a(c)(4)(xv) for the applicable foreign port and the time 
frame within which this data element must be reported to CBP).
    (d) Crew List. The Crew List shall be completed in accordance with 
the requirements of the Immigration and Naturalization Service, United 
States Department of Justice (8 CFR part 251).
    (e) Passenger List. (1) The Passenger List shall be completed in 
accordance with Sec. 4.50 and with the requirements of the Immigration 
and Naturalization Service, U.S. Department of Justice (8 CFR part 231), 
and the following certification shall be placed on its last page:

    I certify that Customs baggage declaration requirements have been 
made known to incoming passengers; that any required Customs baggage 
declarations have been or will simultaneously herewith be filed as 
required by law and regulation with the proper Customs officer; and that 
the responsibilities devolving upon this vessel in connection therewith, 
if any, have been or will be discharged as required by law or regulation 
before the proper Customs officer. I further certify that there are no 
steerage passengers on board this vessel (46 U.S.C. 151-163).

________________________________________________________________________
                                                                  Master

    (2) If the vessel is carrying steerage passengers, the reference to 
steerage passengers shall be deleted from the certification, and the 
master shall comply with the requirements of Sec. 4.50.
    (3) If there are no steerage passengers aboard upon arrival, the 
listing of the passengers may be in the form of a vessel ``souvenir 
passenger list,'' or similar list, in which the names of the passengers 
are listed alphabetically and to which the certificate referred to in 
paragraph (e)(1) of this section is attached.
    (4) All baggage on board a vessel not accompanying a passenger and 
the marks or addresses thereof shall be listed on the last sheet of the 
passenger list under the caption ``Unaccompanied baggage.''
    (f) Failure to provide manifest information; penalties/liquidated 
damages. Any master who fails to provide manifest information as 
required by this section, or who presents or transmits electronically 
any document required by this section that is forged, altered or false, 
may be liable for civil penalties as provided under 19 U.S.C. 1436, in 
addition to penalties applicable under other provisions of law. In 
addition, if any non-vessel operating common carrier (NVOCC) as defined 
in Sec. 4.7(b)(3)(ii) elects to transmit cargo manifest information to 
Customs electronically, and fails to do so as required by this section, 
or transmits electronically any document required by this section that 
is forged, altered or false, such NVOCC may be liable for liquidated 
damages as provided in Sec. 113.64(c) of this chapter, in addition to 
other penalties applicable under other provisions of law.

[T.D. 71-169, 36 FR 12602, July 2, 1971, as amended by T.D. 73-27, 38 FR 
2448, Jan. 26, 1973; T.D. 77-255, 42 FR 56320, Oct. 25, 1977; T.D. 79-
31, 44 FR 5649, Jan. 29, 1979; T.D. 85-123, 50 FR 29952, July 23, 1985; 
T.D. 89-58, 54 FR 20381, May 11, 1989; T.D. 93-66, 58 FR 44130, Aug. 19, 
1993; T.D. 95-77, 60 FR 50010, Sept. 27, 1995; T.D. 98-74, 63 FR 51287, 
Sept. 25, 1998; T.D. 02-62, 67 FR 66332, Oct. 31, 2002; CBP Dec. 03-32, 
68 FR 68169, Dec. 5, 2003]



Sec. 4.8  Preliminary entry.

    (a) Generally. Preliminary entry allows a U.S. or foreign vessel 
arriving under circumstances that require it to formally enter, to 
commence lading and unlading operations prior to making formal entry. 
Preliminary entry may be accomplished electronically pursuant to an 
authorized electronic data interchange system, or by any other means of 
communication approved by the Customs Service.
    (b) Requirements and conditions. Preliminary entry must be made in 
compliance with Sec. 4.30, and may be granted prior to, at, or 
subsequent to arrival of the vessel. The granting of preliminary

[[Page 20]]

vessel entry by Customs at or subsequent to arrival of the vessel, is 
conditioned upon the presentation to and acceptance by Customs of all 
forms, electronically or otherwise, comprising a complete manifest as 
provided in Sec. 4.7, except that the Cargo Declaration, Customs Form 
(CF) 1302, must be presented to Customs electronically in the manner 
provided in Sec. 4.7(b)(2). Vessels seeking preliminary entry in 
advance of arrival must do so: By presenting to Customs the electronic 
equivalent of a complete Customs Form 1302 (Cargo Declaration), in the 
manner provided in Sec. 4.7(b), showing all cargo on board the vessel; 
and by presenting Customs Form 3171 electronically no less than 48 hours 
prior to vessel arrival. The CF 3171 will also serve as notice of 
intended date of arrival. The port director may allow for the 
presentation of the CF 1302 and CF 3171 less than 48 hours prior to 
arrival in order to grant advanced preliminary entry if a vessel voyage 
takes less than 48 hours to complete from the last foreign port to the 
first U.S. port, or if other reasonable circumstances warrant. 
Preliminary entry granted in advance of arrival will become effective 
upon arrival at the port granting preliminary entry. Additionally, 
Customs must receive confirmation of a vessel's estimated time of 
arrival in a manner acceptable to the port director.

[T.D. 00-4, 65 FR 2872, Jan. 19, 2000, as amended by T.D. 02-62, 67 FR 
66332, Oct. 31, 2002]



Sec. 4.9  Formal entry.

    (a) General. Section 4.3 provides which vessels are subject to 
formal entry and where and when entry must be made. The formal entry of 
an American vessel is governed by section 434, Tariff Act of 1930 (19 
U.S.C. 1434). The term ``American vessel'' means a vessel of the United 
States (see Sec. 4.0(b)) as well as, when arriving by sea, a vessel 
entitled to be documented except for its size (see Sec. 4.0(c)). The 
formal entry of a foreign vessel arriving within the limits of any 
Customs port is also governed by section 434, Tariff Act of 1930 (19 
U.S.C. 1434). Alternatively, information necessary for formal entry may 
be transmitted electronically pursuant to a system authorized by 
Customs.
    (b) Procedures for American vessels. Under certain circumstances, 
American vessels arriving in ports of the United States directly from 
other United States ports must make entry. Entry of such vessels is 
required when they have merchandise aboard which is being transported 
in-bond, or when they have unentered foreign merchandise aboard. For the 
purposes of the vessel entry requirements, merchandise transported in-
bond does not include bonded ship's stores or supplies. While American 
vessels transporting unentered foreign merchandise must fully comply 
with the usual formal entry procedures, American vessels carrying no 
unentered foreign merchandise but which have in-bond merchandise aboard 
may satisfy vessel entry requirements by making a required report of 
arrival, and presenting a completed Customs Form 1300 (Vessel Entrance 
or Clearance Statement). Report of arrival as provided in Sec. 4.2 of 
this part, together with presenting a completed Customs Form 1300 
(Vessel Entrance or Clearance Statement), satisfies all entry 
requirements for the subject vessels.
    (c) Delivery of foreign vessel document. The master of any foreign 
vessel will exhibit the vessel's document to the port director on or 
before the entry of the vessel. After the net tonnage has been noted, 
the document may be delivered to the consul of the nation to which such 
vessel belongs, in which event the vessel master will certify to the 
port director the fact of such delivery (see section 434, Tariff Act of 
1930, as amended (19 U.S.C. 1434), as applied through section 438, 
Tariff Act of 1930, as amended (19 U.S.C. 1438)). If not delivered to 
the consul, the document will be deposited in the customhouse. Whether 
delivered to the foreign consul or deposited at the customhouse, the 
document will not be delivered to the master of the foreign vessel until 
clearance is granted under Sec. 4.61. It will not be lawful for any 
foreign consul to deliver to the master of any foreign vessel the 
register, or document in lieu thereof, deposited with him in accordance 
with the provisions of 19 U.S.C. 1434 until such master will produce to 
him a clearance in due form from the director of the port where such 
vessel

[[Page 21]]

has been entered. Any consul violating the provisions of this section is 
liable to a fine of not more than $5,000 (section 438, Tariff Act of 
1930, as amended; 19 U.S.C. 1438).
    (d) Failure to make required entry; penalties. Any master who fails 
to make entry as required by this section or who presents or transmits 
electronically any document required by this section that is forged, 
altered, or false, may be liable for certain civil penalties as provided 
under 19 U.S.C. 1436, in addition to penalties applicable under other 
provisions of law. Further, any vessel used in connection with any such 
violation is subject to seizure and forfeiture.

[T.D. 00-4, 65 FR 2873, Jan. 19, 2000; T.D. 00-22, 65 FR 16515, Mar. 29, 
2000]



Sec. 4.10  Request for overtime services.

    Request for overtime services in connection with entry or clearance 
of a vessel, including the boarding of a vessel in accordance with Sec. 
4.1 shall be made on Customs Form 3171. (See Sec. 24.16 of this chapter 
regarding pleasure vessels.) Such request for overtime services must 
specify the nature of the services desired and the exact times when they 
will be needed, unless a term special license (unlimited or limited to 
the service requested) has been issued (see Sec. 4.30(g)) and 
arrangements are made locally so that the proper Customs officer will be 
notified during official hours in advance of the rendering of the 
services as to the nature of the services desired and the exact times 
they will be needed. Such request shall not be approved (previously 
issued term special licenses shall be revoked) unless the carrier 
complies with the provisions of paragraphs (l) and (m) of Sec. 4.30 
regarding terminal facilities and employee lists, respectively, and the 
required cash deposit or bond, on Customs Form 301, containing the bond 
conditions set forth in Sec. 113.64 of this chapter, has been received. 
Separate bonds shall be required if overtime services are requested by 
different principals.

[T.D. 72-189, 37 FR 13975, July 15, 1972, as amended by T.D. 84-213, 49 
FR 41163, Oct. 19, 1984; T.D. 92-74, 57 FR 35751, Aug. 11, 1992]



Sec. 4.11  Sealing of stores.

    Upon the arrival of a vessel from a foreign port, or a vessel 
engaged in the foreign trade from a domestic port, sea stores and ship's 
stores not required for immediate use or consumption on board while the 
vessel is in port and articles acquired abroad by officers and members 
of the crew, for which no permit to land has been issued, shall be 
placed under seal, unless the Customs officer is of the opinion that the 
circumstances do not require such action. Customs inspectors in charge 
of the vessel, from time to time, as in their judgment the necessity of 
the case requires, may issue stores from under seal for consumption on 
board the vessel by its passengers and crew. (See Sec. 4.39.)



Sec. 4.12  Explanation of manifest discrepancy.

    (a)(1) Vessel masters or agents shall notify the port director on 
Customs Form 5931 of shortages (merchandise manifested, but not found) 
or overages (merchandise found, but not manifested) of merchandise.
    (2) Shortages shall be reported to the port direct by the master or 
agent of the vessel by endorsement on the importer's claim for shortage 
on Customs Form 5931 as provided for in Sec. 158.3 of this chapter, or 
within 60 days after the date of entry of the vessel, whichever is 
later. Satisfactory evidence to support the claim of nonimportation or 
of proper disposition or other corrective action (see Sec. 4.34) shall 
be obtained by the master or agent and shall be retained in the 
carrier's file for one year.
    (3) Overages shall be reported to the port director within 60 days 
after the date of entry of the vessel by completion of a post entry or 
suitable explanation of corrective action (see Sec. 4.34) on the 
Customs Form 5931.
    (4) The port director shall immediately advise the master or agent 
of those discrepancies which are not reported by the master or agent. 
Notification may be in any appropriate manner, including the furnishing 
of a copy of Customs Form 5931 to the master or agent. The master or 
agent shall satisfactorily resolve the matter within 30

[[Page 22]]

days after the date of such notification, or within 60 days after entry 
of the vessel, whichever is later.
    (5)(a) Unless the required notification and explanation is made 
timely and the port director is satisfied that the discrepancies 
resulted from clerical error or other mistake and that there has been no 
loss of revenue (and in the case of a discrepancy not initially reported 
by the master or agent that there was a valid reason for failing to so 
report), applicable penalties under section 584, Tariff Act of 1930, as 
amended (19 U.S.C. 1584), shall be assessed (see Sec. 162.31 of this 
chapter). For purposes of this section, the term ``clerical error'' is 
defined as a non-negligent, inadvertent, or typographical mistake in the 
preparation, assembly, or submission (electronically or otherwise) of 
the manifest. However, repeated similar manifest discrepancies by the 
same parties may be deemed the result of negligence and not clerical 
error or other mistake. For the purpose of assessing applicable 
penalties, the value of the merchandise shall be determined as 
prescribed in Sec. 162.43 of this chapter. The fact that the master or 
owner had no knowledge of a discrepancy shall not relieve him from the 
penalty.
    (b) Except as provided in paragraph (c) of this section, a 
correction in the manifest shall not be required in the case of bulk 
merchandise if the port director is satisfied that the difference 
between the manifested quantity and the quantity unladen, whether the 
difference constitutes an overage or a shortage, is an ordinary and 
usual difference properly attributable to absorption of moisture, 
temperature, faulty weighing at the port of lading, or other similar 
reason. A correction in the manifest shall not be required because of 
discrepancies between marks or numbers on packages of merchandise and 
the marks or numbers for the same packages as shown on the manifest of 
the importing vessel when the quantity and description of the 
merchandise in such packages are correctly given.
    (c) Manifest discrepancies (shortages and overages) of petroleum and 
petroleum products imported in bulk shall be reported on Customs Form 
5931, if the discrepancy exceeds one percent.

[T.D. 80-142, 45 FR 36383, May 30, 1980, as amended by T.D. 99-64, 64 FR 
43265, Aug. 10, 1999]



Sec. 4.13  [Reserved]



Sec. 4.14  Equipment purchases by, and repairs to, American vessels.

    (a) General provisions and applicability. Under section 466, Tariff 
Act of 1930, as amended (19 U.S.C. 1466), purchases for or repairs made 
to certain vessels while they are outside the United States, including 
repairs made while those vessels are on the high seas, are subject to 
declaration, entry and payment of ad valorem duty. This does not apply 
to reimbursement paid to members of the regular crew of a vessel for 
labor expended in making repairs to the vessel. These requirements are 
effective upon the first arrival of affected vessels in the United 
States or Puerto Rico. The vessels subject to these requirements include 
those documented under U.S. law for the foreign or coastwise trades, as 
well as those which were previously documented under the laws of some 
foreign nation or are undocumented at the time that foreign shipyard 
repairs are performed, but which exhibit an intent to engage in those 
trades under Customs interpretations. Duty is based on actual foreign 
cost. This includes the original foreign purchase price of articles 
which have been imported into the United States and are later sent 
abroad for use. For the purposes of this section, expenditures made in 
American Samoa, the Guantanamo Bay Naval Station, Guam, Puerto Rico, or 
the U.S. Virgin Islands are considered to have been made in the United 
States, and are not subject to declaration, entry or duty. Under 
separate provisions of law, the cost of labor performed, and of parts 
and materials produced and purchased in Israel are not subject to duty 
under the vessel repair statute. Additionally, expenditures made in 
Canada or in Mexico are not subject to any vessel repair duties. Even in 
the absence of any liability for duty, it is still required that all 
repairs and purchases, including those made in Canada, Mexico, and 
Israel, be declared and entered.

[[Page 23]]

    (b) Applicability to specific types of vessels. (1) Fishing vessels. 
As provided in Sec. 4.15, vessels documented under U.S. law with a 
fishery endorsement are subject to vessel repair duties for covered 
foreign expenditures. Undocumented American fishing vessels which are 
repaired, or for which parts, nets or equipment are purchased outside 
the U.S. are also liable for duty.
    (2) Government-owned or chartered vessels. Vessels normally subject 
to the vessel repair statute because of documentation or intended use 
are not excused from duty liability merely because they are either owned 
or chartered by the U.S. Government.
    (3) Vessels continuously away for two years or longer. (i) Liability 
for expenditures throughout entire absence from U.S. Vessels that 
continuously remain outside the United States for two years or longer 
are liable for duty on any fish nets and netting purchased at any time 
during the entire absence. Vessels designed and used primarily for 
transporting passengers or merchandise, which depart the United States 
for the sole purpose of obtaining equipment, parts, materials or repairs 
remain fully liable for duty regardless of the duration of their absence 
from the United States.
    (ii) Liability for expenditures made during first six months of 
absence. Except as provided in paragraph (b)(3)(i) of this section, 
vessels that continuously remain outside the United States for two years 
or longer are liable for duty only on those expenditures which are made 
during the first six months of their absence. See paragraph (h)(3) of 
this section. However, even though some costs might not be dutiable 
because of the six-month rule, all repairs, materials, parts and 
equipment-related expenditures must be declared and entered.
    (c) Estimated duty deposit and bond requirements. Generally, the 
person authorized to submit a vessel repair declaration and entry must 
either deposit or transmit estimated duties or produce evidence of a 
bond on Customs Form 301 at the first United States port of arrival 
before the vessel will be permitted to depart from that port. A 
continuous or single entry bond of sufficient value to cover all 
potential duty on the foreign repairs and purchases must be identified 
by surety, number and amount on the vessel repair declaration which is 
submitted at the port of first arrival. At the time the vessel repair 
entry is submitted by the vessel operator to the appropriate VRU port of 
entry as defined in paragraph (g) of this section, that same identifying 
information must be identified on the entry form. Sufficiency of the 
amount of the bond is within the discretion of Customs at the arrival 
port with claims for reduction in duty liability necessarily being 
subject to full consideration of evidence by Customs. Customs officials 
at the port of arrival may consult the appropriate Vessel Repair Unit 
(VRU) port of entry as identified in paragraph (g) of this section or 
the staff of the Entry Procedures and Carriers Branch in Customs 
Headquarters in setting sufficient bond amounts. These duty, deposit, 
and bond requirements do not apply to vessels which are owned or 
chartered by the United States Government and are actually being 
operated by employees of an agency of the Government. If operated by a 
private party for a Federal agency under terms whereby that private 
party is liable under the contract for payment of the duty, there must 
be a deposit or a bond filed in an amount adequate to cover the 
estimated duty.
    (d) Declaration required. When a vessel subject to this section 
first arrives in the United States following a foreign voyage, the 
owner, master, or authorized agent must submit a vessel repair 
declaration on Customs Form 226, a dual-use form used both for 
declaration and entry purposes, or must transmit its electronic 
equivalent. The declaration must be ready for presentation in the event 
that a Customs officer boards the vessel. If no foreign repair-related 
expenses were incurred, that fact must be reported either on the 
declaration form or by approved electronic means. The Customs port of 
arrival receiving either a positive or negative vessel repair 
declaration or electronic equivalent will immediately forward it to the 
appropriate VRU port of entry as identified in paragraph (g) of this 
section.
    (e) Entry required. The owner, master, or authorized representative 
of the owner of any vessel subject to this section for which a positive 
declaration

[[Page 24]]

has been filed must submit a vessel repair entry on Customs Form 226 or 
transmit its electronic equivalent. The entry must show all foreign 
voyage expenditures for equipment, parts of equipment, repair parts, 
materials and labor. The entry submission must indicate whether it 
provides a complete or incomplete account of covered expenditures. The 
entry must be presented or electronically transmitted by the vessel 
operator to the appropriate VRU port of entry as identified in paragraph 
(g) of this section, so that it is received within ten calendar days 
after arrival of the vessel. Claims for relief from duty should be made 
generally as part of the initial submission, and evidence must later be 
provided to support those claims. Failure to submit full supporting 
evidence of cost within stated time limits, including any extensions 
granted under this section, is considered to be a failure to enter.
    (f) Time limit for submitting evidence of cost. A complete vessel 
repair entry must be supported by evidence showing the cost of each item 
entered. If the entry is incomplete when submitted, evidence to make it 
complete must be received by the appropriate VRU port of entry as 
identified in paragraph (g) of this section within 90 calendar days from 
the date of vessel arrival. That evidence must include either the final 
cost of repairs or, if the operator submits acceptable evidence that 
final cost information is not yet available, initial or interim cost 
estimates given prior to or after the work was authorized by the 
operator. The proper VRU port of entry may grant one 30-day extension of 
time to submit final cost evidence if a satisfactory written explanation 
of the need for an extension is received before the expiration of the 
original 90-day submission period. All extensions will be issued in 
writing. Inadequate, vague, or open-ended requests will not be granted. 
Questions as to whether an extension should be granted may be referred 
to the Entry Procedures and Carriers Branch in Customs Headquarters by 
the VRU ports of entry. Any request for an extension beyond a 30-day 
grant issued by a VRU must be submitted through that unit to the Entry 
Procedures and Carriers Branch, Customs Headquarters. In the event that 
all cost evidence is not furnished within the specified time limit, or 
is of doubtful authenticity, the VRU may refer the matter to the Customs 
Office of Investigations to begin procedures to obtain the needed 
evidence. That office may also investigate the reason for a failure to 
file or for an untimely submission. Unexplained or unjustified delays in 
providing Customs with sufficient information to properly determine duty 
may result in penalty action as specified in paragraph (j) of this 
section. Extensions granted for the filing of necessary evidence may 
also extend the time for filing Applications for Relief (see paragraph 
(i)(1) of this section).
    (g) Location and jurisdiction of vessel repair unit ports of entry. 
Vessel Repair Units (VRUs) are responsible for processing vessel repair 
entries. VRUs are located in New York, New York; New Orleans, Louisiana; 
and San Francisco, California. The New York unit processes vessel repair 
entries received from ports of arrival on the Great Lakes and the 
Atlantic Coast of the United States north of, but not including, those 
located in the State of Virginia. The New Orleans unit processes vessel 
repair entries received from ports of arrival on the Atlantic Coast from 
and including those in the State of Virginia, southward, and from all 
United States ports of arrival on the Gulf of Mexico including ports in 
Puerto Rico. The San Francisco unit processes vessel repair entries 
received from all ports of entry on the Pacific Coast including those in 
Alaska and Hawaii.
    (h) Justifications for relief from duty. Claims for relief from the 
assessment of vessel repair duties may be submitted to Customs. Relief 
may be sought under paragraphs (a), (d), (e), or (h) of the vessel 
repair statute (19 U.S.C. 1466(a), (d), (e), or (h)), each paragraph of 
which relates to a different type of claim as further specified in 
paragraphs (h)(1)-(h)(4) of this section.
    (1) Relief under 19 U.S.C. 1466(a). Requests for relief from duty 
under 19 U.S.C. 1466(a) consist of claims that a foreign shipyard 
operation or expenditure is not considered to be a repair or purchase 
within the terms of the vessel

[[Page 25]]

repair statute or as determined under judicial or administrative 
interpretations. Example: a claim that the shipyard operation is a 
vessel modification.
    (2) Relief from duty under 19 U.S.C. 1466(d). Requests for relief 
from duty under 19 U.S.C. 1466(d) consist of claims that a foreign 
shipyard operation or expenditure involves any of the following:
    (i) Stress of weather or other casualty. Relief will be granted if 
good and sufficient evidence supports a finding that the vessel, while 
in the regular course of its voyage, was forced by stress of weather or 
other casualty, while outside the United States, to purchase such 
equipment or make those repairs as are necessary to secure the safety 
and seaworthiness of the vessel in order to enable it to reach its port 
of destination in the United States. For the purposes of this paragraph, 
a ``casualty'' does not include any purchase or repair made necessary by 
ordinary wear and tear, but does include the failure of a part to 
function if it is proven that the specific part was repaired, serviced, 
or replaced in the United States immediately before the start of the 
voyage in question, and then failed within six months of that date.
    (ii) U.S. parts installed by regular crew or residents. Relief will 
be granted if equipment, parts of equipment, repair parts, or materials 
used on a vessel were manufactured or produced in the United States and 
were purchased in the United States by the owner of the vessel. It is 
required under the statute that residents of the United States or 
members of the regular crew of the vessel perform any necessary labor in 
connection with such installations.
    (iii) Dunnage. Relief will be granted if any equipment, equipment 
parts, materials, or labor were used for the purpose of providing 
dunnage for the packing or shoring of cargo, for erecting temporary 
bulkheads or other similar devices for the control of bulk cargo, or for 
temporarily preparing tanks for carrying liquid cargoes.
    (3) Relief under 19 U.S.C. 1466(e). Requests for relief from duty 
under 19 U.S.C. 1466(e) relate in pertinent part to matters involving 
vessels normally subject to the vessel repair statute, but that 
continuously remain outside the United States for two years or longer. 
Vessels that continuously remain outside the United States for two years 
or longer may qualify for relief from duty on expenditures made later 
than the first six months of their absence. See paragraph (b)(3)(ii) of 
this section.
    (4) Relief under 19 U.S.C. 1466(h). Requests for relief from duty 
under 19 U.S.C. 1466(h) consist of claims that a foreign shipyard 
operation or expenditure involves any of the following:
    (i) Expenditures on LASH barges. Relief will be granted with respect 
to the cost of equipment, parts, materials, or repair labor for Lighter 
Aboard Ship (LASH) operations accomplished abroad.
    (ii) Certain spare repair parts or materials. Relief will be granted 
with respect to the cost of spare repair parts or materials which are 
certified by the vessel owner or master to be for use on a cargo vessel, 
but only if duty was previously paid under the appropriate commodity 
classification(s) as found in the Harmonized Tariff Schedule of the 
United States when the article first entered the United States.
    (iii) Certain spare parts necessarily installed on a vessel prior to 
their first entry into the United States. Relief will be granted with 
respect to the cost of spare parts only, which have been necessarily 
installed prior to their first entry into the United States with duty 
payment under the appropriate commodity classification(s) as found in 
the Harmonized Tariff Schedule of the United States.
    (i) General procedures for seeking relief. (1) Applications for 
Relief. Relief from the assessment of vessel repair duty will not be 
granted unless an Application for Relief is filed with Customs. Relief 
will not be granted based merely upon a claim for relief made at the 
time of entry under paragraph (e) of this section. The filing of an 
Application for Relief is not required, nor is one required to be 
presented in any particular format, but if filed it must clearly present 
the legal basis for granting relief, as specified in paragraph (h) of 
this section. An Application must also state that all repair operations 
performed aboard a vessel during the one-year period prior to the

[[Page 26]]

current submission have been declared and entered. A valid Application 
is required to be supported by complete evidence as detailed in 
paragraphs (i)(1)(i)-(vi) and (i)(2) of this section. Except as further 
provided in this paragraph, the deadline for receipt of an Application 
and supporting evidence is 90 calendar days from the date that the 
vessel first arrived in the United States following foreign operations. 
The provisions for extension of the period for filing required evidence 
in support of an entry, as set forth in paragraph (f) of this section, 
are applicable to extension of the time period for filing Applications 
for Relief as well. Applications must be addressed and submitted by the 
vessel operator to the appropriate VRU port of entry and will be decided 
in that unit. The VRUs may seek the advice of the Entry Procedures and 
Carriers Branch in Customs Headquarters with regard to any specific item 
or issue which has not been addressed by clear precedent. If no 
Application is filed or if a submission which does not meet the minimal 
standards of an Application for Relief is received, the duty amount will 
be determined without regard to any potential claims for relief from 
duty (see paragraph (h) of this section). Each Application for Relief 
must include copies of:
    (i) Itemized bills, receipts, and invoices for items shown in 
paragraph (e) of this section. The cost of items for which a request for 
relief is made must be segregated from the cost of the other items 
listed in the vessel repair entry;
    (ii) Photocopies of relevant parts of vessel logs, as well as of any 
classification society reports which detail damage and remedies;
    (iii) A certification by the senior officer with personal knowledge 
of all relevant circumstances relating to casualty damage (time, place, 
cause, and nature of damage);
    (iv) A certification by the senior officer with personal knowledge 
of all relevant circumstances relating to foreign repair expenditures 
(time, place, and nature of purchases and work performed);
    (v) A certification by the master that casualty-related expenditures 
were necessary to ensure the safety and seaworthiness of the vessel in 
reaching its United States port of destination; and
    (vi) Any permits or other documents filed with or issued by any 
United States Government agency other than Customs regarding the 
operation of the vessel that are relevant to the request for relief.
    (2) Additional evidence. In addition, copies of any other evidence 
and documents the applicant may wish to provide as evidentiary support 
may be submitted. Elements of applications which are not supported by 
required evidentiary elements will be considered fully dutiable. All 
documents submitted must be certified by the master, owner, or 
authorized corporate officer to be originals or copies of originals, and 
if in a foreign language, they must be accompanied by an English 
translation, certified by the translator to be accurate. Upon receipt of 
an Application for Relief by the VRU within the prescribed time limits, 
a determination of duties owed will be made. After a decision is made on 
an Application for Relief by a VRU, the applicant will be notified of 
the right to protest any adverse decision.
    (3) Administrative protest. Following the determination of duty 
owing on a vessel repair entry, a protest may be filed under 19 U.S.C. 
1514(a)(2) as the only and final administrative appeal. The procedures 
and time limits applicable to protests filed in connection with vessel 
repair entries are the same as those provided in part 174 of this 
chapter. In particular, the applicable protest period will begin on the 
date of the issuance of the decision giving rise to the protest as 
reflected on the relevant correspondence from the appropriate VRU.
    (j) Penalties--(1) Failure to report, enter, or pay duty. It is a 
violation of the vessel repair statute if the owner or master of a 
vessel subject to this section willfully or knowingly neglects or fails 
to report, make entry, and pay duties as required; makes any false 
statements regarding purchases or repairs described in this section 
without reasonable cause to believe the truth of the statements; or aids 
or procures any false statements regarding any material matter without 
reasonable cause to believe the truth of the statement.

[[Page 27]]

If a violation occurs, the vessel, its tackle, apparel, and furniture, 
or a monetary amount up to their value as determined by Customs, is 
subject to seizure and forfeiture and is recoverable from the owner (see 
Sec. 162.72 of this chapter).
    (2) False declaration. If any person required to file a vessel 
repair declaration or entry under this section, knowingly and willfully 
falsifies, conceals or covers up by any trick, scheme, or device a 
material fact, or makes any materially false, fictitious or fraudulent 
statement or representation, or makes or uses any false writing or 
document knowing the same to contain any materially false, fictitious or 
fraudulent statement, that person will be subject to the criminal 
penalties provided for in 18 U.S.C. 1001.

[66 FR 16397, Mar. 26, 2001]



Sec. 4.15  Fishing vessels touching and trading at foreign places.

    (a) Before any vessel documented with a fishery license endorsement 
shall touch and trade at a foreign port or place, the master shall 
obtain from the port director a permit on Customs Form 1379 to touch and 
trade.

When a fishing vessel departs from the United States and there is an 
intent to stop at a foreign port (1) to lade vessel equipment which was 
preordered, (2) to purchase and lade vessel equipment, or (3) to 
purchase and lade vessel equipment to replace existing vessel equipment, 
the master of the vessel must either clear for that foreign port or 
obtain a permit to touch and trade, whether or not the vessel will 
engage in fishing on that voyage. \28\ Purchases of such equipment, 
whether intended at the time of departure or not, are subject to 
declaration, entry, and payment of duty pursuant to section 466 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1466). The duty may be 
remitted if it is established that the purchases resulted from stress of 
weather or other casualty.
---------------------------------------------------------------------------

    \28\ If such a vessel puts into a foreign port or place and only 
obtains bunkers, stores, or supplies suitable for a fishing voyage, it 
is not considered to have touched and traded there. Fish nets and 
netting are considered vessel equipment and not vessel supplies.
    29-61 [Reserved]
---------------------------------------------------------------------------

    (b) Upon the arrival of a documented vessel with a fishery 
endorsement which has put into a foreign port or place, the master shall 
report its arrival, make entry, and conform in all respects to the 
regulations applicable in the case of a vessel arriving from a foreign 
port.
    (c) If a vessel which has been granted a permit to touch and trade 
arrives at a port in the United States, whether or not the vessel has 
touched at a foreign port or place, such permit shall forthwith be 
surrendered to the port director.
    (d) No permit to touch and trade shall be issued to a vessel which 
does not have a Certificate of Documentation with a fishery license 
endorsement.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 77-28, 42 FR 3161, Jan. 
17, 1977; T.D. 83-214, 48 FR 46512, Oct. 13, 1983; T.D. 94-24, 59 FR 
13200, Mar. 21, 1994; T.D. 95-77, 60 FR 50010, Sept. 27, 1995]



Sec. 4.16  [Reserved]



Sec. 4.17  Vessels from discriminating countries.

    The prohibition against imports in, and the penalty of forfeiture 
of, certain vessels from countries which discriminate against American 
vessels provided for in subsections 2 and 3 of paragraph J, section IV, 
Tariff Act of 1913, as amended by the act of March 4, 1915 (19 U.S.C. 
130, 131), shall be enforced only in pursuance of specific instructions 
issued and published from time to time by the Secretary of the Treasury 
or such other officer as the Secretary may designate. (See also 
Sec. Sec. 4.20(c) and 159.42 of this chapter.)

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 73-175, 38 FR 17444, 
July 2, 1973]

                       Tonnage Tax and Light Money



Sec. 4.20  Tonnage taxes.

    (a) Except as specified in Sec. 4.21, a regular tonnage tax or duty 
of 2 cents per net ton, not to exceed in the aggregate 10 cents per net 
ton in any 1 year, shall be imposed at each entry on all vessels which 
shall be entered in any port of the United States from any foreign

[[Page 28]]

port or place in North America, Central America, the West Indies, the 
Bahama Islands, the Bermuda Islands, the coast of South America 
bordering on the Caribbean Sea (considered to include the mouth of the 
Orinoco River), or the high seas adjacent to the U.S. or the above 
listed foreign locations, and on all vessels (except vessels of the 
U.S., recreational vessels, and barges, as defined in Sec. 2101 of 
Title 46) that depart a U.S. port or place and return to the same port 
or place without being entered in the United States from another port or 
place, and regular tonnage tax of 6 cents per net ton, not to exceed 30 
cents per net ton per annum, shall be imposed at each entry on all 
vessels which shall be entered in any port of the United States from any 
other foreign port. In determining the port of origin of a voyage to the 
United States and the rate of tonnage tax, the following shall be used 
as a guide:
    (1) When the vessel has proceeded in ballast from a port to which 
the 6-cent rate is applicable to a port to which the 2-cent rate applies 
and there has laden cargo or taken passengers, tonnage tax upon entry in 
the United States shall be assessed at the 2-cent rate.
    (2) The same rate shall be applied in a case in which the vessel has 
transported cargo or passengers from a 6-cent port to a 2-cent port when 
all such cargo or passengers have been unladen or discharged at the 2-
cent port, without regard to whether the vessel thereafter has proceeded 
to the United States in ballast or with cargo or passengers laden or 
taken on board at the 2-cent port.
    (3) The 6-cent rate shall be applied when the vessel proceeds from a 
2-cent port to a 6-cent port en route to the United States under 
circumstances similar to paragraph (a) (1) or (2) of this section.
    (4) If the vessel arrives in the United States with cargo or 
passengers taken at two or more ports to which different rates are 
applicable, tonnage tax shall be collected at the higher rate.
    (b) The tonnage year shall be computed from the date of the first 
entry of the vessel concerned, without regard to the rate of the payment 
made at that entry, and shall expire on the day preceding the 
corresponding date of the following year. There may be 5 payments at the 
maximum (6 cent) and 5 at the minimum (2-cent) rate during a tonnage 
year, so that the maximum assessment of tonnage duty may amount to 40 
cent per net ton for the tonnage year of a vessel engaged in alternating 
trade.
    (c) A vessel shall also be subject on every entry from a foreign 
port or place, whether or not regular tonnage tax is payable on the 
particular entry, to the payment of a special tonnage tax and to the 
payment of light money at the rates and under the circumstances 
specified in the following table:

----------------------------------------------------------------------------------------------------------------
                                                                                     Rate per net ton
                                                                         ---------------------------------------
                           Classes of vessels                                               Special      Light
                                                                            Regular tax       tax        money
----------------------------------------------------------------------------------------------------------------
Vessels of the United States:
  1. Under provisional register, without regard to citizenship of           $.02 or $.06  ..........  ..........
   officers.............................................................
  2. All others:
    (i) If all the officers are citizens................................      .02 or .06  ..........  ..........
    (ii) If any officer is not a citizen................................      .02 or .06    \1\ 0.50     \1\ .50
Undocumented vessels which are owned by citizens \2\....................      .02 or .06         .50     \3\ .50
Foreign vessels:
  1. Of nations whose vessels are exempted from special tax or light          .02 or .06  ..........  ..........
   money................................................................
  2. All others:
    (i) Built in the U.S................................................      .02 or .06         .30         .50
    (ii) Not built in the U.S...........................................      .02 or .06         .50         .50
    (iii) In addition to (i) or (ii) of 2., Foreign Vessels, when             .02 or .06    \4\ 2.00     \4\ .50
     entering from a foreign port or place where vessels of the U.S. are
     not ordinarily permitted to enter and trade \3a\...................
----------------------------------------------------------------------------------------------------------------
\1\ This does not apply on the first arrival of a vessel in a port of the United States from a foreign or
  intercoastal voyage if all the officers who are not citizens are below the grade of master and are filling
  vacancies which occurred on the voyage.
\2\ This special tax and light money do not apply if the vessel is documented as a vessel of the United States
  before leaving the port.

[[Page 29]]

 
\3\ This does not apply if the vessel is under a certificate of protection and the owner or master files with
  the port director the oath required by 46 U.S.C. App. 129. An unrecorded bill of sale is not such a document
  as will exempt a vessel from the payment of light money under 46 U.S.C. App. 128, and the recording of such
  bill of sale after the arrival of the vessel is not sufficient to relieve it from the payment of the tax.
\3a\ The Democratic People's Republic of Korea (North Korea), does not ordinarily permit vessels of the United
  States to enter and trade.
\4\ This is to be collected on each entry of a vessel from such a port or place.

    (d) Tonnage tax shall be imposed upon a vessel even though she 
enters a port of the United States only for orders.
    (e) The fact that a vessel passes through the Panama Canal does not 
affect the rate of tonnage tax otherwise applicable to the vessel.
    (f) For the purpose of computing tonnage tax, the net tonnage of a 
vessel stated in the vessel's marine document shall be accepted unless 
(1) such statement is manifestly wrong, in which case the net tonnage 
shall be estimated, pending admeasurement of the vessel, or the tonnage 
reported for her by any recognized classification society may be 
accepted, or (2) an appendix is attached to the marine document showing 
a net tonnage ascertained under the so-called ``British rules'' or the 
rules of any foreign country which have been accepted as substantially 
in accord with the rules of the United States, in which case the tonnage 
so shown may be accepted and the date the appendix was issued shall be 
noted on the tonnage tax certificate, Customs Form 1002, and on the 
Vessel Entrance or Clearance Statement, Customs Form 1300. For the 
purpose of computing tonnage tax on a vessel with a tonnage mark and 
dual tonnages, the higher of the net tonnages stated in the vessel's 
marine document or tonnage certificate shall be used unless the Customs 
officer concerned is satisfied by report of the boarding officer, 
statement or certificate of the master, or otherwise that the tonnage 
mark was not submerged at the time of arrival. Whether the vessel has a 
tonnage mark, and if so, whether the mark was submerged on arrival, 
shall be noted on Customs Form 1300 by the boarding officer.
    (g) The decision of the Commissioner of Customs is the final 
administrative decision on any question of interpretation relating to 
the collection of tonnage tax or to the refund of such tax when 
collected erroneously or illegally, and any question of doubt shall be 
referred to him for instructions.
    (h) Any person adversely affected by a decision of the Commissioner 
of Customs relating to the collection of tonnage tax, or to the refund 
of such tax when collected erroneously or illegally, may appeal the 
decision in the Court of International Trade provided that the appeal 
action is commenced in accordance with the rules of the Court within 2 
years after the cause of action first accrues.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 71-169, 36 FR 12603, 
July 2, 1971; T.D. 75-110, 40 FR 21027, May 15, 1975; T.D. 76-280, 41 FR 
42647, Sept. 28, 1976; T.D. 79-276, 44 FR 61956, Oct. 29, 1979; T.D. 82-
145, 47 FR 35475, Aug. 16, 1982; T.D. 85-91, 50 FR 21429, May 24, 1985; 
T.D. 85-90, 50 FR 21430, May 24, 1985; T.D. 93-12, 58 FR 13196, Mar. 10, 
1993; T.D. 95-76, 60 FR 48028, Sept. 18, 1995; T.D. 97-82, 62 FR 51769, 
Oct. 3, 1997; T.D. 00-22, 65 FR 16515, Mar. 29, 2000; CBP Dec. 03-16, 68 
FR 48280, Aug. 13, 2003]



Sec. 4.21  Exemptions from tonnage taxes.

    (a) Tonnage taxes and light money shall be suspended in whole or in 
part whenever the President by proclamation shall so direct.
    (b) The following vessels, or vessels arriving in the circumstances 
as defined below, shall be exempt from tonnage tax and light money:
    (1) It comes into port for bunkers (including water), sea stores, or 
ship's stores; transacts no other business in the port; and departs 
within 24 hours after its arrival.
    (2) It arrives in distress, even though required to enter.
    (3) It is brought into port by orders of United States naval 
authorities and transacts no business while in port other than the 
taking on of bunkers, sea stores, or ship's stores.
    (4) It is a vessel of war or other vessel which is owned by, or 
under the complete control and management of the United States or the 
government of a foreign country, and which is not carrying passengers or 
merchandise in

[[Page 30]]

trade or, if in ballast, which is not arriving from a foreign port 
during the usual course of its employment as a vessel engaged in trade.
    (5) It is a yacht or other pleasure vessel not carrying passengers 
or merchandise in trade.
    (6) It is engaged exclusively in scientific activities.
    (7) It is engaged exclusively in laying or repairing cables.
    (8) It is engaged in whaling or other fisheries, even though it may 
have entered a foreign port for fuel or supplies, if it did not carry 
passengers or merchandise in trade.
    (9) It is a passenger vessel making three trips or more a week 
between a port of the United States and a foreign port.
    (10) It is used exclusively as a ferry boat, including a car ferry.
    (11) It is a tug with a Great Lakes license endorsement on its 
vessel document, when towing vessels which are required to make entry.
    (12) It is a documented vessel with a Great Lakes license 
endorsement which has touched at an intermediate foreign port or ports 
during a coastwise voyage.
    (13) It enters otherwise than by sea from a foreign port at which 
tonnage or lighthouse duties or equivalent taxes are not imposed on 
vessels of the United States (applicable only where the vessel arrives 
from a port in the province of Ontario, Canada).
    (14) It is a coastwise-qualified vessel solely engaged in the 
coastwise trade (although arriving from a foreign port or place, it is 
engaged in the transportation of merchandise or passengers, or the 
towing of a vessel other than a vessel in distress, between points in 
the U.S. via a foreign point) (see Sec. Sec. 4.80, 4.80a, 4.80b, and 
4.92).
    (15) It is a vessel entering directly from the Virgin Islands 
(U.S.), American Samoa, the islands of Guam, Wake, Midway, Canton, or 
Kingman Reef, or Guantanamo Bay Naval Station.
    (16) It is a vessel making regular daily trips between any port of 
the United States and any port in Canada wholly upon interior waters not 
navigable to the ocean, except that such a vessel shall pay tonnage 
taxes upon her first arrival in each calendar year.
    (17) It is a vessel arriving at a port in the United States which, 
while proceeding between ports in the United States, touched at a 
foreign port under circumstances which would have exempted it from 
making entry under section 441(4), Tariff Act of 1930, as amended (19 
U.S.C. 1441(4)), had it touched at a United States port.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 72-264, 37 FR 20317, 
Sept. 29, 1972; T.D. 75-110, 40 FR 21027, May 15, 1975; T.D. 75-206, 40 
FR 34586, Aug. 18, 1975; T.D. 79-276, 44 FR 61956, Oct. 29, 1979; T.D. 
83-214, 48 FR 46512, Oct. 13, 1983; T.D. 93-12, 58 FR 13197, Mar. 10, 
1993]



Sec. 4.22  Exemptions from special tonnage taxes.

    Vessels of the following nations are exempted by treaties, 
Presidential proclamations, or orders of the Secretary of the Treasury 
from the payment of any higher tonnage duties than are applicable to 
vessels of the United States and are exempted from the payment of light 
money:

Algeria.
Antigua and Barbuda.
Arab Republic of Egypt.
Argentina.
Australia.
Austria.
Bahamas, The.
Bahrain.
Bangladesh.
Barbados.
Belgium.
Belize.
Bermuda.
Bolivia.
Brazil.
Bulgaria.
Burma.
Canada.
Chile.
Colombia.
Costa Rica.
Cuba.
Cyprus.
Czechoslovakia.
Denmark (including the Faeroe Islands).
Dominica.
Dominican Republic.
Ecuador.
El Salvador.
Estonia.
Ethiopia.
Fiji.
Finland.
France.

[[Page 31]]

Gambia, The.
German Democratic Republic.
German Federal Republic.
Ghana.
Great Britain (including the Cayman Islands).
Greece.
Greenland.
Guatemala.
Guinea, Republic of.
Guyana.
Haiti.
Honduras.
Hong Kong.
Hungarian People's Republic
Iceland.
India.
Indonesia.
Iran.
Iraq.
Ireland (Eire).
Israel.
Italy.
Ivory Coast, Republic of.
Jamaica.
Japan.
Kenya.
Korea.
Kuwait.
Latvia.
Lebanon.
Liberia.
Libya.
Luxembourg.
Malaysia.
Malta.
Marshall Islands, Republic of.
Mauritius.
Mexico.
Monaco.
Morocco.
Nauru, Republic of.
Netherlands.
Netherlands Antilles.
New Zealand.
Nicaragua.
Nigeria.
Norway.
Oman.
Pakistan.
Panama.
Papua New Guinea.
Paraguay.
People's Republic of China.
Peru.
Philippines.
Poland.
Portugal.
Qatar.
Rumania.
Saudi Arabia.
Senegal.
Singapore, Republic.
Somali, Republic.
Spain.
Sri Lanka.
St. Vincent and The Grenadines.
Surinam, Republic of.
Sweden.
Switzerland.
Syrian Arab Republic.
Taiwan.
Thailand.
Togo.
Tonga.
Tunisia.
Turkey.
Tuvalu.
Union of South Africa.
Union of Soviet Socialist Republics.
United Arab Emirates (Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, 
Sharjah, and Umm Al Qaiwain).
Uruguay.
Vanuatu, Republic of.
Venezuela.
Yugoslavia.
Zaire.

[28 FR 14596, Dec. 31, 1963]

    Editorial Note: For Federal Register citations affecting Sec. 4.22, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.



Sec. 4.23  Certificate of payment and cash receipt.

    Upon each payment of tonnage tax or light money, the master of the 
vessel shall be given a certificate on Customs Form 1002 on which the 
control number of the cash receipt (Customs Form 368 or 368A) upon which 
payment was recorded shall be written. This certificate shall constitute 
the official evidence of such payment and shall be presented upon each 
entry during the tonnage year to establish the date of commencement of 
the tonnage year and to insure against overpayment. In the absence of 
the certificate, evidence of payment of tonnage tax shall be obtained 
from the port director to whom the payment was made.

[T.D. 85-71, 50 FR 15415, Apr. 18, 1985, as amended by T.D. 92-56, 57 FR 
24943, June 12, 1992]



Sec. 4.24  Application for refund of tonnage tax.

    (a) The authority to make refunds in accordance with section 26 of 
the Act of June 26, 1884 (46 U.S.C. 8) of regular tonnage taxes 
described in Sec. 4.20(a) is delegated to the Directors of the ports 
where the collections were made. If any

[[Page 32]]

doubt exists, the case shall first be referred to Headquarters, U.S. 
Customs Service for advice.
    (b) Each application for refund of regular or special tonnage tax or 
light money prepared in accordance with this section shall be filed with 
the Customs officer to whom payment was made. After verification of the 
pertinent facts asserted in the claim, the application shall be 
forwarded with any necessary report or recommendation to the appropriate 
port director. Applications for refund of special tonnage tax and light 
money (see Sec. 4.20(c)) with the reports and recommendations submitted 
therewith shall be forwarded by the port director to the Commissioner of 
Customs for decision. Any refund authorized by the Port Director under 
paragraph (a) of this section or any refund of special tonnae tax or 
light money authorized by the Commissioner of Customs shall be made by 
the appropriate Customs officer. The records of tonnage tax shall be 
clearly noted to show each refund authorized.
    (c) The application shall be a direct request for the refund of a 
definite sum, showing concisely the reasons therefor, the nationality 
and name of the vessel, and the date, place, and amount of each payment 
for which refund is requested. The application shall be made within 1 
year from date of the payment. A protest against a payment shall not be 
accepted as an application for its refund.
    (d) When the application is based upon a claim that more than five 
payments of regular tax at either the 2-cent or the 6-cent rate have 
been made during a tonnage year, the application shall be supported by a 
statement from the appropriate Customs officer at the port where the 
application is submitted and from the appropriate Customs officer at 
each port at which any claimed payment was made verifying the facts and 
showing in each case whether refunds have been authorized.
    (e) The application shall include a certificate by the owner or by 
the owner's agent that payment of tonnage tax at the applicable rate has 
been or will be made for each entry of the vessel on a voyage on which 
that rate is applicable before the end of the current tonnage year, 
exclusive of any payment which has been refunded or which may be 
refunded as a result of such application.
    (f) The owner or operator of the vessel involved, or other party in 
interest, may file with the port Director a petition addressed to the 
Commissioner of Customs for a review of the port director's decision on 
an application for refund of regular tonnage tax. Such petition shall be 
filed in duplicate within 30 days from the date of notice of the initial 
decision, shall completely identify the case, and shall set forth in 
detail the exceptions to the decision.

[T.D. 71-274, 36 FR 21025, Nov. 3, 1971, as amended by T.D. 95-77, 60 FR 
50010, Sept. 27, 1995]

                      Landing and Delivery of Cargo



Sec. 4.30  Permits and special licenses for unlading and lading.

    (a) Except as prescribed in paragraph (f), (g), or (k) of this 
section or in Sec. 123.8 of this chapter, and except in the case of a 
vessel exempt from entry or clearance fees under 19 U.S.C. 288, no 
passengers, cargo, baggage, or other article shall be unladen from a 
vessel which arrives directly or indirectly from any port or place 
outside the Customs territory of the U.S., including the adjacent waters 
(see Sec. 4.6 of this part), or from a vessel which transits the Panama 
Canal and no cargo, baggage, or other article shall be laden on a vessel 
destined to a port or place outside the Customs territory of the U.S., 
including the adjacent waters (see Sec. 4.6 of this part) if Customs 
supervision of such lading is required, until the port director shall 
have issued a permit or special license therefore on Customs Form 3171 
or electronically pursuant to an authorized electronic data interchange 
system or other means of communication approved by the Customs Service.
    (1) U.S. and foreign vessels arriving at a U.S. port directly from a 
foreign port or place are required to make entry, whether it be formal 
or, as provided in Sec. 4.8, preliminary, before the port director may 
issue a permit or special license to lade or unlade.
    (2) U.S. vessels arriving at a U.S. port from another U.S. port at 
which formal entry was made may be issued a permit

[[Page 33]]

or special license to lade or unlade without having to make either 
preliminary or formal entry at the second and subsequent ports. Foreign 
vessels arriving at a U.S. port from another U.S. port at which formal 
entry was made may be issued a permit or special license to lade or 
unlade at the second and subsequent ports prior to formal entry without 
the necessity of making preliminary entry. In these circumstances, after 
the master has reported arrival of the vessel, the port director may 
issue the permit or special license or may, in his discretion, require 
the vessel to be boarded, the master to make an oath or affirmation to 
the truth of the statements contained in the vessel's manifest to the 
Customs officer who boards the vessel, and require delivery of the 
manifest prior to issuing the permit.
    (b) Application for a permit or special license will be made by the 
master, owner, or agent of the vessel on Customs Form 3171, or 
electronically pursuant to an authorized electronic data interchange 
system or other means of communication approved by the Customs Service, 
and will specifically indicate the type of service desired at that time, 
unless a term permit or term special license has been issued. Vessels 
that arrive in a Customs port with more than one vessel carrier sharing 
or leasing space on board the vessel (such as under a vessel sharing or 
slot charter arrangement) are required to indicate on the CF 3171 all 
carriers on board the vessel and indicate whether each carrier is 
transmitting its cargo declaration electronically or is presenting it on 
the Customs Form 1302. In the case of a term permit or term special 
license, upon entry of each vessel, a copy of the term permit or special 
license must be submitted to Customs during official hours in advance of 
the rendering of services so as to update the nature of the services 
desired and the exact times they will be needed. Permits must also be 
updated to reflect any other needed changes including those in the name 
of the vessel as well as the slot charter or vessel sharing parties. An 
agent of a vessel may limit his application to operations involved in 
the entry and unlading of the vessel or to operations involved in its 
lading and clearance. Such limitation will be specifically noted on the 
application.
    (c) The request for a permit or a special license shall not be 
approved (previously issued term permits or special licenses shall be 
revoked) unless the carrier complies with the provisions of paragraphs 
(l) and (m) of this section regarding terminal facilities and employee 
lists, and the required cash deposit or bond has been filed on Customs 
Form 301, containing the bond conditions set forth in Sec. 113.64 of 
this chapter relating to international carriers. \62\ When a carrier has 
on file a bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.63 of this chapter relating to basic custodial bond 
conditions, no further bond shall be required solely by reason of the 
unlading or lading at night or on a Sunday or holiday of merchandise or 
baggage covered by bonded transportation entries. Separate bonds shall 
be required if overtime services are requested by different principals.
---------------------------------------------------------------------------

    \62\ ``Before any such special license to unlade shall be granted, 
the master, owner, or agent of such vessel or vehicle, or the person in 
charge of such vehicle, shall be required to deposit sufficient money to 
pay, or to give a bond in an amount to be fixed by the Secretary 
conditioned to pay, the compensation and expenses of the customs 
officers and employees assigned to duty in connection with such unlading 
at night or on Sunday or a holiday, in accordance with the provisions of 
section 5 of the act of February 13, 1911, as amended (U.S.C. 1952 
edition, title 19 sec. 267). In lieu of such deposit or bond the owner 
or agent of any vessel or vehicle or line of vessels or vehicles may 
execute a bond in an amount to be fixed by the Secretary of the Treasury 
to cover and include the issuance of special licenses for the unlading 
of such vessels or vehicles for a period not to exceed one year. * * *'' 
(Tariff Act of 1930, section 451, as amended, 19 U.S.C. 1451)
    63-66 [Reserved]
---------------------------------------------------------------------------

    (d) Except as prescribed in paragraph (f) or (g) of this section, a 
separate application for a permit or special license shall be filed in 
the case of each arrival.
    (e) Stevedoring companies and others concerned in lading or unlading 
merchandise, or in removing or otherwise securing it, shall ascertain 
that the applicable preliminary Customs requirements have been complied 
with before

[[Page 34]]

commencing such operation, since performance in the absence of such 
compliance render them severally liable to the penalties prescribed in 
section 453, Tariff Act of 1930, even though they may not be responsible 
for taking the action necessary to secure compliance.
    (f) The port director may issue a term permit on Customs Form 3171, 
which will remain in effect until revoked by the port director, 
terminated by the carrier, or automatically cancelled by termination of 
the supporting continuous bond, to unlade merchandise, passengers, or 
baggage, or to lade merchandise or baggage during official hours.
    (g) The port director may issue a term special license on Customs 
Form 3171, which will remain in effect until revoked by the port 
director, terminated by the carrier, or automatically cancelled by 
termination of the supporting continuous bond, to unlade merchandise, 
passengers, or baggage, or to lade merchandise or baggage during 
overtime hours or on a Sunday or holiday when Customs supervision is 
required. (See Sec. 24.16 of this chapter regarding pleasure vessels.)
    (h) A special license for the unlading or lading of a vessel at 
night or on a Sunday or holiday shall be refused by the port director if 
the character of the merchandise or the conditions or facilities at the 
place of unlading or lading render the issuance of such special license 
dangerous to the revenue. In no case shall a special license for 
unlading or lading at night or on a Sunday or holiday be granted except 
on the ground of commercial necessity.
    (i) The port director shall not issue a permit or special license to 
unlade cargo or equipment of vessels arriving directly or indirectly 
from any port or place outside the United States, except on compliance 
with one or more of the following conditions:
    (1) The merchandise shall have been duly entered and permits issued; 
or
    (2) A bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.64 of this chapter relating to international 
carriers, or cash deposit shall have been given; or
    (3) The merchandise is to be discharged into the custody of the port 
director as provided for in section 490(b), Tariff Act of 1930.
    (j) Bonds are not required under this section for vessels owned by 
the United States and operated for its account.
    (k) In the case of vessels of 5 net tons or over which are used 
exclusively as pleasure vessels and which arrive from any country, the 
port director in his discretion and under such conditions as he deems 
advisable may allow the required application for unlading passengers and 
baggage to be made orally, and may authorize his inspectors to grant 
oral permission for unlading at any time, and to grant requests on 
Customs Form 3171 for overtime services.
    (l) A permit to unlade pursuant to this part 4 or part 122 of this 
chapter shall not be granted unless the port director determines that 
the applicant provides or the terminal at which the applicant will 
unlade the cargo provides (1) sufficient space, capable of being locked, 
sealed, or otherwise secured, for the storage immediately upon unlading 
of cargo whose weight-to-value ratio renders it susceptible to theft or 
pilferage and of packages which have been broken prior to or in the 
course of unlading; and (2) an adequate number of vehicles, capable of 
being locked, sealed, or otherwise secured, for the transportation of 
such cargo or packages between the point of unlading and the point of 
storage. A term permit to unlade shall be revoked if the port director 
determines subsequent to such issuance that the requirements of this 
paragraph have not been met.
    (m) A permit to unlade pursuant to this part 4 or part 122 of this 
chapter shall not be granted to an importing carrier, and a term permit 
to unlade previously granted to such a carrier shall be revoked, (1) if 
such carrier, within 30 days after the date of receipt of a written 
demand by the port director, does not furnish a written list of the 
names, addresses, social security numbers, and dates and places of birth 
of persons it employs in connection with the unlading, storage and 
delivery of imported merchandise; or (2) if, having furnished such a 
list, the carrier does not advise the port director in writing of the 
names, addresses, social security numbers, and dates and places

[[Page 35]]

of birth of any new personnel employed in connection with the unlading, 
storage and delivery of imported merchandise within 10 days after such 
employment. If the employment of any such person is terminated, the 
carrier shall promptly advise the port director. For the purposes of 
this part, a person shall not be deemed to be employed by a carrier if 
he is an officer or employee of an independent contractor engaged by a 
carrier to load, unload, transport or otherwise handle cargo.
    (n)(1) Customs will not issue a permit to unlade before it has 
received the cargo declaration information pursuant to Sec. 4.7(b). In 
cases in which Customs does not receive complete cargo manifest 
information from the carrier or from the NVOCC, in the manner and format 
required by Sec. 4.7(b), 24 hours prior to the lading of the cargo 
aboard the vessel at the foreign port, Customs may delay issuance of a 
permit to unlade the entire vessel until all required information is 
received. Customs may also decline to issue a permit to unlade the 
specific cargo for which a declaration is not received 24 hours before 
lading in a foreign port. Furthermore, where the carrier does not 
present an advance cargo manifest to Customs electronically, in the 
manner provided in Sec. 4.7(b)(2), preliminary entry pursuant to Sec. 
4.8(b) will be denied.
    (2) In addition, while the advance presentation of the cargo 
manifest for any vessel subject to Sec. 4.7(b)(2) may be made in paper 
form or by electronic transmission through a Customs-approved electronic 
data interchange system, the submission of an electronic manifest for 
the cargo in this regard, as opposed to a paper manifest, will further 
facilitate the prompt issuance of a permit to unlade the cargo.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 68-247, 33 FR 15022, 
Oct. 8, 1968; T.D. 71-39, 36 FR 1891, Feb. 3, 1971; T.D. 72-189, 38 FR 
13975, July 15, 1972; T.D. 73-27, 38 FR 2448, Jan. 26, 1973; T.D. 84-
213, 49 FR 41163, Oct. 19, 1984; T.D. 88-12, 53 FR 9314, Mar. 22, 1988; 
T.D. 92-74, 57 FR 35751, Aug. 11, 1992; T.D. 93-66, 58 FR 44130, Aug. 
19, 1993; T.D. 93-96, 58 FR 67316, Dec. 21, 1993; T.D. 94-2, 58 FR 
68523, Dec. 28, 1993; T.D. 95-77, 60 FR 50010, Sept. 27, 1995; T.D. 96-
11, 61 FR 2414, Jan. 26, 1996; T.D. 93-96, 61 FR 3569, Feb. 1, 1996; 
T.D. 00-4, 65 FR 2873, Jan. 19, 2000; T.D. 02-62, 67 FR 66332, Oct. 31, 
2002]



Sec. 4.31  Unlading or transshipment due to casualty.

    (a) When any cargo or stores of a vessel have been unladen or 
transshipped at any place in the United States or its Customs waters 
other than a port of entry because of accident, stress of weather, or 
other necessity, no penalty shall be imposed under section 453 or 
586(a), Tariff Act of 1930, if due notice is given to the director of 
the port at which the vessel thereafter first arrives and satisfactory 
proof is submitted to him as provided for in section 586(f), Tariff Act 
of 1930, as amended, regarding such accident, stress of weather, or 
other necessity. The port director may accept the certificates of the 
master and two or more officers or members of the crew of the vessel, of 
whom the person next to the master in command shall be one, as proof 
that the unlading or transshipment was necessary by reason of 
unavoidable cause.
    (b) The port director may then permit entry of the vessel and its 
cargo and permit the unlading of the cargo in such place at the port as 
he may deem proper. Unless its transportation has been in violation of 
the coastwise laws, the cargo may be cleared through Customs at the port 
where it is discharged or forwarded to the port of original destination 
under an entry for immediate transportation or for transportation and 
exportation, as the case may be. All regulations shall apply in such 
cases as if the unlading and delivery took place at the port of original 
destination.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 95-77, 60 FR 50010, 
Sept. 27, 1995]

[[Page 36]]



Sec. 4.32  Vessels in distress; landing of cargo.

    (a) When a vessel from a foreign port arrives in distress at a port 
other than that to which it is destined, a permit to land merchandise or 
baggage may be issued if such action is necessary. Merchandise and 
baggage so unladen shall be taken into Customs custody and, if it has 
not been transported in violation of the coastwise laws, may be entered 
and disposed of in the same manner as any other imported merchandise or 
may be reladen without entry to be carried to its destination on the 
vessel from which it was unladen, subject only to charges for storage 
and safekeeping.
    (b) A bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.64 of this chapter relating to international carriers 
shall be given in an amount to be determined by the port director to 
insure the proper disposition of the cargo, whether such cargo be 
dutiable or free.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 84-213, 49 FR 41164, 
Oct. 19, 1984]



Sec. 4.33  Diversion of cargo.

    (a) Unlading at other than original port of destination. A vessel 
may unlade cargo or baggage at an alternative port of entry to the port 
of original destination if:
    (1) It is compelled by any cause to put into the alternative port 
and the director of that port issues a permit for the unlading of cargo 
or baggage; or
    (2) As a result of an emergency existing at the port of destination, 
the port director authorizes the vessel to proceed in accordance with 
the residue cargo bond procedure to the alternative port. The owner or 
agent of the vessel shall apply for such authorization in writing, 
stating the reasons and agreeing to hold the port director and the 
Government harmless for the diversion.
    (b) Disposition of cargo or baggage at emergency port. Cargo and 
baggage unladen at the alternative port under the circumstances set 
forth in paragraph (a) of this section may be:
    (1) Entered in the same manner as other imported cargo or baggage;
    (2) Treated as unclaimed and stored at the risk and expense of its 
owner; or
    (3) Reladen upon the same vessel without entry, for transportation 
to its original destination.
    (c) Substitution of ports of discharge on manifest. After entry, the 
Cargo Declaration, Customs Form 1302, of a vessel may be changed at any 
time to permit discharge of manifested cargo at any domestic port in 
lieu of any other port shown on the Cargo Declaration, if:
    (1) A written application for the diversion is made on the amended 
Cargo Declaration by the master, owner, or agent of the vessel to the 
director of the port where the vessel is located, after entry of the 
vessel at that port;
    (2) An amended Cargo Declaration, under oath, covering the cargo, 
which it is desired to divert, is furnished in support of the 
application and is filed in such number of copies as the port director 
shall require for local Customs purposes; and
    (3) The certified traveling manifest is not altered or added to in 
any way by the master, owner, or agent of the vessel. When an 
application under paragraph (c)(1) of this section is approved, the port 
director shall securely attach an approved copy of the amended manifest 
to the traveling manifest and shall send one copy of the amended Cargo 
Declaration to the director of the port where the vessel's bond was 
filed.
    (d) Retention of cargo on board for later return to the United 
States. If, as the result of a strike or other emergency at a United 
States port for which inward foreign cargo is manifested, it is desired 
to retain the cargo on board the vessel for discharge at a foreign port 
but with the purpose of having the cargo returned to the United States, 
an application may be made by the master, owner, or agent of the vessel 
to amend the vessel's Cargo Declaration, Customs Form 1302, under a 
procedure similar to that described in paragraph (c) of this section, 
except that a foreign port shall be substituted for the domestic port of 
discharge. If the application is approved, it shall be handled in the 
same manner as an application filed under paragraph (c) of this section. 
However, before approving the application, the port director is 
authorized to

[[Page 37]]

require such bond as he deems necessary to insure that export control 
laws and regulations are not circumvented.

[T.D. 77-255, 42 FR 56320, Oct. 25, 1977]



Sec. 4.34  Prematurely discharged, overcarried, and undelivered cargo.

    (a) Prematurely landed cargo. Upon receipt of a satisfactory written 
application from the owner or agent of a vessel establishing that cargo 
was prematurely landed and left behind by the importing vessel through 
error or emergency, the port director may permit inward foreign cargo 
remaining on the dock to be reladen on the next available vessel owned 
or chartered by the owner of the importing vessel for transportation to 
the destination shown on the Cargo Declaration, Customs Form 1302, of 
the first vessel, provided the importing vessel actually entered the 
port of destination of the prematurely landed cargo. Unless so forwarded 
within 30 days from the date of landing, the cargo shall be 
appropriately entered for Customs clearance or for forwarding in bond; 
otherwise, it shall be sent to general order as unclaimed. If the 
merchandise is so entered for Customs clearance at the port of unlading, 
or if it is so forwarded in bond, other than by the importing vessel or 
by another vessel owned or chartered by the owner of the importing 
vessel, representatives of the importing vessel shall file at the port 
of unlading a Cargo Declaration in duplicate listing the cargo. The port 
director shall retain the original and forward the duplicate to the 
director of the originally intended port of discharge.
    (b) Overcarried cargo. Upon receipt of a satisfactory written 
application by the owner or agent of a vessel establishing that cargo 
was not landed at its destination and was overcarried to another 
domestic port through error or emergency, the port director may permit 
the cargo to be returned in the importing vessel, or in another vessel 
owned or chartered by the owner of the importing vessel, to the 
destination shown on the Cargo Declaration, Customs Form 1302, of the 
importing vessel, provided the importing vessel actually entered the 
port of destination. \67\
---------------------------------------------------------------------------

    \67\ See Sec. 141.69(c) of this chapter for the conditions under 
which such merchandise and goods removed from a port of intended entry 
under these or certain other circumstances may subsequently be cleared 
under a consumption entry which had been filed therefore before the 
merchandise was removed from the port of intended entry.
    68-69 [Reserved]
---------------------------------------------------------------------------

    (c) Inaccessibly stowed cargo. Cargo so stowed as to be inaccessible 
upon arrival at destination may be retained on board, carried forward to 
another domestic port or ports, and returned to the port of destination 
in the importing vessel or in another vessel owned or chartered by the 
owner of the importing vessel in the same manner as other overcarried 
cargo.
    (d) Application for forwarding cargo. When it is desired that 
prematurely landed cargo, overcarried cargo, or cargo so stowed as to be 
inaccessible, be forwarded to its destination by the importing vessel or 
by another vessel owned or chartered by the owner of the importing 
vessel in accordance with paragraph (a), (b), or (c) of this section, 
the required application shall be filed with the local director of the 
port of premature landing or overcarriage by the owner or agent of the 
vessel. The application shall be supported by a Cargo Declaration, 
Customs Form 1302, in such number of copies as the port director may 
require. Whenever practicable, the application shall be made on the face 
of the Cargo Declaration below the description of the merchandise. The 
application shall specify the vessel on which the cargo was imported, 
even though the forwarding to destination is by another vessel owned or 
chartered by the owner of the importing vessel, and all ports of 
departure and dates of sailing of the importing vessel. The application 
shall be stamped and signed to show that it has been approved.
    (e) Manifesting prematurely landed or overcarried cargo. One copy of 
the Cargo Declaration, Customs Form 1302, shall be certified by Customs 
for use as a substitute traveling manifest for the prematurely landed or 
overcarried cargo being forwarded as residue cargo, whether or not the 
forwarding vessel is

[[Page 38]]

also carrying other residue cargo. If the application for forwarding is 
made on the Cargo Declaration, the new substitute traveling manifest 
shall be stamped to show the approval of the application. If the 
application is on a separate document, a copy thereof, stamped to show 
its approval, shall be attached to the substitute traveling manifest. An 
appropriate cross-reference shall be placed on the original traveling 
manifest to show that the vessel has one or more substitute traveling 
manifests. A permit to proceed endorsed on a Vessel Entrance or 
Clearance Statement, Customs Form 1300, issued to the vessel 
transporting the prematurely landed or overcarried cargo to its 
destination shall make reference to the nature of such cargo, 
identifying it with the importing vessel.
    (f) Residue cargo procedure. A vessel with prematurely landed or 
overcarried cargo on board shall comply upon arrival at all domestic 
ports of call with all the requirements of part 4 relating to foreign 
residue cargo for domestic ports. The substitute traveling manifest, 
carried forward from port to port by the oncarrying vessel, shall be 
finally surrendered at the port where the last portion of the 
prematurely landed or overcarried cargo is discharged.
    (g) Cargo undelivered at foreign port and returned to the U.S. 
Merchandise shipped from a domestic port, but undelivered at the foreign 
destination and returned, shall be manifested as ``Undelivered-to be 
returned to original foreign destination,'' if such a return is 
intended. The port director may issue a permit to retain the merchandise 
on board, or he may, upon written application of the steamship company, 
issue a permit on a Delivery Ticket, Customs Form 6043, allowing the 
merchandise to be transferred to another vessel for return to the 
original foreign destination. No charge shall be made against the bond 
on Customs Form 301, containing the bond conditions relating to 
international carriers set forth in Sec. 113.64 of this chapter. The 
items shall be remanifested outward and an explanatory reference of the 
attending circumstances and compliance with export requirements noted.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 77-255, 42 FR 56321, 
Oct. 25, 1977; T.D. 85-123, 50 FR 29952, July 23, 1985; T.D. 95-77, 60 
FR 50010, Sept. 27, 1995; T.D. 00-22, 65 FR 16515, Mar. 29, 2000]



Sec. 4.35  Unlading outside port of entry.

    (a) Upon written application from the interested party, the port 
director concerned, if he considers it necessary, may permit any vessel 
laden with merchandise in bulk to proceed, after entry, to any place 
outside the port where the vessel entered which such port director may 
designate for the purpose of unlading such cargo.
    (b) In such case a deposit of a sum sufficient to reimburse the 
Government for the compensation, travel, and subsistence expenses of the 
officers detailed to supervise the unlading and delivery of the cargo 
may be required by the port director.

[28 FR 14596, Dec. 31, 1963, as amended at T.D. 95-77, 60 FR 50010, 
Sept. 27, 1995]



Sec. 4.36  Delayed discharge of cargo.

    (a) When pursuant to section 457, Tariff Act of 1930, customs 
officers are placed on a vessel which has retained merchandise on board 
more than 25 days after the date of the vessel's arrival, their 
compensation and subsistence expenses shall be reimbursed to the 
Government by the owner or master.
    (b) The compensation of all Customs officers and employees assigned 
to supervise the discharge of a cargo within the purview of section 458, 
Tariff Act of 1930, \70\ after the expiration of 25 days after the date 
of the vessel's entry

[[Page 39]]

shall be reimbursed to the Government by the owner or master of the 
vessel.
---------------------------------------------------------------------------

    \70\ ``The limitation of time for unlading shall not extend to 
vessels laden exclusively with merchandise in bulk consigned to one 
consignee and arriving at a port for orders, but if the master of such 
vessel requests a longer time to discharge its cargo, the compensation 
of the inspectors or other customs officers whose services are required 
in connection with the unlading shall, for every day consumed in 
unlading in excess of twenty-five (25) days from the date of the 
vessel's entry, be reimbursed by the master or owner of such vessel.'' 
(Tariff Act of 1930, sec. 458; 19 U.S.C. 1458)
    71-75 [Reserved]
---------------------------------------------------------------------------

    (c) When cargo is manifested ``for orders'' upon the arrival of the 
vessel, no amendment of the manifest to show another port of discharge 
shall be permitted after 15 days after the date of the vessel's arrival, 
except as provided for in Sec. 4.33.
    (d) All reimbursements payable in accordance with this section shall 
be paid or secured to the port director before clearance is granted to 
the vessel.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 95-77, 60 FR 50010, 
Sept. 27, 1995; T.D. 98-74, 63 FR 51287, Sept. 25, 1998]



Sec. 4.37  General order.

    (a) Any merchandise or baggage regularly landed but not covered by a 
permit for its release shall be allowed to remain at the place of 
unlading until the fifteenth calendar day after landing. No later than 
20 calendar days after landing, the master or owner of the vessel or the 
agent thereof shall notify Customs of any such merchandise or baggage 
for which entry has not been made. Such notification shall be provided 
in writing or by any appropriate Customs-authorized electronic data 
interchange system. Failure to provide such notification may result in 
assessment of a monetary penalty of up to $1,000 per bill of lading 
against the master or owner of the vessel or the agent thereof. If the 
value of the merchandise on the bill is less than $1,000, the penalty 
shall be equal to the value of such merchandise.
    (b) Any merchandise or baggage that is taken into custody from an 
arriving carrier by any party under a Customs-authorized permit to 
transfer or in-bond entry may remain in the custody of that party for 15 
calendar days after receipt under such permit to transfer or 15 calendar 
days after arrival at the port of destination. No later than 20 calendar 
days after receipt under the permit to transfer or 20 calendar days 
after arrival under bond at the port of destination, the party shall 
notify Customs of any such merchandise or baggage for which entry has 
not been made. Such notification shall be provided in writing or by any 
appropriate Customs-authorized electronic data interchange system. If 
the party fails to notify Customs of the unentered merchandise or 
baggage in the allotted time, he may be liable for the payment of 
liquidated damages under the terms and conditions of his custodial bond 
(see Sec. 113.63(c)(4) of this chapter).
    (c) In addition to the notification to Customs required under 
paragraphs (a) and (b) of this section, the carrier (or any other party 
to whom custody of the unentered merchandise has been transferred by a 
Customs authorized permit to transfer or in-bond entry) shall provide 
notification of the presence of such unreleased and unentered 
merchandise or baggage to a bonded warehouse certified by the port 
director as qualified to receive general order merchandise. Such 
notification shall be provided in writing or by any appropriate Customs-
authorized electronic data interchange system and shall be provided 
within the applicable 20-day period specified in paragraph (a) or (b) of 
this section. It shall then be the responsibility of the bonded 
warehouse proprietor to arrange for the transportation and storage of 
the merchandise or baggage at the risk and expense of the consignee. The 
arriving carrier (or other party to whom custody of the merchandise was 
transferred by the arriving carrier under a Customs-authorized permit to 
transfer or in-bond entry) is responsible for preparing a Customs Form 
(CF) 6043 (Delivery Ticket), or other similar Customs document 
designated by the port director or an electronic equivalent as 
authorized by Customs, to cover the proprietor's receiptof the 
merchandise and its transport to the warehouse from the custody of the 
arriving carrier (or other party to whom custody of the merchandise was 
transferred by the carrier under a Customs-authorized permit to transfer 
or in-bond entry) (see Sec. 19.9 of this chapter). Any unentered 
merchandise or baggage shall remain the responsibility of the carrier, 
master, or person in charge of the importing vessel or the agent thereof 
or party to whom the merchandise has been transferred under a Customs 
authorized permit to transfer or in-bond entry, until it is properly 
transferred from his control in accordance with this paragraph. If the 
party

[[Page 40]]

to whom custody of the unentered merchandise or baggage has been 
transferred by a Customs-authorized permit to transfer or in-bond entry 
fails to notify a Customs-approved bonded warehouse of such merchandise 
or baggage within the applicable 20-calendar-day period, he may be 
liable for the payment of liquidated damages of $1,000 per bill of 
lading under the terms and conditions of his international carrier or 
custodial bond (see Sec. Sec. 113.63(b), 113.63(c) and 113.64(b) of 
this chapter).
    (d) If a carrier or any other party to whom custody of the unentered 
merchandise has been transferred by means of a Customs-authorized permit 
to transfer or in-bond entry fails to timely relinquish custody of the 
merchandise to a Customs-approved bonded General Order warehouse, the 
carrier or other party may be liable for liquidated damages equal to the 
value of that merchandise under the terms and conditions of his 
international carrier or custodial bond, as applicable.
    (e) If the bonded warehouse operator fails to take possession of 
unentered and unreleased merchandise or baggage within five calendar 
days after receipt of notification of the presence of such merchandise 
or baggage under this section, he may be liable for the payment of 
liquidated damages under the terms and conditions of his custodial bond 
(see Sec. 113.63(a)(1) of this chapter). If the port director finds 
that the warehouse operator cannot accept the goods because they are 
required by law to be exported or destroyed (see Sec. 127.28 of this 
chapter), or for other good cause, the goods will remain in the custody 
of the arriving carrier or other party to whom the goods have been 
transferred under a Customs-authorized permit to transfer or in-bond 
entry. In this event, the carrier or other party will be responsible 
under bond for exporting or destroying the goods, as necessary (see 
Sec. Sec. 113.63(c)(3) and 113.64(b) of this chapter).
    (f) In ports where there is no bonded warehouse authorized to accept 
general order merchandise or if merchandise requires specialized storage 
facilities which are unavailable in a bonded facility, the port 
director, after having received notice of the presence of unentered 
merchandise or baggage in accordance with the provisions of this 
section, shall direct the storage of the merchandise by the carrier or 
by any other appropriate means.
    (g) Whenever merchandise remains on board any vessel from a foreign 
port more than 25 days after the date on which report of arrival of such 
vessel was made, the port director, as prescribed in section 457, Tariff 
Act of 1930, as amended (19 U.S.C. 1457), may take possession of such 
merchandise and cause it to be unladen at the expense and risk of the 
owners of the merchandise. Any merchandise so unladen shall be sent 
forthwith by the port director to a general order warehouse and stored 
at the risk and expense of the owners of the merchandise.
    (h) Merchandise taken into the custody of the port director pursuant 
to section 490(b), Tariff Act of 1930, as amended (19 U.S.C. 1490(b)), 
shall be sent to a general order warehouse after 1 day after the day the 
vessel was entered, to be held there at the risk and expense of the 
consignee.

[T.D. 98-74, 63 FR 51287, Sept. 25, 1998, as amended by T.D. 02-65, 67 
FR 68032, Nov. 8, 2002]



Sec. 4.38  Release of cargo.

    (a) No imported merchandise shall be released from Customs custody 
until a permit to release such merchandise has been granted. Such permit 
shall be issued by the port director only after the merchandise has been 
entered and, except as provided for in Sec. 141.102(d) or part 142 of 
this chapter, the duties thereon, if any, have been estimated and paid. 
Generally, the permit shall consist of a document authorizing delivery 
of a particular shipment or an electronic equivalent. Alternatively, the 
permit may consist of a report which lists those shipments which have 
been authorized for release. This alternative cargo release notification 
may be used when the manifest is not filed by the carrier through the 
Automated Manifest System, the entry has been filed through the 
Automated Broker Interface, and Customs has approved the cargo for 
release without submission of paper documents after reviewing the entry 
data submitted electronically through ABI and its selectivity

[[Page 41]]

criteria (see Sec. 143.34). The report shall be posted in a conspicuous 
area to which the public has access in the customhouse at the port of 
entry where the cargo was imported.
    (1) Where the cargo arrives by vessel, the report shall consist of 
the following data elements:
    (i) Vessel name or code, if transmitted by the entry filer;
    (ii) Carrier code;
    (iii) Voyage number, if transmitted by the entry filer;
    (iv) Bill of lading number;
    (v) Quantity released; and
    (vi) Entry number (including filer code).
    (2) Where the cargo arrives by air, the report shall consist of the 
following data elements:
    (i) Air waybill number;
    (ii) Quantity released;
    (iii) Entry number (including filer code);
    (iv) Carrier code; and
    (v) Flight number, if transmitted by the entry filer.
    (3) In the case of merchandise traveling via in-bond movement, the 
report will contain the following data elements:
    (i) Immediate transportation bond number;
    (ii) Carrier code;
    (iii) Quantity released; and
    (iv) Entry number (including filer code).

When merchandise is released without proper permit before entry has been 
made, the port director shall issue a written demand for redelivery. The 
carrier or facility operator shall redeliver the merchandise to Customs 
within 30 days after the demand is made. The port director may authorize 
unentered merchandise brought in by one carrier for the account of 
another carrier to be transferred within the port to the latter 
carrier's facility. Upon receipt of the merchandise the latter carrier 
assumes liability for the merchandise to the same extent as though the 
merchandise had arrived on its own vessel.
    (b) When packages of merchandise bear marks or numbers which differ 
from those appearing on the Cargo Declaration, Customs Form 1302, of the 
importing vessel for the same packages and the importer or a receiving 
bonded carrier, with the concurrence of the importing carrier, makes 
application for their release under such marks or numbers, either for 
consumption or for transportation in bond under an entry filed therefor 
at the port of discharge from the importing vessel, the port director 
may approve the application upon condition that (1) the contents of the 
packages be identified with an invoice or transportation entry as set 
forth below and (2) the applicant furnish at his own expense any bonded 
cartage or lighterage service which the granting of the application may 
require. The application shall be in writing in such number of copies as 
may be required for local Customs purposes. Before permitting delivery 
of packages under such an application, the port director shall cause 
such examination thereof to be made as will reasonably identify the 
contents with the invoice filed with the consumption entry. If the 
merchandise is entered for transportation in bond without the filing of 
an invoice, such examination shall be made as will reasonably identify 
the contents of the packages with the transportation entry.
    (c) If the port director determines that, in a port or portion of a 
port, the volume of cargo handled, the incidence of theft or pilferage, 
or any other factor related to the protection of merchandise in Customs 
custody requires such measures, he shall require as a condition to the 
granting of a permit to release imported merchandise that the importer 
or his agent present to the carrier or his agent a fully executed pickup 
order in substantially the following format, in triplicate, to obtain 
delivery of any imported merchandise:

[[Page 42]]

[GRAPHIC] [TIFF OMITTED] TC14NO91.167


The pickup order shall contain a duly authenticated customhouse broker's 
signature, unless it is presented by a person properly identified as an 
employee or agent of the ultimate consignee. When delivered quantities 
are verified by a Customs officer, he shall certify all copies of the 
pickup order, returning one to the importer or his agent and two to the 
carrier making delivery.
    (d) When the provisions of paragraph (c) of this section are invoked 
by the port director and verification of delivered quantities by Customs 
is required, a permit to release merchandise shall be effective as a 
release from Customs custody at the time that the delivery of the 
merchandise covered by the pickup order into the physical possession of 
a subsequent carrier or an importer or the agent of either is completed 
under the supervision of a Customs officer, and only to the extent of 
the actual delivery of merchandise described in such pickup order as 
verified by such Customs officer.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 71-39, 36 FR 1892, Feb. 
3, 1971; T.D. 77-255, 42 FR 56321, Oct. 25, 1977; T.D. 91-46, 56 FR 
22330, May 15, 1991; 56 FR 27559, June 14, 1991]



Sec. 4.39  Stores and equipment of vessels and crews' effects; unlading 
or lading and retention on board.

    (a) The provisions of Sec. 4.30 relating to unlading under a permit 
on Customs Form 3171 are applicable to the unlading of articles, other 
than cargo or baggage, which have been laden on a vessel outside the 
Customs territory of the United States, regardless of the trade in which 
the vessel may be engaged at the time of unlading, except that such 
provisions do not apply to such articles which have already been 
entered.
    (b) Any articles other than cargo or baggage landed for delivery for 
consumption in the United States shall be treated in the same manner as 
other imported articles. A notation as to the landing of such articles, 
together with the number of the entry made therefor, shall be made on 
the vessel's store list, but such notation shall not subject the 
articles to the requirement of being included in a post entry to the 
manifest.
    (c) Bags or dunnage constituting equipment of a vessel may be landed 
temporarily and reladen on such vessel under Customs supervision without 
entry.
    (d) Articles claimed to be sea or ships' stores which are in excess 
of the reasonable requirements of the vessel

[[Page 43]]

on which they are found shall be treated as cargo of such vessel.
    (e) Under section 446, Tariff Act of 1930, port directors may permit 
narcotic drugs, except smoking opium, in reasonable quantities and 
properly listed as medical stores to remain on board vessels if 
satisfied that such drugs are adequately safeguarded and used only as 
medical supplies.
    (f) Application for permission to transfer bunkers, stores or 
equipment as provided for in the proviso to section 446, Tariff Act of 
1930, shall be made and the permit therefor granted on Customs Form 
3171.
    (g) Equipment of a vessel arriving either directly or indirectly 
from a foreign port or place, if in need of repairs in the United 
States, may be unladen from and reladen upon the same vessel under the 
procedures set forth in Sec. 4.30 relating to the granting of permits 
and special licenses on Customs Form 3171 (CF 3171). Adequate protection 
of the revenue is insured under the appropriate International Carrier 
Bond during the period that equipment is temporarily landed for repairs 
(see Sec. 113.64(b) of this chapter), and so resort to the procedures 
established for the temporary importation of merchandise under bond is 
unnecessary. Once equipment which has been unladen under the terms of a 
CF 3171 has been reladen on the same vessel, potential liability for 
that transaction existing under the bond will be extinguished.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 93-66, 58 FR 44130, Aug. 
19, 1993; T.D. 00-61, 65 FR 56790, Sept. 20, 2000]



Sec. 4.40  Equipment, etc., from wrecked or dismantled vessels.

    Ship's or sea stores, supplies, and equipment of a vessel wrecked 
either in the waters of the United States or outside such waters, on 
being recovered and brought into a United States port, and like articles 
landed from a vessel dismantled in a United States port shall be subject 
to the same Customs treatment as would apply if the articles were landed 
from a vessel arriving in the ordinary course of trade. Parts of the 
hull and fittings recovered from a vessel which arrived in the United 
States in the course of navigation and was wrecked in the waters of the 
United States or was dismantled in this country are free of duties and 
import taxes, but if such articles are recovered from vessels outside 
the waters of the United States and brought into a United States port, 
they shall be treated as imported merchandise.



Sec. 4.41  Cargo of wrecked vessel.

    (a) Any cargo landed from a vessel wrecked in the waters of the 
United States or on the high seas shall be subject at the port of entry 
to the same entry requirements and privileges as the cargo of a vessel 
regularly arriving in the foreign trade. In lieu of a Cargo Declaration, 
Customs Form 1302, to cover such cargo, the owner, underwriter (if the 
merchandise has been abandoned to him), or the salvor of the merchandise 
shall make entry on Customs Form 7501, and any such applicant shall be 
regarded as the consignee of the merchandise for Customs purposes. \76\
---------------------------------------------------------------------------

    \76\ ``* * * The underwriters of abandoned merchandise and the 
salvors of merchandise saved from a wreck at sea or on or along a coast 
of the United States may be regarded as the consignees.''* * * (Tariff 
Act of 1930, sec. 483; 19 U.S.C. 1483)
---------------------------------------------------------------------------

    (b) All such merchandise shall be taken into possession by the 
director of the port where it shall first arrive and be retained in his 
custody pending entry. If it is not entered by the person entitled to 
make entry, or is not disposed of pursuant to court order, it shall be 
subject to sale as unclaimed merchandise.
    (c) If such merchandise is from a vessel which has been sunk in 
waters of the United States for 2 years or more and has been abandoned 
by the owner, any person who has salvaged the cargo shall be permitted 
to enter the merchandise at the port where the vessel was wrecked free 
of duty upon the facts being established to the satisfaction of the 
director of the port of entry. \77\ Any

[[Page 44]]

other such merchandise is subject to the same tariff classification as 
like merchandise regularly imported in the ordinary course of trade.
---------------------------------------------------------------------------

    \77\ ``Whenever any vessel laden with merchandise, in whole or in 
part subject to duty, has been sunk in any river, harbor, bay, or waters 
subject to the jurisdiction of the United States, and within its limits, 
for the period of two years and is abandoned by the owner thereof, any 
person who may raise such vessel shall be permitted to bring any 
merchandise recovered therefrom into the port nearest to the place where 
such vessel was so raised free from the payment of any duty thereupon, 
but under such regulations as the Secretary of the Treasury may 
prescribe.'' (Tariff Act of 1930, sec. 310; 19 U.S.C. 1310)
---------------------------------------------------------------------------

    (d) If the merchandise is libeled for salvage, \78\ the port 
director shall notify the United States attorney of the claim of the 
United States for duties, and request him to intervene for such duties.
---------------------------------------------------------------------------

    \78\ Salvors have an uncertain interest in the goods salved, 
dependent upon the decree of a competent tribunal, and have a 
presumptive right without such decree to possession of merchandise 
salved by them from abandoned wrecks. The salvors are entitled in either 
case to make entry of derelict or wrecked goods.
    79-96 [Reserved]

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 77-255, 42 FR 56321, 
Oct. 25, 1977; T.D. 87-75, 52 FR 20066, May 29, 1987; T.D. 95-77, 60 FR 
50010, Sept. 27, 1995; T.D. 99-27, 64 FR 13675, Mar. 22, 1999]

                          Passengers on Vessels



Sec. 4.50  Passenger lists.

    (a) The master of every vessel arriving at a port of the United 
States from a port or place outside the Customs territory (see Sec. 4.6 
of this part) and required to make entry, except a vessel arriving from 
Canada, otherwise than by sea, at a port on the Great Lakes, or their 
connections or tributary waters, shall submit passenger and crew lists, 
as required by Sec. 4.7(a) of this part. If the vessel is arriving from 
noncontiguous foreign territory and is carrying steerage passengers, the 
additional information respecting such passengers required by Customs 
and Immigration Form I-418 shall be included therein.
    (b) A passenger within the meaning of this part is any person 
carried on a vessel who is not connected with the operation of such 
vessel, her navigation, ownership, or business.

[28 FR 14596, Dec. 31, 1963 as amended by T.D. 71-169, 36 FR 12603, July 
2, 1971; T.D. 82-145, 47 FR 35475, Aug. 16, 1982; T.D. 93-96, 58 FR 
67316, Dec. 21, 1993]



Sec. 4.51  Reporting requirements for individuals arriving by vessel.

    (a) Arrival of vessel reported. Individuals on vessels, which have 
reported their arrival to Customs in accordance with19 U.S.C. 1433 and 
Sec. 4.2 of this part, shall remain on board until authorized by 
Customs to depart. Upon departing the vessel, such individuals shall 
immediately report to a designated Customs location together with all of 
their accompanying articles.
    (b) Arrival of vessel not reported. Individuals on vessels, which 
have not reported their arrival to Customs in accordance with 19 U.S.C. 
1433 and Sec. 4.2 of this part, shall immediately notify Customs and 
report their arrival together with appropriate information regarding the 
vessel, and shall present themselves and their accompanying articles at 
a designated Customs location.
    (c) Departure from designated Customs location. Individuals required 
to report to designated Customs locations under this section shall not 
depart from such locations until authorized to do so by any appropriate 
Customs officer.

[T.D. 93-96, 58 FR 67316, Dec. 21, 1993]



Sec. 4.52  Penalties applicable to individuals.

    Individuals violating any of the reporting requirements of Sec. 
4.51 of this part or who present any forged, altered, or false document 
or paper to Customs in connection with this section, may be liable for 
certain civil penalties, as provided under 19 U.S.C. 1459, in addition 
to other penalties applicable under other provisions of law. Further, if 
the violation of these reporting requirements is intentional, upon 
conviction, additional criminal penalties may be applicable, as provided 
by under 19 U.S.C. 1459, in addition to other penalties applicable under 
other provisions of law.

[T.D. 93-96, 58 FR 67317, Dec. 21, 1993; 59 FR 1918, Jan. 13, 1994]

                           Foreign Clearances



Sec. 4.60  Vessels required to clear.

    (a) Unless specifically excepted by law, the following vessels must 
obtain

[[Page 45]]

clearance from the Customs Service before departing from a port or place 
in the United States:
    (1) All vessels departing for a foreign port or place;
    (2) All foreign vessels departing for another port or place in the 
United States;
    (3) All American vessels departing for another port or place in the 
United States that have merchandise on board that is being transported 
in-bond (not including bonded ship's stores or supplies), or foreign 
merchandise for which entry has not been made; and
    (4) All vessels departing for points outside the territorial sea to 
visit a hovering vessel or to receive merchandise or passengers while 
outside the territorial sea, as well as foreign vessels delivering 
merchandise or passengers while outside the territorial sea.
    (b) The following vessels are not required to clear:
    (1) A documented vessel with a pleasure license endorsement or an 
undocumented American pleasure vessel (i.e., an undocumented vessel 
wholly owned by a United States citizen or citizens, whether or not it 
has a certificate of number issued by the State in which the vessel is 
principally used under 46 U.S.C. 1466-1467 and not engaged in trade nor 
violating the Customs or navigation laws of the United States and not 
having visited any hovering vessel (see 19 U.S.C. 1709(d)).
    (2) Any documented vessel with a Great Lakes license endorsement 
which during a voyage on the Great Lakes will touch at a foreign port 
only for taking on bunker fuel. (see Sec. 4.82).
    (3) A vessel exempted from entry by section 441, Tariff Act of 1930. 
(See Sec. 4.5.)
    (4) A vessel of less than 5 net tons which departs from the United 
States to proceed to a contiguous country otherwise than by sea.
    (c) Vessels which will merely transit the Panama Canal without 
transacting any business there shall not be required to be cleared 
because of such transit.
    (d) In the event that departure is delayed beyond the second day 
after clearance, the delay shall be reported within 72 hours after 
clearance to the port director who shall note the fact of detention on 
the certificate of clearance and on the official record of clearance. 
When the proposed voyage is canceled after clearance, the reason 
therefor shall be reported in writing within 24 hours after such 
cancellation and the certificate of clearance and related papers shall 
be surrendered.
    (e) No vessel shall be cleared for the high seas except, a vessel 
bound to another vessel on the high seas to--
    (1) Transship export merchandise which it has transported from the 
U.S. to the vessel on the high seas; or
    (2) Receive import merchandise from the vessel on the high seas and 
transport the merchandise to the U.S.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 79-276, 44 FR 61956, 
Oct. 29, 1979; T.D. 83-214, 48 FR 46512, Oct. 13, 1983; T.D. 85-91, 50 
FR 21429, May 24, 1985; T.D. 94-24, 59 FR 13200, Mar. 21, 1994; T.D. 95-
77, 60 FR 50010, Sept. 27, 1995; T.D. 00-4, 65 FR 2873, Jan. 19, 2000]



Sec. 4.61  Requirements for clearance.

    (a) Application for clearance. A clearance application for a vessel 
intending to depart for a foreign port must be made by filing Customs 
Form 1300 (Vessel Entrance or Clearance Statement) executed by the 
vessel master or other proper officer. The master, licensed deck 
officer, or purser may appear in person to clear the vessel, or the 
properly executed Customs Form 1300 may be delivered to the customhouse 
by the vessel agent or other personal representative of the master. 
Necessary information may also be transmitted electronically pursuant to 
a system authorized by Customs. Clearance will be granted by Customs 
either on the Customs Form 1300 or by approved electronic means. Customs 
port directors may permit the clearance of vessels at locations other 
than the customhouse, and at times outside of normal business hours. 
Customs may take local resources into consideration in allowing 
clearance to be transacted on board vessels themselves or at other 
mutually convenient sites and times either within or outside of port 
limits. Customs must be satisfied that the place designated for 
clearance is sufficiently under Customs control at the

[[Page 46]]

time of clearance, and that the expenses incurred by Customs will be 
reimbursed as authorized. Customs may require that advance notice of 
vessel departure be given prior to granting requests for optional 
clearance locations.
    (b) When clearance required. Under certain circumstances, American 
vessels departing from ports of the United States directly for other 
United States ports must obtain Customs clearance. The clearance of such 
vessels is required when they have merchandise aboard which is being 
transported in-bond, or when they have unentered foreign merchandise 
aboard. For the purposes of the vessel clearance requirements, 
merchandise transported in-bond does not include bonded ship's stores or 
supplies. While American vessels transporting unentered foreign 
merchandise must fully comply with usual clearance procedures, American 
vessels carrying no unentered foreign merchandise but that have in-bond 
merchandise aboard may satisfy vessel clearance requirements by 
reporting intended departure within 72 hours prior thereto by any means 
of communication that is satisfactory to the local Customs port 
director, and by presenting a completed Customs Form 1300 (Vessel 
Entrance or Clearance Statement). Also, the Customs officer may require 
the production of any documents or papers deemed necessary for the 
proper inspection/examination of the vessel, cargo, passenger, or crew. 
Report of departure together with providing information to Customs as 
specified in this paragraph satisfies all clearance requirements for the 
subject vessels.
    (c) Verification of compliance. Before clearance is granted to a 
vessel bound to a foreign port as provided in Sec. 4.60 and this 
section, the port director will verify compliance with respect to the 
following matters:
    (1) Accounting for inward cargo (see Sec. 4.62).
    (2) Outward Cargo Declarations; shippers export declarations (see 
Sec. 4.63).
    (3) Documentation (see Sec. 4.0(c)).
    (4) Verification of nationality and tonnage (see Sec. 4.65).
    (5) Verification of inspection (see Sec. 4.66).
    (6) Inspection under State laws (46 U.S.C. App. 97).
    (7) Closed ports or places (see Sec. 4.67).
    (8) Passengers (see Sec. 4.68).
    (9) Shipping articles and enforcement of Seamen's Act (see Sec. 
4.69).
    (10) Medicine and slop chests.
    (11) Load line regulations (see Sec. 4.65a).
    (12) Carriage of United States securities, etc. (46 U.S.C. App. 98).
    (13) Carriage of mail.
    (14) Public Health regulations (see Sec. 4.70).
    (15) Inspection of vessels carrying livestock (see Sec. 4.71).
    (16) Inspection of meat, meat-food products, and inedible fats (see 
Sec. 4.72).
    (17) Neutrality exportation of arms and munitions (see Sec. 4.73).
    (18) Payment of State and Federal fees and fees due the Government 
of the Virgin Islands of the United States (46 U.S.C. App. 100).
    (19) Orders restricting shipping (see Sec. 4.74).
    (20) Estimated duties deposited or a bond given to cover duties on 
foreign repairs and equipment for vessels of the United States (see 
Sec. 4.14).
    (21) Illegal discharge of oil (see Sec. 4.66a).
    (22) Attached or arrested vessel.
    (23) Immigration laws.
    (24) Electronic receipt of required vessel cargo information (see 
Sec. 192.14(c) of this chapter).
    (d) Vessel built for foreign account. A new vessel built in the 
United States for foreign account will be cleared under a certificate of 
record, Coast Guard Form 1316, in lieu of a marine document.
    (e) Clearance not granted. Clearance will not be granted to any 
foreign vessel using the flag of the United States or any distinctive 
signs or markings indicating that the vessel is an American vessel (22 
U.S.C. 454a).
    (f) Clearance in order of itinerary. Unless otherwise provided in 
this section, every vessel bound for a foreign port or ports will be 
cleared for a definite port or ports in the order of its itinerary, but 
an application to clear for a port or place for orders, that is, for 
instructions to masters as to destination of the vessel, may be accepted 
if the vessel is in ballast or if any cargo on board is to be discharged 
in a port of

[[Page 47]]

the same country as the port for which clearance is sought.

[T.D. 00-4, 65 FR 2874, Jan. 19, 2000; T.D. 00-22, 65 FR 16515, Mar. 29, 
2000; CBP Dec. 03-32, 68 FR 68169, Dec. 5, 2003]



Sec. 4.62  Accounting for inward cargo.

    Inward cargo discrepancies shall be accounted for and adjusted by 
correction of the Cargo Declaration Outward With Commercial Forms, 
Customs Form 1302-A, but the vessel may be cleared and the adjustment 
deferred if the discharging officer's report has not been received. (See 
Sec. 4.12.)

[T.D. 77-255, 42 FR 56322, Oct. 25, 1977, as amended by T.D. 84-193, 49 
FR 35485, Sept. 10, 1984]



Sec. 4.63  Outward cargo declaration; shippers' export declarations.

    (a) No vessel shall be cleared directly for a foreign port, or for a 
foreign port by way of another domestic port or other domestic ports 
(see Sec. 4.87(b)), unless there has been filed with the appropriate 
Customs officer at the port from which clearance is being sought:
    (1) A Cargo Declaration Outward With Commercial Forms, Customs Form 
1302-A. Copies of bills of lading or equivalent commercial documents 
relating to all cargo encompassed by the manifest must be attached in 
such manner as to constitute one document, together with a Vessel 
Entrance or Clearance Statement, Customs Form 1300, and export 
declarations as are required by pertinent regulations of the Bureau of 
the Census, Department of Commerce; or
    (2) An incomplete Cargo Declaration as provided for in Sec. 4.75.
    (b) Except as hereafter stated, the number of the export declaration 
covering each shipment for which an authenticated export declaration is 
required shall be shown on the Cargo Declaration Outward With Commercial 
Forms, Customs Form 1302-A, in the marginal column headed ``B/L No.'' If 
an export declaration is not required for a shipment, a notation shall 
be made on the Cargo Declaration Outward With Commercial Forms (Customs 
Form 1302-A) describing the basis for the exemption with a reference to 
the number of the section in the Census Regulations (see 15 CFR 30.39, 
30.50 through 30.57) where the particular exemption is provided. If 
shipments are exempt on the basis of value and destination, the 
appearance of the value and destination on a bill of lading or other 
commercial documents is acceptable as evidence of the exemption and 
reference to the applicable section in the Census Regulations is not 
required.
    (c) The following minimal information shall be included on the Cargo 
Declaration Outward With Commercial Forms, Customs Form 1302-A (other 
information required to be on a Customs Form 1302-A as shown on the form 
itself must also be included thereon) or on attached copies of bills of 
lading or equivalent commercial documents:
    (1) Name and address of shipper;
    (2) Description of the cargo (see paragraph (d) of this section);
    (3) Number of packages and gross weight (see paragraph (d) of this 
section);
    (4) Name of vessel or carrier;
    (5) Port of exit (this shall be the port where the merchandise is 
loaded on the vessel); and
    (6) Port of destination (this shall be the foreign port of discharge 
of the merchandise).
    (d) If the bills of lading or equivalent commercial documents 
attached to the Customs Form 1302-A show on their face the cargo 
information required by columns 6, 7, and either column 8 or 9, of the 
Customs Form 1302-A, that information need not be shown again on the 
Customs Form 1302-A. However, in that case, the cargo information must 
be incorporated by a suitable reference on the face of the Customs Form 
1302-A such as ``Cargo as per attached commercial documents.''
    (e) For each shipment to be exported under an entry or withdrawal 
for exportation or for transportation and exportation, the Cargo 
Declaration Outward With Commercial Forms, Customs Form 1302-A, or 
commercial document attached to the Cargo Declaration and made a part 
thereof in accordance with paragraph (a)(1) of this section, shall 
clearly show for such shipment the number, date, and class of such 
Customs entry or withdrawal (i.e., T. & E., Wd. T. & E., I. E., Wd. Ex., 
or Wd. T., as applicable) and the name of

[[Page 48]]

the port where the merchandise is laden for exportation.
    (f) Customs officers shall accept a Cargo Declaration Outward With 
Commercial Forms, Customs Form 1302-A, covering containerized or 
palletized cargo which indicates by the use of appropriate words of 
qualification (see Sec. 4.7a(c)(3)) that the declaration has been 
prepared on the basis of information furnished by the shipper.

[T.D. 84-193, 49 FR 35484, Sept. 10, 1984; T.D. 00-22, 65 FR 16515, Mar. 
29, 2000]



Sec. 4.64  [Reserved]



Sec. 4.65  Verification of nationality and tonnage.

    The nationality and tonnage of a vessel shall be verified by 
examination of its marine document. If such examination discloses that 
insufficient tonnage tax was collected on entry of the vessel, no 
clearance shall be granted until the deficiency is paid.



Sec. 4.65a  Load lines.

    (a) If a port director is notified by an officer of the United 
States Coast Guard that a detention order has been issued against a 
vessel engaged in the foreign trade under the International Voyage Load 
Line Act of 1973, clearance shall not be granted until the order is 
withdrawn.
    (b) If a port director issues a detention order under the Coastwise 
Load Line Act, 1935, as amended, or is notified by an officer of the 
United States Coast Guard that a detention order has been issued against 
a vessel under the aforesaid Act, clearance shall not be granted until 
the order is withdrawn.

[T.D. 75-133, 40 FR 24518, June 9, 1975]



Sec. 4.66  Verification of inspection.

    (a) No clearance shall be granted unless the port director is 
satisfied that a proper certificate of inspection is in force and the 
vessel is in compliance with such certificate, if the vessel is:
    (1) A vessel of the United States required to be inspected as 
specified in Title 46, Code of Federal Regulations.
    (2) A foreign vessel carrying passengers from the United States.
    (b) In the case of vessels of foreign nations which are signatories 
of the International Convention for the Safety of Life at Sea, 1948, 
carrying passengers from the United States, an unexpired Certificate of 
Examination for Foreign Passenger Vessel, Form CG-989, or an unexpired 
Certificate for Foreign Vessel to Carry Persons in Addition to Crew, 
Form CG-3463, issued by the United States Coast Guard, may be accepted 
as evidence that a proper certificate of inspection is in force and the 
vessel is in compliance with such certificate.
    (c) In the case of vessels of the United States subject to 
inspection proceeding to another port for repairs, a valid Permit to 
Proceed to Another Port for Repairs, Form CG-948, issued by the United 
States Coast Guard, shall be accepted in lieu of the certificate of 
inspection required by this section.

[T.D. 56173, 29 FR 6681, May 22, 1964, as amended by T.D. 69-266, 34 FR 
20422, Dec. 31, 1969]



Sec. 4.66a  Illegal discharge of oil and hazardous substances.

    If a port director receives a request from an officer of the U.S. 
Coast Guard to withhold clearance of a vessel whose owner or operator is 
subject to a civil penalty for discharging oil or a hazardous substance 
into or upon the navigable waters of the United States, adjoining 
shorelines, or into or upon the waters of the contiguous zone in 
quantities determined to be harmful by appropriate authorities, such 
clearance shall not be granted until the port director is informed that 
a bond or other surety satisfactory to the Coast Guard has been filed.

[T.D. 82-28, 47 FR 5226, Feb. 4, 1982]



Sec. 4.66b  Pollution of coastal and navigable waters.

    (a) If any Customs officer has reason to believe that any refuse 
matter is being or has been deposited in navigable waters or any 
tributary of any navigable waters in violation of section 13 of the Act 
of March 3, 1899 (30 Stat. 1152; 33 U.S.C. 407), or oil or a hazardous 
substance is being or has been discharged into or upon the navigable 
waters of the United States, adjoining shorelines, or into or upon the 
waters of the contiguous zone in violation of

[[Page 49]]

the Federal Water Pollution Control Act, as amended (33 U.S.C. 1251, 
1321), he shall promptly furnish to the port director a full report of 
the incident, together with the names of witnesses and, when 
practicable, a sample of the material discharged from the vessel in 
question.
    (b) The port director shall forward this report immediately, without 
recommendation, to the district commander of the Coast Guard district 
concerned and a copy of such report shall be furnished to Headquarters, 
U.S. Customs Service.

[T.D. 73-18, 38 FR 1587, Jan. 16, 1973, as amended by T.D. 82-28, 47 FR 
5226, Feb. 4, 1982]



Sec. 4.66c  Oil pollution by oceangoing vessels.

    (a) If a port director receives a request from a Coast Guard officer 
to refuse or revoke the clearance or permit to proceed of a vessel 
because the vessel, its owner, operator, or person in charge, is liable 
for a fine or civil penalty, or reasonable cause exists to believe that 
they may be subject to a fine or civil penalty under the provisions of 
33 U.S.C. 1908 for violating the Protocol of 1978 Relating to the 
International Convention for the Prevention of Pollution from Ships, 
1973 (MARPOL Protocol), the Act to Prevent Pollution from Ships, 1980 
(33 U.S.C. 1901-1911), or regulations issued thereunder, such clearance 
or a permit to proceed shall be refused or revoked. Clearance or a 
permit to proceed may be granted when the port director is informed that 
a bond or other security satisfactory to the Coast Guard has been filed.
    (b) If a port director receives a notification from a Coast Guard 
officer that an order has been issued to detain a vessel required to 
have an International Oil Pollution Prevention (IOPP) Certificate which 
does not have a valid certificate on board, or whose condition or whose 
equipment's condition does not substantially agree with the particulars 
of the certificate on board, or which presents an unreasonable threat of 
harm to the marine environment, the port director shall refuse or revoke 
the clearance or permit to proceed of the vessel if requested to do so 
by a Coast Guard officer. The port director shall not grant clearance or 
issue a permit to proceed to the vessel until notified by a Coast Guard 
officer that detention of the vessel is no longer required.
    (c) If a port director receives a notification from a Coast Guard 
officer to detain a vessel operated under the authority of a country not 
a party to the MARPOL Protocol which does not have a valid certificate 
on board showing that the vessel has been surveyed in accordance with 
and complies with the requirements of the MARPOL Protocol, or whose 
condition or whose equipment's condition does not substantially agree 
with the particulars of the certificate on board, or which presents an 
unreasonable threat of harm to the marine environment, the port director 
shall refuse or revoke the clearance or permit to proceed of the vessel 
if requested to do so by a Coast Guard officer. The port director shall 
not grant clearance or issue a permit to proceed to the vessel until 
notified by a Coast Guard officer that detention of the vessel is no 
longer required.

[T.D. 81-148, 49 FR 28695, July 16, 1984]



Sec. 4.67  Closed ports or places.

    No foreign vessel shall be granted a clearance or permit to proceed 
to any port or place from which such vessels are excluded by orders or 
regulations of the United States Navy Department except with the prior 
approval of that Department.



Sec. 4.68  Federal Maritime Commission certificates for certain passenger 
vessels.

    No vessel having berth or stateroom accommodations for 50 or more 
passengers and embarking passengers at U.S. ports will be granted a 
clearance at the port or place of departure from the United States 
unless it is established that the vessel has valid certificates issued 
by the Federal Maritime Commission.

[T.D. 00-4, 65 FR 2874, Jan. 19, 2000]



Sec. 4.69  Shipping articles.

    No vessel of the U.S. on a voyage between a U.S. port and a foreign 
port (except a port in Canada, Mexico, or the West Indies), or if of at 
least 75

[[Page 50]]

gross tons, on a voyage between a U.S. port on the Atlantic Ocean and a 
U.S. port on the Pacific Ocean, shall be granted clearance before 
presentation, to the appropriate Customs officer, of the shipping 
articles agreements, including any seaman's allotment agreement, 
required by 46 U.S.C. chapter 103, in the form provided for in 46 CFR 
14.05-1.

[T.D. 92-52, 57 FR 23945, June 5, 1992]



Sec. 4.70  Public Health Service requirements.

    No clearance will be granted to a vessel subject to the foreign 
quarantine regulations of the Public Health Service.

[T.D. 00-4, 65 FR 2874, Jan. 19, 2000]



Sec. 4.71  Inspection of livestock.

    A proper export inspection certificate issued by the Veterinary 
Services, Animal and Plant Health Inspection Service, Department of 
Agriculture, shall be filed before the clearance of a vessel carrying 
horses, mules, asses, cattle, sheep, swine, or goats (9 CFR part 91)

[T.D. 79-32, 44 FR 5650, Jan. 29, 1979]



Sec. 4.72  Inspection of meat, meat-food products, and inedible fats.

    (a) No clearance shall be granted to any vessel carrying meat or 
meat-food products, as defined and classified by the U.S. Department of 
Agriculture, Food Safety and Inspection Service, Meat and Poultry 
Inspection until there have been filed with the port director such 
copies of export certificates concerning such meat or meat-food products 
as are required by the pertinent regulations of the U.S. Department of 
Agriculture, Food Safety and Inspection Service, Meat and Poultry 
Inspection (9 CFR part 322). If such certificate has been obtained but 
is unavailable at the scheduled time of a vessel's departure, the vessel 
may be cleared on the basis of the receipt of a statement, under the 
shipper's or shipper's agent's letterhead, certifying the number of 
boxes, the number of pounds, the product name and the U.S. Department of 
Agriculture export certificate number that covers the shipment of the 
product. If such statement has been used as the basis for obtaining 
vessel clearance, the duplicate of the certificate must be filed with 
Customs within the time period prescribed by Sec. 4.75.
    (b) No clearance shall be granted to any vessel carrying tallow, 
stearin, oleo oil, or other rendered fat derived from cattle, sheep, 
swine, or goats for export from the United States, which has not been 
inspected, passed, and marked by the United States Department of 
Agriculture, unless the port director is furnished with a certificate by 
the exporter that the article is inedible.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 78-99, 43 FR 13059, Mar. 
29, 1978; T.D. 91-77, 56 FR 46114, Sept. 10, 1991;T.D. 95-54, 60 FR 
35838, July 12, 1995]



Sec. 4.73  Neutrality; exportation of arms and munitions.

    (a) Clearance shall not be granted to any vessel if the port 
director has reason to believe that her departure or intended voyage 
would be in violation of any provision of the Neutrality Act of 1939 or 
other neutrality law of the United States, \104\ or of any regulation or 
instruction issued pursuant to any such law.
---------------------------------------------------------------------------

    \104\ See 18 U.S.C. 961 through 967 and 22 U.S.C. 441 through 457.
---------------------------------------------------------------------------

    (b) The port director shall refuse clearance for and detain any 
vessel manifestly built for warlike purposes and about to depart from 
the United States with a cargo consisting principally of arms and 
munitions of war \105\ when the number of men intending to sail or other 
circumstances render it probable that the vessel is intended to commit 
hostilities against the subjects, citizens, or property or any foreign 
country, with which the United States is at peace, until the decision of 
the President thereon is received, or until the owners shall have given 
bond or security in double the value of the vessel and its cargo that 
she will not be so employed.
---------------------------------------------------------------------------

    \105\ Clearance for vessel shall not be denied for the sole reason 
that her cargo contains contraband of war.
    106-110 [Reserved]
---------------------------------------------------------------------------

    (c) A port director shall promptly communicate all the facts to 
Headquarters, U.S. Customs Service, if he

[[Page 51]]

learns while the United States is at peace that any vessel of a 
belligerent power which has arrived as a merchant vessel is altering, or 
will attempt to alter, her status as a merchant vessel so as to become 
an armed vessel or an auxiliary to armed vessels of a foreign power.
    (d) If a port director has reason to believe during the existence of 
a war to which the United States is not a party that any vessel at his 
port is about to carry arms, munitions, supplies, dispatches, 
information, or men to any warship or tender or supply ship of a 
belligerent nation, he shall withhold the clearance of such vessel and 
report the facts promptly to Headquarters, U.S. Customs Service.



Sec. 4.74  Transportation orders.

    Clearance shall not be granted to any vessel if the port director 
has reason to believe that her departure or intended voyage would be in 
violation of any provision of any transportation order, regulation, or 
restriction issued under authority of the Defense Production Act of 1950 
(50 U.S.C. App. 2061-2066).



Sec. 4.75  Incomplete manifest; incomplete export declarations; bond.

    (a) Pro forma manifest. Except as provided for in Sec. 4.75(c), if 
a master desiring to clear his vessel for a foreign port does not have 
available for filing with the port director a complete Cargo Declaration 
Outward with Commercial Forms, Customs Form 1302-A (see Sec. 4.63) in 
accordance with 46 U.S.C. 91, or all required shipper's export 
declarations (see 15 CFR 30.24), the port director may accept in lieu 
thereof an incomplete manifest (referred to as a pro forma manifest) on 
the Vessel Entrance or Clearance Statement, Customs Form 1300, if there 
is on file in his office a bond on Customs Form 301, containing the bond 
conditions set forth in Sec. 113.64 of this chapter relating to 
international carriers, executed by the vessel owner or other person as 
attorney in fact of the vessel owner. The ``Incomplete Manifest for 
Export'' box in item 17 of the Vessel Entrance or Clearance Statement 
form must be checked.
    (b) Time in which to file complete manifest and export declarations. 
Not later than the fourth business day after clearance from each port in 
the vessel's itinerary, the master, or the vessel's agent on behalf of 
the master, shall deliver to the director of each port a complete Cargo 
Declaration Outward with Commercial Forms, Customs Form 1302-A, in 
accordance with Sec. 4.63, of the cargo laden at such port together 
with duplicate copies of all required shipper's export declarations for 
such cargo and a Vessel Entrance or Clearance Statement, Customs Form 
1300. The statutory grace period of 4 days for filing the complete 
manifest and missing export declarations begins to run on the first day 
(exclusive of any day on which the customhouse is not open for marine 
business) following the date on which clearance is granted.
    (c) Countries for which vessels may not be cleared until complete 
manifests and shipper's export declarations are filed. To aid the 
Customs Service in the enforcement of export laws and regulations, no 
vessel shall be cleared for any port in the following countries until a 
complete outward foreign manifest and all required shipper's export 
declarations have been filed with the port director:

Albania
Bulgaria
Cambodia
China, People's Republic of
Cuba
Czechoslovakia
Estonia
German Democratic Republic (Soviet Zone of Germany and Soviet Zone 
sector of Berlin)
Hungary
Iran
Iraq
Laos
Latvia
Libya
Lithuania
Mongolian People's Republic
North Korea
Polish People's Republic (Including Danzig)
Rumania
South Yemen
Union of Soviet Socialist Republics
Viet Nam

[T.D. 87-1, 52 FR 255, Jan. 5, 1987, as amended by T.D. 91-60, 56 FR 
32085, July 15, 1991; T.D. 00-22, 65 FR 16515, Mar. 29, 2000]



Sec. 4.76  Procedures and responsibilities of carriers filing outbound 
vessel manifest information via the AES.

    (a) The sea carrier's module. The Sea Carrier's Module is a 
component of the Automated Export System (AES) (see, part 192, subpart 
B, of this chapter) that allows for the filing of outbound

[[Page 52]]

vessel manifest information electronically (see, 15 CFR part 30). All 
sea carriers are eligible to apply for participation in the Sea 
Carrier's Module. Application and certification procedures for AES are 
found at 15 CFR 30.60. A sea carrier certified to use the module that 
adheres to the procedures set forth in this section and the Census 
Regulations (15 CFR part 30) concerning the electronic submission of an 
outbound vessel manifest information meets the outward cargo declaration 
filing requirements (CF 1302-A) of Sec. Sec. 4.63 and 4.75, except as 
otherwise provided in Sec. Sec. 4.75 and 4.84.
    (b) Responsibilities. The performance requirements and operational 
standards and procedures for electronic submission of outbound vessel 
manifest information are detailed in the AES Trade Interface 
Requirements handbook (available on the Customs internet web site 
(www.customs.gov)). Carriers and their agents are responsible for 
reporting accurate and timely information and for responding to all 
notifications concerning the status of their transmissions and the 
detention and release of freight in accordance with the procedures set 
forth in the AES Trade Interface Requirements handbook. Customs will 
send messages to participant carriers regarding the accuracy of their 
transmissions. AES participants are required to comply with the 
recordkeeping requirements contained at Sec. 30.66 of the Census 
Regulations (15 CFR 30.66) and any other applicable recordkeeping 
requirements. Where paper SEDs have been submitted by exporters prior to 
departure, participant carriers will be responsible for submitting those 
SEDs to Customs within four (4) business days after the departure of the 
vessel from each port, unless a different time requirement is specified 
by Sec. Sec. 4.75 or 4.84. Upon written agreement with participant sea 
carriers, Customs and Census can provide for an alternative to the 
location filing requirement for paper SEDs set forth in Sec. 4.75(b) by 
which the participant carriers are otherwise bound.
    (c) Messages required to be filed within the sea carrier's module. 
Participant carriers will be responsible for transmitting and responding 
to the following messages:
    (1) Booking. Booking information identifies all the freight that is 
scheduled for export. Booking information will be transmitted to Customs 
via AES for each shipment as far in advance of departure as practical, 
but no later than seventy-two hours prior to departure for all 
information available at that time. Bookings received within seventy-two 
hours of departure will be transmitted to Customs via AES as received;
    (2) Receipt of booking. When the carrier receives the cargo or 
portion of the cargo that was booked, the carrier will inform Customs so 
that Customs can determine if an examination of the cargo is necessary. 
Customs will notify the carrier of shipments designated for examination. 
Customs will also notify the carrier when the shipment designated for 
inspection is released and may be loaded on the vessel;
    (3) Departure. No later than the first calendar day following the 
actual departure of the vessel, the carrier will notify Customs of the 
date and time of departure; and
    (4) Manifest. Within ten (10) calendar days after the departure of 
the vessel from each port, the carrier will submit the manifest 
information to Customs via AES for each booking loaded on the departed 
vessel. However, if the destination of the vessel is a foreign port 
listed in Sec. 4.75(c), the carrier must transmit complete manifest 
information before vessel departure. Time requirements for transmission 
of complete manifest information for carriers destined to Puerto Rico 
and U.S. possessions are the same as the requirement for the submission 
of the complete manifest as found in Sec. 4.84.
    (d) All penalties and liquidated damages that apply to the 
submission of paper manifests (see, applicable provisions in this part) 
apply to the electronic submission of outbound vessel manifest 
information through the Sea Carrier's Module.

[T.D. 99-57, 64 FR 40986, July 28, 1999]

                           Coastwise Procedure



Sec. 4.80  Vessels entitled to engage in coastwise trade.

    (a) No vessel shall transport, either directly or by way of a 
foreign port,

[[Page 53]]

any passenger or merchandise between points in the United States 
embraced within the coastwise laws, including points within a harbor, or 
merchandise for any part of the transportation between such points, 
unless it is:
    (1) Owned by a citizen and is so documented under the laws of the 
United States as to permit it to engage in the coastwise trade;
    (2) Owned by a citizen, is exempt from documentation, and is 
entitled to or, except for its tonnage, would be entitled to be 
documented with a coastwise license or, where appropriate, a Great Lakes 
license endorsement.
    (3) Owned by a partnership or association in which at least a 75 
percent interest is owned by such a citizen, is exempt from 
documentation and is entitled to or, except for its tonnage, or 
citizenship of its owner, or both, would be entitled to be documented 
for the coastwise trade. The term ``citizen'' for vessel documentation 
purposes, whether for an individual, partnership, or corporation owner, 
is defined in 46 CFR 67.3.
    (b) Penalties for violating coastwise laws. (1) The penalty imposed 
for the illegal transportation of merchandise between coastwise points 
is forfeiture of the merchandise or, in the discretion of the port 
director, forfeiture of a monetary amount up to the value of the 
merchandise to be recovered from the consignor, seller, owner, importer, 
consignee, agent, or other person or persons so transporting or causing 
the merchandise to be transported (46 U.S.C. 883).
    (2) The penalty imposed for the unlawful transportation of 
passengers between coastwise points is $300 for each passenger so 
transported and landed (46 U.S.C. App. 289, as adjusted by the Federal 
Civil Penalties Inflation Adjustment Act of 1990).
    (c) Any vessel of the United States, whether or not entitled under 
paragraph (a) of this section to engage in the coastwise trade, and any 
foreign vessel may proceed between points in the United States embraced 
within the coastwise laws to discharge cargo or passengers laden at a 
foreign port, to lade cargo or passengers for a foreign port, in 
ballast, or to transport certain articles in accordance with Sec. 4.93. 
Cargo laden at a foreign port may be retained onboard during such 
movements. Furthermore, certain barges of United States or foreign flag 
may transport transferred merchandise between points in the United 
States embraced within the coastwise laws, excluding transportation 
between the continental United States and a noncontiguous point in the 
United States embraced within the coastwise laws, in accordance with 
Sec. 4.81a.
    (d) No vessel owned by a corporation which is a citizen of the 
United States under the Act of September 2, 1958 (46 U.S.C. 883-1) shall 
be used in any trade other than the coastwise trade and shall not be 
used in that trade unless it is properly documented for such use or is 
exempt from documentation and is entitled to or, except for its tonnage, 
would be entitled to a coastwise license, or where appropriate, a Great 
Lakes license endorsement. Such a vessel shall not be documented for nor 
engage in the foreign trade or the fisheries and shall not transport 
merchandise or passengers coastwise for hire except as a service for a 
parent or a subsidiary corporation as defined in the aforesaid Act or 
while under demise or bareboat charter at prevailing rates for use 
otherwise than in trade with noncontiguous territory of the United 
States to a common or contract carrier subject to Part III of the 
Interstate Commerce Act, as amended (49 U.S.C. 901 through 923), which 
otherwise qualifies as a citizen of the United States under section 2 of 
the Shipping Act, 1916, as amended (46 U.S.C. 802), and which is not 
connected, directly or indirectly, by way of ownership or control with 
such owning corporation.
    (e) No vessel which has acquired the lawful right to engage in the 
coastwise trade, by virtue of having been built in or documented under 
the laws of the United States, shall have the right to engage in such 
trade if it thereafter has been sold or transferred foreign in whole or 
in part or placed under foreign registry, or, if of more than 500 gross 
tons, has been rebuilt unless the entire rebuilding, including the 
construction of any major components of the hull or superstructure of 
the vessel, was effected within the United States,

[[Page 54]]

its Territories (not including trust territories), or its possessions. 
However, no rebuilt vessel shall be deemed to have lost its coastwise 
privileges within the meaning of the above if rebuilt within the United 
States, its Territories (not including trust territories), or its 
possessions under a contract executed before July 5, 1960, if the work 
of rebuilding commenced not later than 24 months after such date.
    (f) No foreign-built vessel owned and documented as a vessel of the 
United States prior to February 1, 1920, by a citizen nor one owned by 
the United States on June 5, 1920, and sold to and owned by a citizen, 
shall engage in the American fisheries, but it is otherwise unlimited as 
to trade so long as it continues in such ownership (section 22, Merchant 
Marine Act, of June 5, 1920; 46 U.S.C. 13). No foreign-built vessel 
which is owned by a citizen, but which was not so owned and documented 
on February 1, 1920, or which was not owned by the United States on June 
5, 1920, shall engage in the coastwise trade or the American fisheries. 
No foreign-built vessel which has been sold, leased, or chartered by the 
Secretary of Commerce to any citizen, shall engage in the American 
fisheries, but it is otherwise unlimited as to trade so long as it 
continues in such ownership, lease, or charter (section 9 of the Act of 
Sept. 7, 1916, as amended, 46 U.S.C. 808). A vessel engaged in taking 
out fishing parties for hire, unless it intends to proceed to a foreign 
port, is considered to be engaged in the coastwise trade and not the 
fisheries.
    (g) Certain vessels not documented under the laws of the United 
States which are acquired by or made avail able to the Secretary of 
Commerce may be documented under section 3 of the Act of August 9, 1954 
(50 U.S.C. 198). Such vessels shall not engage in the coastwise trade 
unless in possession of a valid unexpired permit to engage in that trade 
issued by the Secretary of Commerce under authority of section 3(c) of 
the said Act.
    (h) A vessel which is at least 50 percent owned by a citizen as 
defined in 46 CFR subpart 68.05, and which, except for citizenship 
requirements, is otherwise entitled to be documented with a coastwise 
endorsement, may be documented with a limited coastwise endorsement, 
provided the vessel is owned by a not-for-profit oil spill response 
cooperative or by one or more members of such a cooperative who dedicate 
the vessel to the use of the cooperative (46 U.S.C. 12106(d)). 
Notwithstanding 46 U.S.C. App. 883, a vessel may be documented with such 
a limited endorsement even if formerly owned by a not-for-profit oil 
spill response cooperative or by one or more members thereof, as long as 
the citizenship criteria of 46 CFR subpart 68.05 are met. A vessel so 
documented may operate on the navigable waters of the United States or 
in the Exclusive Economic Zone only for the purpose of training for oil 
spill cleanup operations; deploying equipment, supplies and personnel 
for cleanup operations; and recovering and/or transporting oil 
discharged in a spill. Such vessel may also engage in any other 
employment for which a registry, fishery, or Great Lakes endorsement is 
not required, and may qualify to operate for other purposes by meeting 
the applicable requirements of 46 CFR part 67.
    (i) Any vessel, entitled to be documented and not so documented, 
employed in a trade for which a Certificate of Documentation is issued 
under the vessel documentation laws (see Sec. 4.0(c)), other than a 
trade covered by a registry, is liable to a civil penalty of $500 for 
each port at which it arrives without the proper Certificate of 
Documentation. If such a vessel has on board any foreign merchandise 
(sea stores excepted), or any domestic taxable alcoholic beverages, on 
which the duty and taxes have not been paid or secured to be paid, the 
vessel and its cargo are subject to seizure and forfeiture.

[T.D. 69-266, 34 FR 20422, Dec. 31, 1969, as amended by T.D. 79-160, 44 
FR 31956, June 4, 1979; T.D. 83-214, 48 FR 46512, Oct. 13, 1983; T.D. 
93-78, 58 FR 50257, Sept. 27, 1993; T.D. 97-82, 62 FR 51769, Oct. 3, 
1997; T.D. 03-11, 68 FR 13820, Mar. 21, 2003]



Sec. 4.80a  Coastwise transportation of passengers.

    (a) For the purposes of this section, the following terms will have 
the meaning set forth below:

[[Page 55]]

    (1) Coastwise port means a port in the U.S., its territories, or 
possessions embraced within the coastwise laws.
    (2) Nearby foreign port means any foreign port in North America, 
Central America, the Bermuda Islands, or the West Indies (including the 
Bahama Islands, but not including the Leeward Islands of the Netherlands 
Antilles, i.e., Aruba, Bonaire, and Curacao). A port in the U.S. Virgin 
Islands shall be treated as a nearby foreign port.
    (3) Distant foreign port means any foreign port that is not a nearby 
port.
    (4) Embark means a passenger boarding a vessel for the duration of a 
specific voyage and disembark means a passenger leaving a vessel at the 
conclusion of a specific voyage. The terms embark and disembark are not 
applicable to a passenger going ashore temporarily at a coastwise port 
who reboards the vessel and departs with it on sailing from the port.
    (5) Passenger has the meaning defined in Sec. 4.50(b).
    (b) The applicability of the coastwise law (46 U.S.C. 289) to a 
vessel not qualified to engage in the coastwise trade (i.e., either a 
foreign-flag vessel or a U.S.-flag vessel that is foreign-built or at 
one time has been under foreign-flag) which embarks a passenger at a 
coastwise port is as follows:
    (1) If the passenger is on a voyage solely to one or more coastwise 
ports and the passenger disembarks or goes ashore temporarily at a 
coastwise port, there is a violation of the coastwise law.
    (2) If the passenger is on a voyage to one or more coastwise ports 
and a nearby foreign port or ports (but at no other foreign port) and 
the passenger disembarks at a coastwise port other than the port of 
embarkation, there is a violation of the coastwise law.
    (3) If the passenger is on a voyage to one or more coastwise ports 
and a distant foreign port or ports (whether or not the voyage includes 
a nearby foreign port or ports) and the passenger disembarks at a 
coastwise port, there is no violation of the coastwise law provided the 
passenger has proceeded with the vessel to a distant foreign port.
    (c) An exception to the prohibition in this section is the 
transportation of passengers between ports in Puerto Rico and other 
ports in the U.S. on passenger vessels not qualified to engage in the 
coastwise trade. Such transportation is permitted until there is a 
finding under 46 U.S.C. 289c that a qualified U.S.-flag passenger vessel 
is available for such service.
    (d) The owner or charterer of a foreign vessel or any other 
interested person may request from Headquarters, U.S. Customs Service, 
Attention: Entry Procedures and Carriers Branch, an advisory ruling as 
to whether a contemplated voyage would be considered to be coastwise 
transportation in violation of 46 U.S.C. 289. Such a request shall be 
filed in accordance with the provisions of part 177, Customs Regulations 
(19 CFR part 177).

[T.D. 85-109, 50 FR 26984, July 1, 1985, as amended by T.D. 85-109, 50 
FR 37519, Sept. 16, 1985; T.D. 99-27, 64 FR 13675, Mar. 22, 1999]



Sec. 4.80b  Coastwise transportation of merchandise.

    (a) Effect of manufacturing or processing at intermediate port or 
place. A coastwise transportation of merchandise takes place, within the 
meaning of the coastwise laws, when merchandise laden at a point 
embraced within the coastwise laws (``coastwise point'') is unladen at 
another coastwise point, regardless of the origin or ultimate 
destination of the merchandise. However, merchandise is not transported 
coastwise if at an intermediate port or place other than a coastwise 
point (that is at a foreign port or place, or at a port or place in a 
territory or possession of the United States not subject to the 
coastwise laws), it is manufactured or processed into a new and 
different product, and the new and different product thereafter is 
transported to a coastwise point.
    (b) Request for ruling. Interested parties may request an advisory 
ruling from Headquarters, United States Customs Service, Attention: 
Entry Procedures and Carriers Branch, as to whether a specific action 
taken or to be taken with respect to merchandise at the intermediate 
port or place will

[[Page 56]]

result in its becoming a new and different product for purposes of this 
section. The request shall be filed in accordance with the provisions of 
part 177 of this chapter.

[T.D. 79-193, 44 FR 42178, July 19, 1979, as amended by T.D. 91-77, 56 
FR 46114, Sept. 10, 1991; 56 FR 47268, Sept. 18, 1991; T.D. 99-27, 64 FR 
13675, Mar. 22, 1999]



Sec. 4.81  Reports of arrivals and departures in coastwise trade.

    (a) No vessel which is documented with a coastwise license or 
registry endorsement or is owned by a citizen and exempt from 
documentation, and which is in ballast or laden only with domestic 
products or passengers being carried only between points in the United 
States shall be required to report arrival or to enter when coming into 
one port of the United States from any other such port, except as 
provided for in sections 4.83 and 4.84, nor to obtain a clearance, 
permit to proceed, or permission to depart when going from one port in 
the United States to any other such port except when transporting 
merchandise to a port in noncontinguous territory. \111\
---------------------------------------------------------------------------

    \111\ See Sec. 4.84.
    112-114 [Reserved]
---------------------------------------------------------------------------

    (b) When the facts are as above stated except that the vessel is 
carrying bonded merchandise, the master shall report its arrival as 
provided for in Sec. 4.2.
    (c) [Reserved]
    (d) The traveling Crew's Effects Declaration, Customs Form 1304, or 
Customs and Immigration Form I-418 with attached Customs Form 5129, 
referred to in Sec. 4.85 (b), (c), and (e) shall be deposited with the 
port director upon arrival at each port in the United States and finally 
surrendered to the appropriate Customs officer or director of the port 
where the vessel first departs directly for a foreign port.
    (e) Before any foreign vessel departs in ballast, or solely with 
articles to be transported in accordance with Sec. 4.93, from any port 
in the United States for any other such port, the master must apply to 
the port director for a permit to proceed by filing a Vessel Entrance or 
Clearance Statement, Customs Form 1300, in duplicate. If a vessel is 
proceeding in ballast and therefore the Cargo Declaration (Customs Form 
1302) is omitted, the words ``No merchandise on board'' shall be 
inserted in item 16 of the Vessel Entrance or Clearance Statement. 
However, articles to be transported in accordance with Sec. 4.93 must 
be manifested on the Cargo Declaration, as required by Sec. 4.93(c). 
Three copies of the Cargo Declaration must be filed with the port 
director. When the port director grants the permit by making an 
appropriate endorsement on the Vessel Entrance or Clearance Statement 
(see Sec. 4.85(b)), the duplicate copy, together with two copies of the 
Cargo Declaration covering articles to be transported in accordance with 
Sec. 4.93, must be returned to the master. The traveling Crew's Effects 
Declaration, Customs Form 1304, and all unused crewmembers' declarations 
on Customs Form 5129 will be placed in a sealed envelope addressed to 
the appropriate Customs officer at the next intended domestic port and 
returned to the master for delivery. The master must execute a receipt 
for all unused crewmembers' declarations which are returned to him. 
Immediately upon arrival at the next United States port the master must 
report his arrival to the port director. He must make entry within 48 
hours by filing with the port director the permit to proceed on the 
Vessel Entrance or Clearance Statement received at the previous port, a 
newly executed Vessel Entrance or Clearance Statement, a Crew's Effects 
Declaration of all unentered articles acquired abroad by crewmembers 
which are still on board, a Ship's Stores Declaration, Customs Form 
1303, in duplicate of the stores remaining on board, both copies of the 
Cargo Declaration covering articles transported in accordance with Sec. 
4.93, and the document of the vessel. The traveling Crew's Effects 
Declaration and all unused crewmembers' declarations on Customs Form 
5129 returned at the prior port to the master must be delivered by him 
to the appropriate Customs officer.
    (f) The master, licensed deck officer, or purser who enters or 
clears a vessel, or who obtains permission for a vessel to depart, when 
required under the provisions of this section or of Sec. Sec. 4.82, 
4.84,

[[Page 57]]

4.85, 4.87, 4.89, or 4.91 of the regulations of this part, may appear in 
person at the customhouse for that purpose, or any required oaths, 
related documents, and other papers properly executed by the master or 
other proper officer may be delivered at the customhouse by the vessel 
agent or other personal representative of the master.
    (g) In lieu of the procedures stated in Sec. Sec. 4.85 and 4.87 and 
at the option of the owner or operator, unmanned non-self-propelled 
barges specifically designed for carriage aboard a vessel and regularly 
carried aboard a vessel in the foreign trade, hereinafter referred to as 
LASH-type barges, may move under a simplified permit-to-proceed 
procedure as follows:
    (1) At the port where a LASH-type barge begins a coastwise movement 
with inward foreign cargo, a permit to proceed on the Vessel Entrance or 
Clearance Statement, Customs Form 1300, must be obtained. A single 
permit to proceed may be used for all the barges proceeding to the same 
port of unlading in the same town. An inward foreign manifest of the 
cargo in each barge, destined to the port of unlading shown on the 
permit to proceed, must be attached to each permit. At the port of 
unlading of the barge, report of arrival and entry must be made 
immediately upon arrival to the appropriate Customs officer by 
presentation of the permit to proceed, manifests, and a new Vessel 
Entrance or Clearance Statement, Customs Form 1300. If only part of the 
inward foreign cargo is unladen, a new permit to proceed must be 
obtained and the inward foreign manifests must be attached to it.
    (2) At the port where a LASH-type barge begins a coastwise movement 
with export cargo, a permit to proceed on the Vessel Entrance or 
Clearance Statement, Customs Form 1300, must be presented to the 
appropriate Customs officer. A single permit to proceed may be presented 
for all the barges proceeding from the same port of lading in the same 
tow. Required shipper's export declarations for LASH-type barges must be 
filed at the port where the barges will be taken aboard a barge-carrying 
vessel. At the next port, a report of arrival must be made immediately 
upon arrival and entry must be made within 48 hours by presentation of 
the permit to proceed received upon departure from the prior port and a 
newly executed Vessel Entrance or Clearance Statement, Customs Form 
1300.
    (3) When foreign LASH-type barges are proceeding between ports of 
the United States under paragraph (e) of this section, a single permit 
to proceed may be used for all the barges proceeding to the same port in 
the same tow.
    (4) In lieu of the master of the towing vessel executing and 
delivering documents required under permit-to-proceed procedures (see 
Sec. 4.81(f)) at the port where a LASH-type barge begins a coastwise 
movement, the master of the towing vessel may designate in writing the 
owner or operator of the barges as his representative with authority to 
execute and deliver such documents at the customhouse. The owner or 
operator of the barges may designate representatives to perform such 
functions at ports or places where permit-to-proceed documents must be 
delivered. Documents obtained from Customs officers at one place by such 
a representative may be forwarded by any suitable means to the 
representative who must present them to Customs officers at another 
place, the only requirement being that the forms are properly completed 
and are presented within the prescribed time periods. Moreover, instead 
of a written designation from each master of a towing vessel, a blanket 
designation in writing from the owner or operator of one or more towing 
vessels on behalf of masters of their towing vessels, designating the 
owner or operator of the barges to be the representative of the master 
for purposes of executing and delivering permit-to-proceed documents, is 
authorized.
    (5) [Reserved]
    (6) When a LASH-type barge is proceeding to a place in the United 
States that is not a port of entry, Sec. 101.4(a) and (b) of this 
chapter are applicable. No merchandise shall be unladen from a LASH-type 
barge until a permit or special license therefor is obtained in 
accordance with Sec. 4.30 except that a single permit to unlade may be 
used for all

[[Page 58]]

barges that arrived at the port of unlading in the same tow.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 71-169, 36 FR 12604, 
July 2, 1971; T.D. 74-63, 39 FR 6108, Feb. 19, 1974; T.D. 74-284, 39 FR 
39718, Nov. 11, 1974; T.D. 75-315, 40 FR 58852, Dec. 19, 1975; T.D. 77-
241, 42 FR 54936, Oct. 12, 1977; T.D. 77-255, 42 FR 56322, Oct. 25, 
1977; T.D. 83-214, 48 FR 46512, Oct. 13, 1983; T.D. 92-74, 57 FR 35752, 
Aug. 11, 1992; T.D. 93-96, 58 FR 67317, Dec. 21, 1993; T.D. 00-22, 65 FR 
16515, Mar. 29, 2000]



Sec. 4.81a  Certain barges carrying merchandise transferred from another 
barge.

    (a) A LASH-type barge (as defined in Sec. 4.81(g)) documented as a 
vessel of the United States but not qualified to engage in the coastwise 
trade or a LASH-type barge of a nation found to grant reciprocal 
privileges to United States-flag LASH-type barges may transport inward 
foreign and export cargo between points embraced within the coastwise 
laws of the United States after the merchandise has been transferred to 
it from another LASH-type barge owned or leased by the same owner or 
operator. This section is not applicable to transportation between the 
continental United States and noncontiguous States, districts, 
territories, and possessions embraced within the coastwise laws. The 
permit to proceed shall include a statement that the unqualified LASH-
type barge is owned or leased by the owner or operator of the LASH-type 
barge from which the merchandise was transferred.
    (b) The following nations have been found to extend privileges 
reciprocal to those provided in paragraph (a) of this section to LASH-
type barges of the United States:

Federal Republic of Germany.
Netherlands.
Sweden.
Union of Soviet Socialist Republics.

[T.D. 74-63, 39 FR 6108, Feb. 19, 1974, as amended by T.D. 74-292, 39 FR 
41360, Nov. 27, 1974; T.D. 75-7, 39 FR 44660, Dec. 26, 1974; T.D. 75-
315, 40 FR 58852, Dec. 19, 1975; T.D. 78-492, 43 FR 58814, Dec. 18, 
1978]



Sec. 4.82  Touching at foreign port while in coastwise trade.

    (a) A United States documented vessel with a registry or, coastwise 
endorsement, or both which, during a voyage between ports in the United 
States, touches at one or more foreign ports and there discharges or 
takes on merchandise, passengers, baggages, or mail shall obtain a 
permit to proceed or clearance at each port of lading in the United 
States for the foreign port or ports at which it is intended to touch. 
The Cargo Declaration Outward With Commercial Forms, Customs Form 1302-A 
(see Sec. 4.63), shall show only the cargo for foreign destination. 
(See Sec. Sec. 4.61 and 4.87.)
    (b) The master shall also present to the port director a coastwise 
Cargo Declaration in triplicate of the merchandise to be transported via 
the foreign port or ports to the subsequent ports in the United States. 
It shall describe the merchandise and show the marks and numbers of the 
packages, the names of the shippers and consignees, and the 
destinations. The port director shall certify the two copies and return 
them to the master. Merchandise carried by the vessel in bond under a 
transportation entry and manifest, Customs Form 7512, shall not be shown 
on the coastwise Cargo Declaration.
    (c) Upon arrival from the foreign port or ports at the subsequent 
port in the United States, a report of arrival and entry of the vessel 
shall be made, and tonnage taxes shall be paid unless the vessel is 
properly operating under a document with Great Lakes license 
endorsement. The master shall present Cargo Declaration in accordance 
with Sec. 4.7 and the certified copies of the coastwise Cargo 
Declaration, Customs Form 1302.
    (d) All merchandise on the vessel upon its arrival at the subsequent 
port in the United States is subject to such Customs examination and 
treatment as may be necessary to protect the revenue. Any article on 
board which is not identified to the satisfaction of the port director, 
by the coastwise Cargo Declaration, Customs Form 1302, or otherwise, as 
part of the coastwise cargo, shall be treated as imported merchandise.

[T.D. 77-255, 42 FR 56322, Oct. 25, 1977, as amended by T.D. 83-214, 48 
FR 46513, Oct. 13, 1983; T.D. 84-193, 49 FR 35485, Sept. 10, 1984; T.D. 
99-64, 64 FR 43265, Aug. 10, 1999]

[[Page 59]]



Sec. 4.83  Trade between United States ports on the Great Lakes and 
other ports of the United States.

    (a) If a vessel proceeding from or to a port of the United States on 
the Great Lakes to or from any other port of the United States via the 
St. Lawrence River is intended to touch at any foreign port and does so 
touch, it will be subject to the usual requirements for manifesting, 
clearing, report of arrival, entry, payment of fees for entry and 
clearance, and tonnage taxes. Vessels which are boarded on the St. 
Lawrence River by Canadian authorities for the purposes of inspecting 
the vessel and taking a passing report are not deemed to have touched at 
a foreign port, provided that no ship's stores are landed or taken 
aboard and no other business is transacted at the port or place of 
boarding.
    (b) A vessel in the coastwise trade only, which is proceeding from a 
port of the United States on the Great Lakes via the Hudson River and 
otherwise than by sea, may operate under a document with a Great Lakes 
license endorsement and shall not be subject to the requirements for 
clearance, report of arrival, or entry.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 69-266, 34 FR 20423, 
Dec. 31, 1969; T.D. 83-214, 48 FR 46513, Oct. 13, 1983]



Sec. 4.84  Trade with noncontiguous territory.

    (a) No foreign vessel shall depart from a port in noncontiguous 
territory of the United States for any other port in noncontiguous 
territory or for any port in any State or the District of Columbia, nor 
from any port in any State or the District of Columbia for any port in 
noncontiguous territory, until a clearance for the vessel has been 
granted. Such a clearance shall be granted in accordance with the 
applicable provisions of Sec. 4.61 of the regulations of this part, 
including clearance of a vessel simultaneously engaged in one or more of 
the transactions listed in Sec. 4.90(a)(4), (5), or (6) of this part. 
When merchandise is laden on a foreign vessel in noncontiguous territory 
other than Puerto Rico, for transportation on that vessel to a port in 
any State, the District of Columbia, or noncontiguous territory, and 
when this transportation is not forbidden by the coastwise laws, the 
merchandise may be laden and shipped without shipper's export 
declarations.
    (b) The master of every foreign vessel arriving at a port in any 
State or the District of Columbia or in noncontiguous territory of the 
United States from a port in noncontiguous territory to which the 
coastwise laws do not apply (e.g., Virgin Islands and American Samoa), 
or arriving at any port in noncontiguous territory to which the 
coastwise laws do not apply from any place embraced within the coastwise 
laws, shall immediately report its arrival and make entry for the vessel 
within 48 hours after its arrival.
    (c)(1) A vessel which is not required to clear but which is 
transporting merchandise from a port in any State or the District of 
Columbia to any noncontiguous territory of the United States (excluding 
Puerto Rico), or from Puerto Rico to any State or the District of 
Columbia, or any other noncontiguous territory, shall not be permitted 
to depart without filing a complete manifest, when required by 
regulations of the Bureau of the Census (15 CFR part 30), and all 
required Shipper's Export Declarations, unless before the vessel departs 
an approved bond is filed for the timely production of the required 
documents, as specified in 15 CFR 30.24. Requests for permission to 
depart may be written or oral and permission to depart shall be granted 
orally by the appropriate Customs officer. However, if the request is to 
depart prior to the filing of the required manifest and export 
declarations, permission shall not be granted unless the appropriate 
bond is on file. In the latter case, the Customs officer shall keep a 
simplified record of the necessary information in order to assure that 
the manifest and export declarations are filed within the required time 
period. The Vessel Entrance or Clearance Statement, Customs Form 1300 
(see Sec. 4.63(a)), required at the time of clearance is not required 
to be taken to obtain permission to depart.
    (2) A vessel which is not required to clear but which is 
transporting merchandise from a port in any State or the District of 
Columbia to Puerto Rico shall file a complete manifest,

[[Page 60]]

when required by the regulations of the Bureau of the Census (15 CFR 
part 30), and all required Shipper's Export Declarations within one 
business day after arrival, as defined in Sec. 4.2(b) of this part, 
with the appropriate Customs officer in Puerto Rico. If the complete 
manifest and all required Shipper's Export Declarations are not filed 
with the appropriate Customs officer within that time frame, an 
appropriate bond shall be filed with the Customs officer for the timely 
production of the required documents as specified in 15 CFR 30.24. In 
these instances when a bond is filed, the Customs officer shall keep a 
simplified record of the necessary information in order to ensure that 
the manifest and export declarations are filed not later than the 
seventh business day after arrival in Puerto Rico.
    (d) Upon arrival of a vessel of the United States at a port in any 
State, the District of Columbia, or Puerto Rico from a port in 
noncontiguous territory other than Puerto Rico, the master shall 
immediately report its arrival and shall prepare, produce, and file a 
Cargo Declaration in the form and manner and at the times specified in 
Sec. Sec. 4.7 and 4.9 but shall not be required to make entry. If the 
vessel proceeds directly to another port in any State, the District of 
Columbia, or Puerto Rico, the master shall prepare, produce, and file a 
Cargo Declaration in the form and manner and at the times specified in 
Sec. 4.85 but no permit to proceed on the Vessel Entrance or Clearance 
Statement, Customs Form 1300, shall be required for the purposes of this 
paragraph. No cargo shall be unladen from any such vessel until Cargo 
Declarations have been filed and a permit to unlade has been issued in 
accordance with the procedure specified in Sec. 4.30.
    (e) No vessel shall bring guano to the United States from a guano 
island appertaining to the United States (see 48 U.S.C. 1411) unless 
such a vessel is entitled to engage in the coastwide trade.
    (f) No vessel owned by a corporation which qualifies as a citizen 
under the Act of September 2, 1958 (46 U.S.C. 883-1) shall, while under 
demise or bareboat charter from such corporation, be granted clearance 
or permitted to depart in trade with noncon tiguous territory.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 69-266, 34 FR 20423, 
Dec. 31, 1969: T.D. 71-169, 36 FR 12604, July 2, 1971; T.D. 77-255, 42 
FR 56323, Oct. 25, 1977; T.D. 79-276, 44 FR 61956, Oct. 29, 1979; T.D. 
93-61, 58 FR 41425, Aug. 4, 1993; T.D. 93-96, 58 FR 67317, Dec. 21, 
1993; T.D. 00-22, 65 FR 16516, Mar. 29, 2000]



Sec. 4.85  Vessels with residue cargo for domestic ports.

    (a) Any foreign vessel or documented vessel with a registry or, 
where appropriate, a Great Lakes license endorsement, arriving from a 
foreign port with cargo or passengers manifested for ports in the United 
States other than the port of first arrival, may proceed with such cargo 
or passengers from port to port, provided a bond on Customs Form 301, 
containing the bond conditions set forth in Sec. 113.64 of this chapter 
relating to international carriers in a suitable amount is on file with 
the director of the port of first entry. \115\ No additional bond shall 
be required at subsequent ports of entry. Before the vessel departs from 
the port of first arrival, the master shall obtain from the port 
director a certified copy of the complete inward foreign manifest 
(hereinafter referred to as the traveling manifest). The certified copy 
shall have a legend similar to the following endorsed on the Vessel 
Entrance or Clearance Statement, Customs Form 1300:
---------------------------------------------------------------------------

    \115\ ``* * * Any vessel arriving from a foreign port or place 
having on board merchandise shown by the manifest to be destined to a 
port or ports in the United States other than the port of entry at which 
such vessel first arrived and made entry may proceed with such 
merchandise from port to lading thereof.'' (Tariff Act of 1930, sec. 
442; 19 U.S.C. 1442)
    116-118 [Reserved]

________________________________________________________________________
Port Date
    Certified to be a true copy of the original inward foreign manifest.

________________________________________________________________________
                                                     Signature and title

    (b)(1) Before a vessel proceeds from one domestic port to another 
with cargo or passengers on board as described in paragraph (a) of this 
section,

[[Page 61]]

the master must present to the director of such port of departure an 
application in triplicate on Customs Form 1300 for a permit to proceed 
to the next port. When a port director grants the permit on Customs Form 
1300, the following legend must be endorsed on the form:

Port
Date
Permission is granted to proceed to the port named in item 12.
----------------
Signature and title

    (2) The duplicate must be attached to the traveling manifest and the 
triplicate (the permit to proceed to be delivered at the next port) must 
be returned to the master, together with the traveling manifest and the 
vessel's document, if on deposit. If no inward foreign cargo or 
passengers are to be discharged at the next port, that fact must be 
indicated on Customs Form 1300 by inserting ``To load only'' in 
parentheses after the name of the port to which the vessel is to 
proceed. The traveling Crew's Effects Declaration covering articles 
acquired abroad by officers and members of the crew, together with the 
unused crewmembers' declarations prepared for such articles, will be 
placed in a sealed envelope addressed to the appropriate Customs officer 
at the next port and given to the master for delivery.
    (c)(1) Upon the arrival of a vessel at the next and each succeeding 
domestic port with inward foreign cargo or passengers still on board, 
the master must immediately report its arrival and make entry within 48 
hours. To make such entry, he must deliver to the port director the 
vessel's document, the permit to proceed (Customs Form 1300 endorsed in 
accordance with paragraph (b) of this section), the traveling manifest, 
and the traveling Crew's Effects Declaration (Customs Form 1304), 
together with the crewmembers' declarations received on departure from 
the previous port. The master must also present an abstract manifest 
consisting of a newly executed Vessel Entrance or Clearance Statement, 
Customs Form 1300, a Cargo Declaration, Customs Form 1302, and a 
Passenger List, Customs and Immigration Form I-418, in such number of 
copies as may be required for local Customs purposes, of any cargo or 
passengers on board manifested for discharge at that port, a Crew's 
Effects Declaration in duplicate of all unentered articles acquired 
abroad by officers and crewmembers which are still on board, a Ship's 
Stores Declaration, Customs Form 1303, in duplicate of the sea or ship's 
stores remaining on board, and if applicable, the Cargo Declaration 
required by Sec. 4.86. If no inward foreign cargo or passengers are to 
be discharged, the Cargo Declaration or Passenger List may be omitted 
from the abstract manifest, and the following legend must be placed in 
item 15 of the Vessel Entrance or Clearance Statement:

    Vessel on an inward foreign voyage with residue cargo/passengers for 
--------. No cargo or passengers for discharge at this port.

    (2) The traveling manifest, together with a copy of the newly 
executed Vessel Entrance or Clearance Statement, will serve the purpose 
of a copy of an abstract manifest at the port where it is finally 
surrendered.
    (d) If boarding is required before the port director will issue a 
permit or special license to lade or unlade, the abstract manifest 
described in paragraph (c) of this section shall be ready for 
presentation to the boarding officer.
    (e) The traveling manifest shall be surrendered to the director of 
the final domestic port of discharge of the cargo, except that if 
residue foreign cargo remains on board for discharge at a foreign port 
or ports, the traveling manifest shall be surrendered at the final port 
of departure from the United States. However, it shall not be 
surrendered at the port from which the vessel departs for another United 
States port, via an intermediate foreign port, under Sec. 4.89 if 
residue foreign cargo remains on board for discharge at a subsequent 
U.S. port. The traveling Crew's Effects Declaration shall be finally 
surrendered to the director of any port from

[[Page 62]]

which the vessel will depart directly for a foreign port.

[T.D. 71-169, 36 FR 12604, July 2, 1971, as amended by T.D. 77-255, 42 
FR 56323, Oct. 25, 1977; T.D. 83-214, 48 FR 46513, Oct. 13, 1983; T.D. 
84-213, 49 FR 41164, Oct. 19, 1984; T.D. 92-74, 57 FR 35752, Aug. 11, 
1992; T.D. 93-96, 58 FR 67317, Dec. 21, 1993; T.D. 94-24, 59 FR 13200, 
Mar. 21, 1994; T.D. 00-22, 65 FR 16516, Mar. 29, 2000]



Sec. 4.86  Intercoastal residue--cargo procedure; optional ports.

    (a) When a vessel arrives at an Atlantic or Pacific coast port from 
a foreign port or ports with residue cargo for delivery at a port or 
ports on the opposite coast or on the Great Lakes, or where such arrival 
is at a port on the Great Lakes, with residue cargo for delivery at a 
port or ports on the Atlantic or Pacific coasts, or both, and the 
master, owner, or agent is unable at that time to designate the specific 
port or ports of discharge of that residue cargo, the Cargo Declaration, 
Customs Form 1302, filed on entry in accordance with Sec. 4.7(b) shall 
show such cargo as destined for ``optional ports, Atlantic coast,'' or 
``optional ports, Pacific coast,'' or ``optional ports, Great Lakes 
coast,'' as the case may be. The traveling manifest shall be similarly 
noted. Upon arrival of the vessel at the first port on the next coast, 
the master, owner, or agent must designate the port or ports of 
discharge of residue cargo as required by section 431, Tariff Act of 
1930.
    (b) For this purpose, the master shall furnish with the other papers 
required upon entry a Cargo Declaration, Customs Form 1302 in original 
only of inward foreign cargo remaining on board for discharge at 
optional ports on that coast, and the Cargo Declaration, must designate 
the specific ports of intended discharge for that cargo. The traveling 
manifest shall be amended to agree with that Cargo Declaration so as to 
show the newly designated ports of discharge on that coast and shall be 
used to verify the abstract Cargo Declarations surrendered at subsequent 
ports on that coast.

[T.D. 77-255, 42 FR 56323, Oct 25, 1977]



Sec. 4.87  Vessels proceeding foreign via domestic ports.

    (a) Any foreign vessel or documented vessel with a registry or, 
where appropriate, a Great Lakes license endorsement may proceed from 
port to port in the United States to lade cargo or passengers for 
foreign ports.
    (b) When applying for a clearance from the first and each succeeding 
port of lading, the master must present to the port director a Vessel 
Entrance or Clearance Statement, Customs Form 1300, in duplicate and a 
Cargo Declaration Outward With Commercial Forms, Customs Form 1302-A, in 
accordance with Sec. 4.63(a), of all the cargo laden for export at that 
port. The Vessel Entrance or Clearance Statement must clearly indicate 
all previous ports of lading.
    (c) Upon compliance with the applicable provisions of Sec. 4.61, 
the port director will grant the permit to proceed by making the 
endorsement prescribed by Sec. 4.85(b) on the Vessel Entrance or 
Clearance Statement, Customs Form 1300. One copy will be returned to the 
master, together with the vessel's document if on deposit. The traveling 
Crew's Effects Declaration, Customs Form 1304, together with any unused 
crewmembers' declarations, will be placed in a sealed envelope addressed 
to the appropriate Customs officer at the next domestic port and 
returned to the master.
    (d) On arrival at the next and each succeeding domestic port, the 
master must immediately report arrival. He must also make entry within 
48 hours by presenting the vessel's document, the permit to proceed on 
the Vessel Entrance or Clearance Statement, Customs Form 1300, received 
by him upon departure from the last port, a Crew's Effects Declaration, 
Customs Form 1304, in duplicate listing all unentered articles acquired 
aboard by officers and crew of the vessel which are still retained on 
board, and a Ship's Stores Declaration, Customs Form 1303, in duplicate 
of the stores remaining aboard. The master must also execute a Vessel 
Entrance or Clearance Statement. The traveling Crew's Effects 
Declaration, together with any unused crewmembers' declarations returned 
to the

[[Page 63]]

master at the prior port, will be delivered by him to the port director.
    (e) Clearance shall be granted at the final port of departure from 
the United States in accordance with Sec. 4.61.
    (f) If a complete Cargo Declaration Outward With Commercial Forms, 
Customs Form 1302-A (see Sec. 4.63), and all required shipper's export 
declarations are not available for filing before departure of a vessel 
from any port, clearance on the Vessel Entrance or Clearance Statement, 
Customs Form 1300, may be granted in accordance with Sec. 4.75, subject 
to the limitation specified in Sec. 4.75(c).
    (g) When the procedure outlined in paragraph (f) of this section is 
followed at any port, the owner or agent of the vessel must deliver to 
the director of that port within 4 business days after the vessel's 
clearance a Cargo Declaration Outward With Commercial Forms, Customs 
Form 1302-A (see Sec. 4.63), and the export declarations to cover the 
cargo laden for export at that port.

[T.D. 77-255, 42 FR 56324, Oct. 25 1977, as amended by T.D. 83-214, 48 
FR 46513, Oct. 13, 1983; T.D. 84-193, 49 FR 35485, Sept. 10, 1984; T.D. 
92-74, 57 FR 35752, Aug. 11, 1992; T.D. 93-96, 58 FR 67317, Dec. 21, 
1993; T.D. 00-22, 65 FR 16517, Mar. 29, 2000]



Sec. 4.88  Vessels with residue cargo for foreign ports.

    (a) Any foreign vessel or documented vessel with a registry or, 
where appropriate, a Great Lakes license endorsement which arrives at a 
port in the United States from a foreign port shall not be required to 
unlade any merchandise manifested for a foreign destination provided a 
bond on Customs Form 301, containing the bond conditions set forth in 
Sec. 113.64 of this chapter relating to international carriers in a 
suitable amount is on file with the director of the port of first entry. 
\119\
---------------------------------------------------------------------------

    \119\ ``Any vessel having on board merchandise shown by the manifest 
to be destined to a foreign port or place may, after the report and 
entry of such vessel under the provisions of this Act, proceed to such 
foreign port of destination with the cargo so destined therefor, without 
unlading the same and without the payment of duty thereon. * * *'' 
(Tariff Act of 1930, sec. 442; 19 U.S.C. 1442)
---------------------------------------------------------------------------

    (b) The port director shall designate the items of such merchandise, 
if any, for which foreign landing certificates \120\ will be required.
---------------------------------------------------------------------------

    \120\ ``The Secretary of the Treasury may by regulations require the 
production of landing certificates in respect of merchandise exported 
from the United States, or in respect of residue cargo, in cases in 
which he deems it necessary for the protection of the revenue.'' (Tariff 
Act of 1930, sec. 622; 19 U.S.C. 1622)
---------------------------------------------------------------------------

    (c) If the vessel clears directly foreign from the first port of 
arrival, cargo brought in from foreign ports and retained on board may 
be declared on the Cargo Declaration Outward With Commercial Forms, 
Customs Form 1302-A (see Sec. 4.63), by the insertion of the following 
statement:

    All cargo declared on entry in this port as cargo for discharge at 
foreign ports and so shown on the Cargo Declaration filed upon entry has 
been and is retained on board.


If any such cargo has been landed, the Cargo Declaration shall describe 
each item of the cargo from a foreign port which has been retained on 
board (see Sec. 4.63(a).
    (d) If the vessel is proceeding to other ports in the United States 
with foreign residue cargo on board manifested for discharge at a 
foreign port or ports, a procedure like that set forth in Sec. 4.85 
shall be followed with respect thereto.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 77-255, 42 FR 56324, 
Oct. 25, 1977; T.D. 83-214, 48 FR 46513, Oct. 13, 1983; T.D. 84-193, 49 
FR 35485, Sept. 10, 1984; 49 FR 41164, Oct. 19, 1984]



Sec. 4.89  Vessels in foreign trade proceeding via domestic ports and 
touching at intermediate foreign ports.

    (a) A vessel proceeding from port to port in the United States in 
accordance with Sec. Sec. 4.85, 4.86, or 4.87 may touch at an 
intermediate foreign port or ports to lade or discharge cargo or 
passengers. In such a case the vessel shall obtain clearance from the 
last port of departure in the United States before proceeding to the 
intermediate foreign port or ports at which it is intended to touch. The 
Cargo Declaration Outward With Commercial Forms, Customs Form 1302-A 
(see Sec. 4.63), shall show the cargo for such foreign destination in 
the manner provided in Sec. 4.88(c).

[[Page 64]]

    (b) The master shall also present to the port director the Cargo 
Declaration or Cargo Declarations required by Sec. Sec. 4.85, 4.86, or 
4.87, and obtain a permit to proceed on the Vessel Entrance or Clearance 
Statement, Customs Form 1300, to the next port in the United States at 
which the vessel will touch.
    (c) Upon arrival at the next port in the United States after 
touching at a foreign port or ports a report of arrival and entry shall 
be made. The Cargo Declaration, Customs Form 1302, filed at time of 
entry shall list the cargo laden at the intermediate foreign port or 
ports.
    (d) The master shall also present to the port director the permit to 
proceed on the Vessel Entrance or Clearance Statement, Customs Form 
1300, and the Cargo Declaration from the last previous port in the 
United States as provided for in Sec. Sec. 4.85, 4.86, or 4.87.

[T.D. 77-255, 42 FR 56324, Oct. 25, 1977, as amended by T.D. 84-193, 49 
FR 35485, Sept. 10, 1984; T.D. 00-22, 65 FR 16517, Mar. 29, 2000]



Sec. 4.90  Simultaneous vessel transactions.

    (a) A vessel may proceed from port to port in the United States for 
the purpose of engaging in two or more of the following transactions 
simultaneously, \121\ subject to the limitations hereafter mentioned in 
this section and the conditions stated in the sections indicated in the 
list:
---------------------------------------------------------------------------

    \121\ For the purposes of this part, an inward foreign voyage is 
completed at the port of final discharge of inbound passengers or cargo, 
and an outward foreign voyage begins at the port where cargo or 
passengers are first laden for carriage to a foreign destination.
---------------------------------------------------------------------------

    (1) Coastwise trade (Sec. 4.80).
    (2) Touching at a foreign port while in coastwise trade (Sec. 
4.82).
    (3) Trade with noncontiguous territory of the United States (Sec. 
4.84).
    (4) Carriage of residue cargo or passengers from foreign ports 
(Sec. Sec. 4.85-4.86).
    (5) Carriage of cargo or passengers laden for foreign ports (Sec. 
4.87).
    (6) Carriage of residue cargo for foreign ports (Sec. 4.88).
    (b) When a vessel is engaged simultaneously in two or more such 
transactions, the master shall indicate each type of transaction in 
which the vessel is engaged in his application for clearance on Customs 
Form 1300. The master shall conform simultaneously to all requirements 
of these regulations with respect to each transaction in which the 
vessel is engaged.
    (c) A foreign vessel is not authorized by this section to engage in 
the coastwise trade, including trade with noncontiguous territory 
embraced within the coastwise laws.
    (d) A documented vessel may engage in transactions (2), (4), (5), or 
(6) only if the vessel's document has a registry or, where appropriate, 
a Great Lakes license endorsement. Such a vessel shall not engage in 
transactions (1) or (3) unless permitted by the endorsement on its 
Certificate of Documentation to do so.
    (e) When a single entry bond, containing the bond conditions set 
forth in Sec. 113.64, relating to international carriers, is filed at 
any port and it is applicable to the current voyage of the vessel, it 
shall cover all other transactions engaged in on that voyage of a like 
nature and another bond containing the international carrier bond 
conditions need not be filed.

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 71-169, 36 FR 12605, 
July 2, 1971; T.D. 83-214, 48 FR 46513, Oct. 13, 1983; T.D. 84-213, 49 
FR 41164, Oct. 19, 1984; T.D. 00-22, 65 FR 16517, Mar. 29, 2000]



Sec. 4.91  Diversion of vessel; transshipment of cargo.

    (a) If any vessel granted a permit to proceed from one port in the 
United States for another such port as provided for in Sec. Sec. 
4.81(e), 4.85, 4.87, or 4.88, is, while en route, diverted to a port in 
the United States other than the one specified in the permit to proceed 
(Customs Form 1300), \122\ the owner or agent of the vessel immediately 
shall give notice of the diversion to the port director who granted the 
permit, informing him of the new destination of the vessel and 
requesting him to notify the director of the latter port. Such 
notification by the port director shall constitute an amendment of the 
permit previously granted, shall authorize the vessel to proceed to the 
new destination, and shall be filed by the director

[[Page 65]]

of the latter port with the Form 1300 submitted on entry of the vessel.
---------------------------------------------------------------------------

    \122\ See Sec. 4.33.
---------------------------------------------------------------------------

    (b) If any vessel cleared from a port in the United States for a 
foreign port as provided for in Sec. 4.60 is diverted, while en route, 
to a port in the United States other than that from which it was 
cleared, the owner or agent of the vessel immediately shall give notice 
of the diversion to the port director who granted the clearance, 
informing him of the new destination of the vessel and requesting him to 
notify the director of the latter port. Such notification by the port 
director shall constitute a permit to proceed coastwise, and shall 
authorize the vessel to proceed to the new destination. On arrival at 
the new destination, the master shall immediately report arrival. He 
shall also make entry within 48 hours by presenting (1) the vessel's 
document, (2) the foreign clearance on Form 1300 granted by the director 
of the port of departure, (3) a certificate that when the vessel was 
cleared from the last previous port in the United States there were on 
board cargo and/or passengers for the ports named in the foreign 
clearance certificate only and that additional cargo or passengers 
(have) (have not) been taken on board or discharged since such clearance 
was granted (specifying the particulars if any passengers or cargo were 
taken on board or discharged), (4) a Crew's Effects Declaration in 
duplicate of all unentered articles acquired abroad by the officers and 
crew of the vessel which are still retained on board, and (5) a Ship's 
Stores Declaration in duplicate of the stores on board.
    (c) In a case of necessity, a port director may grant an application 
on Customs Form 3171 of the owner or agent of an established line for 
permission to transship \123\ all cargo and passengers from one vessel 
of the United States to another such vessel under Customs supervision, 
if the first vessel is transporting residue cargo for domestic or 
foreign ports or is on an outward foreign voyage or a voyage to 
noncontiguous territory of the United States, and is following the 
procedure prescribed in Sec. Sec. 4.85, 4.87, or 4.88. When inward 
foreign cargo or passengers are so transshipped to another vessel, a 
separate traveling manifest (Cargo Declaration, Customs Form 1302, or 
Passenger List, Customs and Immigration Form I-418) shall be used for 
the transshipped cargo or passengers, whether or not the forwarding 
vessel is also carrying other residue cargo or passengers. An 
appropriate cross-reference shall be made on the separate traveling 
manifest to show whether any other traveling manifest is being carried 
forward on the same vessel.
---------------------------------------------------------------------------

    \123\ See Sec. 4.31.
    \124\ [Reserved]

[T.D. 71-169, 36 FR 12605, July 2, 1971, as amended by T.D. 77-255, 42 
FR 56324, Oct. 25, 1977; T.D. 93-96, 58 FR 67317, Dec. 21, 1993; T.D. 
00-22, 65 FR 16517, Mar. 29, 2000]



Sec. 4.92  Towing.

    No vessel other than a vessel documented for the coastwise or Great 
Lakes trade, or which would be entitled to be so documented except for 
its tonnage (see Sec. 4.80), may tow a vessel other than a vessel in 
distress between points in the U.S. embraced within the coastwise laws, 
or for any part of such towing (46 U.S.C. App. 316(a)). The penalties 
for violation of this provision are a fine of from $350 to $1100 against 
the owner or master of the towing vessel and a further penalty against 
the towing vessel of $60 per ton of the towed vessel (46 U.S.C. App. 
316(a), as adjusted by the Federal Civil Penalties Inflation Adjustment 
Act of 1990).

[T.D. 93-12, 58 FR 13197, Mar. 10, 1993, as amended by T.D. 03-11, 68 FR 
13820, Mar. 21, 2003]



Sec. 4.93  Coastwise transportation by certain vessels of empty vans, 

tanks, and barges, equipment for use with vans and tanks; empty 
instruments of 
          international traffic; stevedoring equipment and material; 
          procedures.

    (a) Vessels of the United States prohibited from engaging in the 
coastwise trade and vessels of nations found to grant reciprocal 
privileges to vessels of the United States may transport the following 
articles between points embraced within the coastwise laws of the United 
States:
    (1) Empty cargo vans, empty lift vans, and empty shipping tanks; 
equipment for use with cargo vans, lift vans,

[[Page 66]]

or shipping tanks; empty barges specifically designed for carriage 
aboard a vessel and equipment, excluding propulsion equipment, for use 
with such barges; and empty instruments of international traffic 
exempted from application of the Customs laws by the Secretary of the 
Treasury pursuant to the provisions of section 322(a), Tariff Act of 
1930 (19 U.S.C. 1322(a)), if such articles are owned or leased by the 
owner or operator of the transporting vessel and are transported for his 
use in handling his cargo in foreign trade.
    (2) Stevedoring equipment and material, if such equipment and 
material is owned or leased by the owner or operator of the transporting 
vessel, or is owned or leased by the stevedoring company contracting for 
the lading or unlading of that vessel, and is transported without charge 
for use in the handling of cargo in foreign trade. \125\
---------------------------------------------------------------------------

    \125\ ``* * * Provided further, That upon such terms and conditions 
as the Secretary of the Treasury by regulation may prescribe, and, if 
the transporting vessel is of foreign registry, upon a finding by the 
Secretary of the Treasury, pursuant to information obtained and 
furnished by the Secretary of State, that the government of the nation 
of registry extends reciprocal privileges to vessels of the United 
States, this section shall not apply to the transportation by vessels of 
the United States not qualified to engage in the coastwise trade, or by 
vessels of foreign registry, of (a) empty cargo vans, empty lift vans, 
and empty shipping tanks, (b) equipment for use with cargo vans, lift 
vans, or shipping tanks, (c) empty barges specifically designed for 
carriage aboard a vessel, and (d) any empty instrument for international 
traffic exempted from application of the customs laws by the Secretary 
of the Treasury pursuant to the provisions of section 322(a), Tariff Act 
of 1930 (19 U.S.C. 1322(a)), if the articles described in clauses (a) 
through (d) are owned or leased by the owner or operator of the 
transporting vessel and are transported for his use in handling his 
cargo in foreign trade; and (e) stevedoring equipment and material, if 
such equipment and material is owned or leased by the owner or operator 
of the transported vessel, or is owned or leased by the stevedoring 
company contracting for the lading or unlading of that vessel, and is 
transported without charge for use in the handling of cargo in foreign 
trade.'' (46 U.S.C. 883).
    126-130 [Reserved]
---------------------------------------------------------------------------

    (b)(1) The following nations have been found to extend privileges 
reciprocal to those provided in paragraph (a) of this section for empty 
cargo vans, empty lift vans, and empty shipping tanks to vessels of the 
United States:

Antigua and Barbuda.
Australia.
Austria.
Bahamas, The.
Bahrain
Belgium.
Bermuda.
Brazil.
Canada.
Chile.
China*.
Colombia.
Cyprus.
Denmark.
Ecuador.
Finland.
France.
Guatemala.
Germany, Federal Republic of.
Greece.
Iceland.
India.
Iran.
Ireland.
Israel.
Italy.
Ivory Coast.
Japan.
Kuwait.
Liberia.
Luxembourg.
Malta.
Marshall Islands, Republic of the.
Mexico.
Netherlands.
Netherlands Antilles.
Norway.
Pakistan.
Philippines.
Polish People's Republic.
Portugal.
Republic of Korea.
Republic of Panama.
Republic of Singapore.
Republic of Zaire.
St. Vincent and the Grenadines.
Saudi Arabia.
South Africa.
Spain.
Sweden.
Taiwan.
Union of Soviet Socialist Republics.
United Arab Emirates.
United Kingdom (including The Cayman Islands and Hong Kong).
Vanuatu, Republic of.
Yugoslavia, Socialist Federal Republic of.

*See also Taiwan.

    (2) The following nations have been found to extend similar 
reciprocal

[[Page 67]]

privileges in respect to the other articles mentioned in paragraph (a) 
of this section:

Antigua and Barbuda.
Australia.
Austria.
Bahamas, The.
Bahrain
Belgium.
Bermuda.
Brazil.
Chile.
Colombia.
Denmark.
Federal Republic of Germany.
Finland.
France.
Greece.
Guatemala.
Iceland.
India.
Ireland.
Israel.
Italy.
Ivory Coast.
Kuwait.
Liberia.
Luxembourg.
Malta.
Mexico.
Netherlands.
Netherlands Antilles.
Norway.
Polish People's Republic.
Portugal.
Republic of Korea.
Republic of Panama.
Republic of Singapore.
Republic of Zaire.
St. Vincent and the Grenadines.
South Africa.
Spain.
Sweden.
Taiwan.
Union of Soviet Socialist Republics.
United Arab Emirates.
United Kingdom (including The Cayman Islands and Hong Kong).
Vanuatu, Republic of.

    (c) Any Cargo Declaration, Customs Form 1302, required to be filed 
under this part by any foreign vessel shall describe any article 
mentioned in paragraph (a) of this section laden aboard and transported 
from one United States port to another, giving its identifying number or 
symbol, if any, or such other identifying data as may be appropriate, 
the names of the shipper and consignee, and the destination. The Cargo 
Declaration shall also include a statement (1) that the articles 
specified in paragraph (a)(1) of this section are owned or leased by the 
owner or operator of the transporting vessel and are transported for his 
use in handing his cargo in foreign trade; or (2) that the stevedoring 
equipment and material specified in paragraph (a)(2) of this section is 
owned or leased by the owner or operator of the transporting vessel, or 
is owned or leased by the stevedoring company contracting for the lading 
or unlading of that vessel, and is transported without charge for his 
use in handling his cargo in foreign trade. If the director of the port 
of lading is satisfied that there will be sufficient control over the 
coastwise transportation of the article without identifying it by number 
or symbol or such other identifying data on the Cargo Declaration, he 
may permit the use of a Cargo Declaration that does not include such 
information provided the Cargo Declaration includes a statement, that 
the director of the port of unlading will be presented with a statement 
at the time of entry of the vessel that will list the identifying number 
or symbol or other appropriate identifying data for the article to be 
unladen at that port. Applicable penalties under section 584, Tariff Act 
of 1930, as amended (19 U.S.C. 1584), shall be assessed for violation of 
this paragraph.

[T.D. 68-302, 33 FR 18436, Dec. 12, 1968]

    Editorial Note: For Federal Register citations affecting Sec. 4.93, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.

                                 General



Sec. 4.94  Yacht privileges and obligations.

    (a) Any documented vessel with a pleasure license endorsement, as 
well as any undocumented American pleasure vessel, shall be used 
exclusively for pleasure and shall not transport merchandise nor carry 
passengers for pay. Such a vessel which is not engaged in any trade nor 
in any way violating the Customs or navigation laws of the U.S. may 
proceed from port to port in the U.S. or to foreign ports without 
clearing and is not subject to entry upon its arrival in a port of the 
U.S., provided it has not visited a hovering vessel, received 
merchandise while in the customs waters beyond the territorial sea, or 
received merchandise while on the

[[Page 68]]

high seas. Such a vessel shall immediately report arrival to Customs 
when arriving in any port or place within the U.S., including the U.S. 
Virgin Islands, from a foreign port or place.
    (b) A cruising license may be issued to a yacht of a foreign country 
only if it has been made to appear to the satisfaction of the Secretary 
of the Treasury that yachts of the United States are allowed to arrive 
at and depart from ports in such foreign country and to cruise in the 
waters of such ports without entering or clearing at the customhouse 
thereof and without the payment of any charges for entering or clearing, 
dues, duty per ton, tonnage, taxes, or charges for cruising licenses. It 
has been made to appear to the satisfaction of the Secretary of the 
Treasury that yachts of the United States are granted such privileges in 
the following countries:

Argentina.
Australia.
Austria.
Bahama Islands.
Belgium.
Bermuda.
Canada.
Denmark.
Finland.
France.
Germany, Federal Republic of.
Great Britain (including Turks and Caicos Islands; St. Vincent 
(including the territorial waters of the Northern Grenadine Islands), 
the Cayman Islands, the St. Christopher - Nevis - Anguilla Islands and 
the British Virgin Islands).
Greece.
Honduras.
Ireland.
Italy.
Jamaica.
Liberia.
Marshall Islands.
Netherlands.
New Zealand.
Norway.
Sweden.
Switzerland.
Turkey.

    (c) In order to obtain a cruising license for a yacht of any country 
listed in paragraph (b) of this section, there shall be filed with the 
port director an application therefor executed by either the yacht owner 
or the master which shall set forth the owner's name and address and 
identify the vessel by flag, rig, name, and such other matters as are 
usually descriptive of a vessel. The application shall also include a 
description of the waters in which the yacht will cruise, and a 
statement of the probable time it will remain in such waters. Upon 
approval of the application, the port director will issue a cruising 
license in the form prescribed by paragraph (d) of this section 
permitting the yacht, for a stated period not to exceed one year, to 
arrive and depart from the United States and to cruise in specified 
waters of the United States without entering and clearing, without 
filing manifests and obtaining or delivering permits to proceed, and 
without the payment of entrance and clearance fees, or fees for 
receiving manifests and granting permits to proceed, duty on tonnage, 
tonnage tax, or light money. The license shall be granted subject to the 
condition that the vessel shall not engage in trade or violate the laws 
of the United States in any respect. Upon the vessel's arrival at any 
port or place within the U.S. or the U.S. Virgin Islands, the master 
shall comply with 19 U.S.C. 1433 by immediately reporting arrival at the 
nearest Customs facility or other place designated by the port director. 
Individuals shall remain on board until directed otherwise by the 
appropriate Customs officer, as provided in 19 U.S.C. 1459.
    (d) Cruising licenses shall be in the following form:

          License To Cruise in the Waters of the United States

To Port Directors:
    For a period of -------- from --------(Date) the --------(Flag) ----
---- (Rig) yacht --------(Name) belonging to ---------------- of 
(Owner's name) ----------------(Address) shall be permitted to arrive at 
and depart from the United States and to cruise in the waters of the 
Customs port of
________________________________________________________________________
 (Name of port or ports)
without entering and clearing, without filing manifests and obtaining or 
delivering permits to proceed, and without the payment of entry and 
clearance fees, or fees for receiving manifests and granting permits to 
proceed, duty on tonnage, tonnage tax, or light money.
    This license is granted subject to the condition that the yacht 
named herein shall not engage in trade or violate the laws of the United 
States in any respect. Upon arrival at each port or place in the United 
States, the

[[Page 69]]

master shall report the fact of arrival to the Customs officer at the 
nearest customhouse. Such report shall be immediately made.
    Issued this ---- day of --------, 19--
________________________________________________________________________
                                              (Port Director of Customs)
    Warning: This vessel is dutiable:
    (1) If owned by a resident of the United States (including Puerto 
Rico), or brought into the United States (including Puerto Rico), for 
sale or charter to a resident thereof, or
    (2) If brought into the United States (including Puerto Rico) by a 
nonresident free of duty as part of personal effects and sold or 
chartered within one year from date of entry.
    Any offer to sell or charter (for example, a listing with yacht 
brokers or agents) is considered evidence that the vessel was brought in 
for sale or charter to a resident or, if made within one year of entry 
of a vessel brought in free of duty as personal effects, that the vessel 
no longer is for the personal use of the non-resident.
    If the vessel is sold or chartered, or offered for sale or charter, 
in the circumstances described, without the owner first having filed a 
consumption entry and having paid duty, the vessel may be subject to 
seizure or to a monetary claim equal to the value of the vessel. See 
Chapter 89, Additional U.S. Note 1, HTSUS, and subheadings 8903.10, 
8903.91, 8903.92, 8903.99.10, 8903.99.20, and 8903.99.90, HTSUS.
    (e) A foreign-flag yacht which is not in possession of a cruising 
license shall be required to comply with the laws applicable to foreign 
vessels arriving at, departing from, and proceeding between ports of the 
United States.

[T.D. 69-266, 34 FR 20423, Dec. 31, 1969]

    Editorial Note: For Federal Register citations affecting Sec. 4.94, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.



Sec. 4.94a  Large yachts imported for sale.

    (a) General. An otherwise dutiable vessel used primarily for 
recreation or pleasure and exceeding 79 feet in length that has been 
previously sold by a manufacturer or dealer to a retail consumer and 
that is imported with the intention to offer for sale at a boat show in 
the United States may qualify at the time of importation for a deferral 
of entry completion and deposit of duty. The following requirements and 
conditions will apply in connection with a deferral of entry completion 
and duty deposit under this section:
    (1) The importer of record must certify to Customs in writing that 
the vessel is being imported pursuant to 19 U.S.C. 1484b for sale at a 
boat show in the United States;
    (2) The certification referred to in paragraph (a)(1) of this 
section must be accompanied by the posting of a single entry bond 
containing the terms and conditions set forth in appendix C of part 113 
of this chapter. The bond will have a duration of 6 months after the 
date of importation of the vessel, and no extensions of the bond period 
will be allowed;
    (3) The filing of the certification and the posting of the bond in 
accordance with this section will permit Customs to determine whether 
the vessel may be released;
    (4) All subsequent transactions with Customs involving the vessel in 
question, including any transaction referred to in paragraphs (b) 
through (d) of this section, must be carried out in the same port of 
entry in which the certification was filed and the bond was posted under 
this section; and
    (5) The vessel in question will not be eligible for issuance of a 
cruising license under Sec. 4.94 and must comply with the laws 
respecting vessel entry and clearance when moving between ports of entry 
during the 6-month bond period prescribed under this section.
    (b) Exportation within 6-month period. If a vessel for which entry 
completion and duty payment are deferred under paragraph (a) of this 
section is not sold but is exported within the 6-month bond period 
specified in paragraph (a)(2) of this section, the importer of record 
must inform Customs in writing of that fact within 30 calendar days 
after the date of exportation. The bond posted with Customs will be 
returned to the importer of record and no entry completion and duty 
payment will be required. The exported vessel will be precluded from 
reentry under the terms of paragraph (a) of this section for a period of 
3 months after the date of exportation.
    (c) Sale within 6-month period. If the sale of a vessel for which 
entry completion and duty payment are deferred under paragraph (a) of 
this section is completed within the 6-month bond period specified in 
paragraph (a)(2) of this

[[Page 70]]

section, the importer of record within 15 calendar days after completion 
of the sale must complete the entry by filing an Entry Summary (Customs 
Form 7501) and must deposit the appropriate duty (calculated at the 
applicable rates provided for under subheading 8903.91.00 or 8903.92.00 
of the Harmonized Tariff Schedule of the United States and based upon 
the value of the vessel at the time of importation). Upon entry 
completion and deposit of duty under this paragraph, the bond posted 
with Customs will be returned to the importer of record.
    (d) Expiration of bond period. If the 6-month bond period specified 
in paragraph (a)(2) of this section expires without either the completed 
sale or the exportation of a vessel for which entry completion and duty 
payment are deferred under paragraph (a) of this section, the importer 
of record within 15 calendar days after expiration of that 6-month 
period must complete the entry by filing an Entry Summary (Customs Form 
7501) and must deposit the appropriate duty (calculated at the 
applicable rates provided for under subheading 8903.91.00 or 8903.92.00 
of the Harmonized Tariff Schedule of the United States and based upon 
the value of the vessel at the time of importation). Upon entry 
completion and deposit of duty under this paragraph, the bond posted 
with Customs will be returned to the importer of record, and a new bond 
on Customs Form 301, containing the bond conditions set forth in 
Sec. 113.62 of this chapter, may be required by the appropriate port 
director.

[68 FR 13625, Mar. 20, 2003]



Sec. 4.95  Records of entry and clearance of vessels.

    Permanent records shall be prepared at each customhouse of all 
entries of vessels on Customs Form 1400 and of all clearances and 
permits to proceed on Customs Form 1401. Whenever a vessel is diverted, 
as provided for in Sec. 4.91 (a) or (b), Customs Form 1401 shall be 
amended to show the new destination. These records shall be open to 
public inspection.

[T.D. 82-224, 47 FR 53727, Nov. 29, 1982]



Sec. 4.96  Fisheries.

    (a) As used in this section:
    (1) The term ``convention vessel'' means a Canadian fishing vessel 
which, at the time of its arrival in the United States, is engaged only 
in the North Pacific halibut fishery and which is therefore entitled to 
the privileges provided for by the Halibut Fishing Vessels Convention 
between the United States and Canada signed at Ottawa, Canada, on March 
24, 1950 (T.D. 52862);
    (2) The term ``nonconvention fishing vessel'' means any vessel other 
than a convention vessel which is employed in whole or in part in 
fishing at the time of its arrival in the United States and
    (i) Which is documented under the laws of a foreign county,
    (ii) Which is undocumented, of 5 net tons or over, and owned in 
whole or in part by a person other than a citizen of the United States, 
or
    (iii) Which is undocumented, of less than 5 net tons, and owned in 
whole or in part by a person who is neither a citizen nor a resident of 
the United States;
    (3) The term ``nonconvention cargo vessel'' means any vessel which 
is not employed in fishing at the time of its arrival in the United 
States, but which is engaged in whole or in part in the transportation 
of fish or fish products \131a\ and
---------------------------------------------------------------------------

    \131a\ Except as otherwise provided by treaty or convention to which 
the United States is a party, no foreign-flag vessel shall, whether 
documented as a cargo vessel or otherwise, land in a port of the United 
States its catch of fish taken on board such vessels on the high seas or 
fish products processed therefrom, or any fish or fish products taken on 
board such vessel on the high seas from a vessel engaged in fishing 
operations or in the processing of fish or fish products.'' (46 U.S.C. 
251)
    \132\ [Reserved]
---------------------------------------------------------------------------

    (i) Which is documented under the laws of a foreign country or
    (ii) Which is undocumented and owned by a person other than a 
citizen of the United States;
    (4) The term ``treaty vessel'' means a Canadian fishing vessel which 
at the time of its arrival in the United States is engaged in the 
albacore tuna fishery and which is therefore entitled to the privileges 
provided for by the treaty

[[Page 71]]

with Canada on Pacific Coast Albacore Tuna Vessels and Port Privileges, 
entered into force at Ottawa, Canada, on July 29, 1981 (T.D. 81-227); 
and
    (5) The term ``fishing'' means the planting, cultivation, or taking 
of fish, shell fish, marine animals, pearls, shells, or marine 
vegetation, or the transportation of any of those marine products to the 
United States by the taking vessel or another vessel under the complete 
control and management of a common owner or bareboat charterer.
    (b) Except as otherwise provided by treaty or convention to which 
the United States is a party (see paragraphs (d) and (g) of this 
section), no foreign-flag vessel shall, whether documented as a cargo 
vessel or otherwise, land in a port of the United States its catch of 
fish taken on board such vessel on the high seas or fish products 
processed therefrom, or any fish or fish products taken on board such 
vessel on the high seas from a vessel engaged in fishing operations or 
in the processing of fish or fish products. (46 U.S.C. 251). This 
prohibition applies regardless of the intended ultimate disposition of 
the fish or fish products (e.g., it applies to transshipments from the 
foreign vessel to another vessel in United States territorial waters; it 
applies to landing for transshipment in bond to Canada or Mexico; it 
applies to landing for exportation under bond; and it applies to landing 
in a Foreign Trade Zone). However, the prohibition is limited to fish, 
or fish products processed therefrom, taken on board the foreign vessel 
on the high seas.
    (c) A vessel of the United States to be employed in the fisheries 
must have a Certificate of Documentation endorsed with a fishery 
license. ``Fisheries'' includes processing, storing, transporting 
(except in foreign commerce), planting, cultivating, catching, taking, 
or harvesting fish, shellfish, marine animals, pearls, shells, or marine 
vegetation in the navigable waters of the United States or the exclusive 
economic zone.
    (d) A convention vessel may come into a port of entry on the Pacific 
coast of the United States, including Alaska, to land its catch of 
halibut and incidentally-caught sable fish, or to secure supplies, 
equipment, or repairs. Such a vessel may come into any other port of 
entry or, if properly authorized to do so under Sec. 101.4(b) of this 
chapter, into any place other than a port of entry, for the purpose of 
securing supplies, equipment, or repairs only, but shall not land its 
catch. A convention vessel which comes into the United States as 
provided for in this paragraph shall comply with the usual requirements 
applicable to foreign vessels arriving at and departing from ports of 
the United States.
    (e) A nonconvention fishing vessel, other than a treaty vessel, may 
come into a port of entry in the United States or, if granted permission 
under Sec. 101.4(b) of this chapter, into a place other than a port of 
entry for the purpose of securing supplies, equipment, or repairs, but 
shall not land its catch. A nonconvention fishing vessel which comes 
into the United States as provided for in this paragraph shall comply 
with the usual requirements applicable to foreign vessels arriving at 
and departing from ports of the United States.
    (f) A nonconvention cargo vessel, although not prohibited by law 
from coming into the United States, shall not be permitted to land in 
the United States its catch of fish taken on the high seas or any fish 
or fish products taken on board on the high seas from a vessel employed 
in fishing or in the processing of fish or fish products, but may land 
fish taken on board at any place other than the high seas upon 
compliance with the usual requirements. Before any such fish may be 
landed the master shall satisfy the port director that the fish were not 
taken on board on the high seas by presenting declarations of the master 
and two or more officers or members of the crew of the vessel, of whom 
the person next in authority to the master shall be one, or other 
evidence acceptable to the port director which establishes the place of 
lading to his satisfaction.
    (g) A treaty vessel may come into a port or place of the United 
States named in Annex B of the Treaty with Canada on Pacific Coast 
Albacore Tuna Vessels and Port Privileges to land its catch of albacore 
tuna, or to secure fuel, supplies, equipment and repairs. Such a vessel 
may come into any other

[[Page 72]]

port of entry or, if properly authorized to do so under Sec. 101.4(b) 
of this chapter, into any place other than a port of entry, for the 
purpose of securing supplies, equipment, or repairs only, but shall not 
land its catch. A treaty vessel which comes into the United States as 
provided for in this paragraph shall comply with the usual requirements 
applicable to foreign vessels arriving at and departing from ports of 
the United States.
    (h) A convention vessel, a nonconvention fishing vessel, a 
nonconvention cargo vessel, or a treaty vessel, which arrives in the 
United States in distress shall be subject to the usual requirements 
applicable to foreign vessels arriving in distress. While in the United 
States, supplies, equipment, or repairs may be secured, but, except as 
specified in the next sentence, fish shall not be landed unless the 
vessel's master, or other authorized representative of the owner, shows 
to the satisfaction of the port director that it will not be possible, 
by the exercise of due diligence, for the vessel to transport its catch 
to a foreign port without spoilage, in which event the port director may 
allow the vessel upon compliance with all applicable requirements, to 
land, transship, or otherwise dispose of its catch. Nothing herein shall 
prevent, upon compliance with normal Customs procedures, a convention 
vessel arriving in distress from landing its catch of halibut and 
incidentally-caught sable fish at a port of entry on the Pacific coast, 
including Alaska; a foreign cargo vessel arriving in distress from 
landing its cargo of fish taken on board at any place not on the high 
seas; or a treaty vessel arriving in distress from landing its catch of 
albacore tuna at a port of entry on the Pacific coast, including Alaska.

[T.D. 82-144, 47 FR 35182, Aug. 13, 1982, as amended by T.D. 83-214, 48 
FR 46513, Oct. 13, 1983; T.D. 83-214, 48 FR 50075, Oct. 31, 1983; T.D. 
93-12, 58 FR 13197, Mar. 10, 1993]



Sec. 4.97  Salvage vessels.

    (a) Only a vessel of the United States, a numbered motorboat owned 
by a citizen, or a vessel operating within the purview of paragraph (d) 
or (e) of this section, shall engage in any salvage operation in 
territorial waters of the United States unless an application addressed 
to the Commissioner of Customs to use another specified vessel in a 
completely described operation has been granted. \133\
---------------------------------------------------------------------------

    \133\ ``No foreign vessel shall, under penalty of forfeiture, engage 
in salvaging operations on the Atlantic or Pacific coast of the United 
States, in any portion of the Great Lakes or their connecting or 
tributary waters, including any portion of the Saint Lawrence River 
through which the international boundary line extends, or in territorial 
waters of the United States on the Gulf of Mexico, except when 
authorized by a treaty or in accordance with the provisions of section 
725 of this title: Provided, however, That if, on investigation, the 
Secretary of the Treasury is satisfied that no suitable vessel wholly 
owned by a person who is a citizen of the United States and documented 
under the laws of the United States or numbered pursuant to section 288 
of this title, is available in any particular locality he may authorize 
the use of a foreign vessel or vessels in salvaging operations in that 
locality and no penalty shall be incurred for such authorized use.'' (46 
U.S.C. 316(d))
    ``Nothing in this section shall be held or construed to prohibit or 
restrict any assistance to vessels or salvage operations authorized by 
Article II of the treaty between the United States and Great Britain 
`concerning reciprocal rights for United States and Canada in the 
conveyance of prisoners and wrecking and salvage' signed at Washington, 
May 18, 1908 (35 Stat. 2036), or by the treaty between the United States 
and Mexico `to facilitate assistance to and salvage of vessels in 
territorial waters,' signed at Mexico City, June 13, 1935 (49 Stat. 
3359).'' (46 U.S.C. 316(e))
---------------------------------------------------------------------------

    (b) Upon receipt of such an application, the Commissioner of Customs 
will cause an investigation to be made immediately to determine whether 
a suitable vessel of the United States or a suitable numbered motorboat 
owned by a citizen is available for the operation. If he finds that no 
such vessel is available and that the facts otherwise warrant favorable 
action, he will grant the application.
    (c) If the application is granted, the applicant shall make a full 
report of the operation as soon as possible to the director of the port 
nearest the place where the operation was conducted.
    (d) A Canadian vessel may engage in salvage operations on any vessel 
in any territorial waters of the United States in which Canadian vessels 
are permitted to conduct such operations by

[[Page 73]]

article II of the treaty between the United States and Great Britain 
signed on May 18, 1908, \134\ or by section 725, title 46, United States 
Code. \135\ If any such vessel engages in a salvage operation in 
territorial waters of the United States, the owner or master of the 
vessel shall make a full report of the operation as soon as possible to 
the director of the port nearest the place where the operation was 
conducted.
---------------------------------------------------------------------------

    \134\ ``The High Contracting Parties agree that vessels and wrecking 
appliances, either from the United States or from the Dominion of 
Canada, may salve any property wrecked and may render aid and assistance 
to any vessels wrecked, disabled or in distress in the waters or on the 
shores of the other country in that portion of the St. Lawrence River 
through which the International Boundary line extends, and, in Lake 
Ontario, Lake Erie, Lake St. Clair, Lake Huron, and Lake Superior, and 
in the Rivers Niagara, Detroit, St. Clair, and Ste. Marie, and the 
Canals at Sault Ste. Marie, and on the shores and in the waters of the 
other country along the Atlantic and Pacific Coasts within a distance of 
thirty miles from the International Boundary on such Coasts.
    ``It is further agreed that such reciprocal wrecking and salvage 
privileges shall include all necessary towing incident thereto, and that 
nothing in the Customs, Coasting or other laws or regulations of either 
country shall restrict in any manner the salving operations of such 
vessels or wrecking appliances.
    ``Vessels from either country employed in salving in the waters of 
the other shall, as soon as practicable afterwards, make full report at 
the nearest custom house of the country in whose waters such salving 
takes place.'' (35 Stat. 2036)
    \135\ ``Canadian vessels and wrecking appurtenance may render aid 
and assistance to Canadian or other vessels and property wrecked, 
disabled, or in distress in the waters of the United States contiguous 
to the Dominion of Canada.
    ``This section shall be construed to apply to the canal and 
improvement of the waters between Lake Erie and Lake Huron, and to the 
waters of the Saint Mary's River and Canal: * * *.'' (46 U.S.C. 725)
    The waters of Lake Michigan are not contiguous to the Dominion of 
Canada within the meaning of this statute.
---------------------------------------------------------------------------

    (e) A Mexican vessel may engage in a salvage operation on a Mexican 
vessel in any territorial waters of the United States in which Mexican 
vessels are permitted to conduct such operations by the treaty between 
the United States and Mexico signed on June 13, 1935. \136\
---------------------------------------------------------------------------

    \136\ ``The High Contracting Parties agree that vessels and rescue 
apparatus, public or private, of either country, may aid or assist 
vessels of their own nationality, including the passengers and crews 
thereof, which may be disabled or in distress on the shores or within 
the territorial waters of the other country within a radius of seven 
hundred and twenty nautical miles of the intersection of the 
International Boundary Line and the coast of the Pacific Ocean, or 
within a radius of two hundred nautical miles of the intersection of the 
International Boundary Line and the coast of the Gulf of Mexico.'' (49 
Stat. 3360)

[28 FR 14596, Dec. 31, 1963, as amended by T.D. 69-266, 34 FR 20423, 
Dec. 31, 1969]



Sec. 4.98  Navigation fees.

    (a)(1) The Customs Service shall publish a General Notice in the 
Federal Register and Customs Bulletin periodically, setting forth a 
revised schedule of navigation fees for the following services:

                   Fee No. and description of services

1 Entry of vessel, including American, from foreign port:
    (a) Less than 100 net tons.
    (b) 100 net tons and over.
2 Clearance of vessel, including American, to foreign port:
    (a) Less than 100 net tons.
    (b) 100 net tons or over.
3 Issuing permit to foreign vessel to proceed from port to port, and 
          receiving manifest.
4 Receiving manifest of foreign vessel on arrival from another port, and 
          granting a permit to unlade.
5 Receiving post entry.
6 [Reserved]
7 Certifying payment of tonnage tax for foreign vessels only.
8 Furnishing copy of official document, including certified outward 
          foreign manifest, and others not elsewhere enumerated.


The published revised fee schedule shall remain in effect until changed.
    (2) The fees shall be calculated in accordance with Sec. 24.17(d) 
Customs Regulations (19 CFR 24.17(d)), and be based upon the amount of 
time the average service requires of a Customs officer in the fifth step 
of GS-9.
    (3) The party requesting a vessel service described in paragraph 
(a)(1) of

[[Page 74]]

this section for which reimbursable overtime compensation is payable 
under 19 U.S.C. 267 or 19 U.S.C. 1451 and Sec. 24.16 of this chapter 
shall pay only the applicable overtime charge, and not both the overtime 
charge and the fee specified in the fee schedule.
    (4) The revised fee schedule shall be made available to the public 
in Customs offices.
    (5) The respective fees shall be designated in correspondence and 
reports by the applicable fee number.
    (b) Fee 1 shall be collected at the first port of entry only. It 
shall not be collected from a vessel entering directly from a port in 
noncontiguous territory of the United States nor from one entering at a 
port on a northern, northeastern, or northwestern frontier otherwise 
than by sea.
    (c) Fee 2 shall be collected at the final port of departure from the 
United States. It shall be collected from a yacht or public vessel which 
obtains a clearance, but shall not be collected from a vessel clearing 
directly for a port in noncontiguous territory of the United States nor 
from one clearing from a port on the northern, northeastern, or 
northwestern frontier otherwise than by sea. It shall be collected only 
upon the first clearance each year of a vessel making regular daily 
trips between a port of the United States and a port in Canada wholly 
upon interior waters not navigable to the ocean.
    (d) Fee 3 shall be collected for granting a permit to a foreign 
vessel to proceed to another Customs port. It shall be collected from a 
foreign vessel clearing directly for a port in noncontiguous territory 
of the United States outside its Customs territory. This fee shall not 
be collected in the case of a foreign vessel proceeding on a voyage by 
sea from one port in the United States to another port via a foreign 
port. Only one fee shall be collected in case of simultaneous vessel 
transactions.
    (e) Fee 4 shall be collected for receiving the manifest of a foreign 
vessel arriving from another Customs port. It shall be collected from a 
foreign vessel entering directly from a port in noncontiguous territory 
of the United States outside its Customs territory. This fee shall not 
be collected in the case of a foreign vessel which arrives at one port 
in the United States from another port on a voyage by sea via a foreign 
port. Only one fee shall be collected in the case of simultaneous vessel 
transactions.
    (e-1) Fee 5 shall be collected from a foreign or American vessel at 
each port where the vessel is required to file a post entry in 
accordance with the provisions of Sec. 4.12(a)(3). An original post 
entry may be supplemented by additional post entries in instances where 
items were omitted from the original post entry. A separate fee shall be 
collected for each supplemental post entry made to the original post 
entry.
    (f) [Reserved]
    (g) Fee 7 shall be collected from foreign vessels only.
    (h) Fee 8 shall be collected for each copy of any official document, 
whether certified or not, furnished to any person other than a 
Government officer.
    (i) Private and commercial vessels, and passengers aboard commercial 
vessels, may be subject to the payment of fees for services provided in 
connection with their arrival as set forth in Sec. 24.22 of this 
chapter.
    (j) The loading or unloading of merchandise or passengers from a 
commercial vessel at a U.S. port may cause the harbor maintenance fee 
set forth in Sec. 24.24 of this chapter to be assessed.

[T.D. 69-266, 34 FR 20423, Dec. 31, 1969, as amended by T.D. 74-194, 39 
FR 26153, July 17, 1974; T.D. 80-25, 45 FR 3572, Jan. 18, 1980; T.D. 82-
224, 47 FR 53727, Nov. 29, 1982; T.D. 84-149, 49 FR 28698, July 16, 
1984; T.D. 86-109, 51 FR 21155, June 11, 1986; T.D. 87-44, 52 FR 10211, 
Mar. 30, 1987; T.D. 93-85, 58 FR 54282, Oct. 21, 1993]



Sec. 4.99  Forms; substitution.

    (a) Customs Forms 1300, 1302, 1302-A, 1303, and 1304 printed by 
private parties or foreign governments shall be accepted provided the 
forms so printed:
    (1) Conform to the official Customs forms in wording arrangement, 
style, size of type, and paper specifications;
    (2) Conform to the official Customs forms in size, except that:
    (i) Each form may be printed on metric A4 size paper, 210 by 297 
millimeters (approximately 8\1/4\ by 11\2/3\ inches).
    (ii) The vertical format of Customs Forms 1300, 1302-A, 1303, and 
1304 may

[[Page 75]]

be increased in size up to a maximum of 14 inches.
    (iii) Customs Form 1302 may be reduced in size to not less than 
either 8\1/2\ by 11 inches or 210 by 297 millimeters (metric A4 size). 
If Customs Form 1302 is reduced in size, the size of type used may be 
reduced proportionately.
    (b) If instructions are printed on the reverse side of the official 
Customs form, the instructions may be omitted from the privately printed 
forms, but the instructions shall be followed.
    (c) The port director, in his discretion, may accept a computer 
printout instead of Customs Form 1302 for use at a specific port. 
However, to ensure that computer printouts may be used at all ports, the 
private party or foreign government first must obtain specific approval 
from Headquarters, U.S. Customs Service.
    (d) Forms which do not comply with the requirements of this section 
are not acceptable without the specific approval of the Commissioner of 
Customs.

[T.D. 79-255, 44 FR 57088, Oct. 4, 1979; T.D. 00-22, 65 FR 16517, Mar. 
29, 2000]



Sec. 4.100  Licensing of vessels of less than 30 net tons.

    (a) The application for a license to import merchandise in a vessel 
of less than 30 net tons in accordance with section 6, Anti-Smuggling 
Act of August 5, 1935, shall be addressed to the Secretary of the 
Treasury and delivered to the directors of the ports where foreign 
merchandise is to be imported in such vessel.
    (b) The application shall contain the following information:
    (1) Name of the vessel, rig, motive power, and home port.
    (2) Name and address of the owner.
    (3) Name and address of the master.
    (4) Net tonnage of the vessel.
    (5) Kind of merchandise to be imported.
    (6) Country or countries of exportation.
    (7) Ports of the United States where the merchandise will be 
imported.
    (8) Whether the vessel will be used to transport and import 
merchandise from a hovering vessel.
    (9) Kind of document under which the vessel is operating.
    (c) If the port director finds that the applicant is a reputable 
person and that the revenue would not be jeopardized by the issuance of 
a license, he may issue the license for a period not to exceed 12 
months, incorporating therein any special conditions he believes to be 
necessary or desirable, and deliver it to the licensee.
    (d) The master or owner shall keep the license on board the vessel 
at all times and exhibit it upon demand of any duly authorized officer 
of the United States. This license is personal to the licensee and is 
not transferable.
    (e) The Secretary of the Treasury or the port director at whose 
office the license was issued may revoke the license if any of its terms 
have been willfully or intentionally violated or for any other cause 
which may be considered prejudicial to the revenue or otherwise against 
the interest of the United States.

[T.D. 72-211, 37 FR 16486, Aug. 15, 1972]



Sec. 4.101  Prohibitions against Customs officers and employees.

    No Customs officer or employee shall:
    (a) Own, in whole or in part, any vessel except a yacht or other 
pleasure boat;
    (b) Act as agent, attorney, or consignee for the owner or owners of 
any vessel, or of any cargo or lading on board the vessel; or
    (c) Import or be concerned directly or indirectly in the importation 
of any merchandise for sale into the United States

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



PART 7_CUSTOMS RELATIONS WITH INSULAR POSSESSIONS AND GUANTANAMO BAY 
NAVAL STATION--Table of Contents




Sec.
7.1 Puerto Rico; spirits and wines withdrawn from warehouse for shipment 
          to; duty on foreign-grown coffee.
7.2 Insular possessions of the United States other than Puerto Rico.
7.3 Duty-free treatment of goods imported from insular possessions of 
          the United States other than Puerto Rico.
7.4 Watches and watch movements from U.S. insular possessions.

[[Page 76]]

7.11 Guantanamo Bay Naval Station.

    Authority: 19 U.S.C. 66, 1202 (General Note 23, Harmonized Tariff 
Schedule of the United States), 1623, 1624; 48 U.S.C. 1406i.



Sec. 7.1  Puerto Rico; spirits and wines withdrawn from warehouse for 
shipment to; duty on foreign-grown coffee.

    (a) When spirits and wines are withdrawn from a bonded manufacturing 
warehouse for shipment in bond to Puerto Rico pursuant to section 311, 
Tariff Act of 1930, as amended,\1 2\ the warehouse withdrawal shall 
contain on the face thereof a statement of the kind and quantity of all 
imported merchandise (in its condition as imported) and imported 
containers used in the manufacture and putting up of such spirits and 
wines. The duty assessed on the imported merchandise and containers so 
used, and their classification and value, shall be shown on the 
withdrawal in accordance with Sec. 144.41 of this chapter. If no 
imported merchandise or containers have been used, the warehouse 
withdrawal shall bear an endorsement to that effect. (See Sec. Sec. 
191.105 and 191.106 of this chapter.)
---------------------------------------------------------------------------

    \1\ [Reserved]
    \2\ ``* * * Distilled spirits and wines which are rectified in 
bonded manufacturing warehouses, class six, and distilled spirits which 
are reduced in proof and bottled in such warehouses, shall be deemed to 
have been manufactured within the meaning of this section and may be 
withdrawn as hereinbefore provided, and likewise for shipment in bond to 
Puerto Rico, subject to the provisions of this section, and under such 
regulations as the Secretary of the Treasury may prescribe, there to be 
withdrawn for consumption or be rewarehoused and subsequently withdrawn 
for consumption: Provided, That upon withdrawal in Puerto Rico for 
consumption, the duties imposed by the customs laws of the United States 
shall be collected on all imported merchandise (in its condition as 
imported) and imported containers used in the manufacture and putting up 
of such spirits and wines in such warehouses: Provided further, That no 
internal-revenue tax shall be imposed on distilled spirits and wines 
rectified in class six warehouses if such distilled spirits and wines 
are exported or shipped in accordance with the provisions of this 
section, * * *.'' (Tariff Act of 1930, sec. 311, as amended; 19 U.S.C. 
1311)
---------------------------------------------------------------------------

    (b) The spirits and wines shall be forwarded in accordance with the 
general provisions of the regulations governing the transportation of 
merchandise in bond, part 18 of this chapter.
    (c) A regular entry shall be made for all foreign-grown coffee 
shipped to Puerto Rico from the United States, but special Customs 
invoices shall not be required for such shipments. \3\
---------------------------------------------------------------------------

    \3\ Section 319, Tariff Act of 1930, authorizes the Legislature of 
Puerto Rico to impose a duty on coffee imported into Puerto Rico, 
including coffee grown in a foreign country coming into Puerto Rico from 
the United States, and the Legislature of Puerto Rico has imposed such a 
duty.

(Secs. 311, 319, 484(a), 46 Stat. 691, as amended, 696, 722, as amended; 
19 U.S.C. 1311, 1319, 1484(a); R.S. 251, as amended, sec. 624, 46 Stat. 
---------------------------------------------------------------------------
759 (19 U.S.C. 66, 1624))

[28 FR 14636, Dec. 31, 1963, as amended by T.D. 73-175, 38 FR 17445, 
July 2, 1973; T.D. 83-212, 48 FR 46770, Oct. 14, 1983; T.D. 98--16, 63 
FR 11004, Mar. 5, 1998]



Sec. 7.2  Insular possessions of the United States other than Puerto 
Rico.

    (a) Insular possessions of the United States other than Puerto Rico 
are also American territory but, because those insular possessions are 
outside the customs territory of the United States, goods imported 
therefrom are subject to the rates of duty set forth in column 1 of the 
Harmonized Tariff Schedule of the United States (HTSUS) except as 
otherwise provided in Sec. 7.3 or in part 148 of this chapter. The 
principal such insular possessions are the U.S. Virgin Islands, Guam, 
American Samoa, Wake Island, Midway Islands, and Johnston Atoll. 
Pursuant to section 603(c) of the Covenant to Establish a Commonwealth 
of the Northern Mariana Islands in Political Union With the United 
States of America, Public Law 94-241, 90 Stat. 263, 270, goods imported 
from the Commonwealth of the Northern Mariana Islands are entitled to 
the same tariff treatment as imports from Guam and thus are also subject 
to the provisions of Sec. 7.3 and of part 148 of this chapter.
    (b) Importations into Guam, American Samoa, Wake Island, Midway 
Islands, Johnston Atoll, and the Commonwealth of the Northern Mariana 
Islands are not governed by the Tariff Act of 1930, as amended, or the 
regulations contained in this chapter. The

[[Page 77]]

customs administration of Guam is under the Government of Guam. The 
customs administration of American Samoa is under the Government of 
American Samoa. The customs administration of Wake Island is under the 
jurisdiction of the Department of the Air Force (General Counsel). The 
customs administration of Midway Islands is under the jurisdiction of 
the Department of the Navy. There is no customs authority on Johnston 
Atoll, which is under the operational control of the Defense Nuclear 
Agency. The customs administration of the Commonwealth of the Northern 
Mariana Islands is under the Government of the Commonwealth.
    (c) The Secretary of the Treasury administers the customs laws of 
the U.S. Virgin Islands through the United States Customs Service. The 
importation of goods into the U.S. Virgin Islands is governed by Virgin 
Islands law; however, in situations where there is no applicable Virgin 
Islands law or no U.S. law specifically made applicable to the Virgin 
Islands, U.S. laws and regulations shall be used as a guide and be 
complied with as nearly as possible. Tariff classification of, and rates 
of duty applicable to, goods imported into the U.S. Virgin Islands are 
established by the Virgin Islands legislature.

[T.D. 97-75, 62 FR 46439, Sept. 3, 1997]



Sec. 7.3  Duty-free treatment of goods imported from insular possessions 
of the United States other than Puerto Rico.

    (a) General. Under the provisions of General Note 3(a)(iv), 
Harmonized Tariff Schedule of the United States (HTSUS), the following 
goods may be eligible for duty-free treatment when imported into the 
customs territory of the United States from an insular possession of the 
United States:
    (1) Except as provided in Additional U.S. Note 5 to Chapter 91, 
HTSUS, and except as provided in Additional U.S. Note 2 to Chapter 96, 
HTSUS, and except as provided in section 423 of the Tax Reform Act of 
1986, as amended (19 U.S.C. 2703 note), goods which are the growth or 
product of any such insular possession, and goods which were 
manufactured or produced in any such insular possession from materials 
that were the growth, product or manufacture of any such insular 
possession or of the customs territory of the United States, or of both, 
provided that such goods:
    (i) Do not contain foreign materials valued at either more than 70 
percent of the total value of the goods or, in the case of goods 
described in section 213(b) of the Caribbean Basin Economic Recovery Act 
(19 U.S.C. 2703(b)), more than 50 percent of the total value of the 
goods; and
    (ii) Come to the customs territory of the United States directly 
from any such insular possession; and
    (2) Goods previously imported into the customs territory of the 
United States with payment of all applicable duties and taxes imposed 
upon or by reason of importation, provided that:
    (i) The goods were shipped from the United States directly to the 
insular possession and are returned from the insular possession to the 
United States by direct shipment; and
    (ii) There was no remission, refund or drawback of such duties or 
taxes in connection with the shipment of the goods from the United 
States to the insular possession.
    (b) Origin of goods. For purposes of this section, goods shall be 
considered to be the growth or product of, or manufactured or produced 
in, an insular possession if:
    (1) The goods are wholly the growth or product of the insular 
possession; or
    (2) The goods became a new and different article of commerce as a 
result of production or manufacture performed in the insular possession.
    (c) Foreign materials. For purposes of this section, the term 
``foreign materials'' covers any material incorporated in goods 
described in paragraph (b)(2) of this section other than:
    (1) A material which was wholly the growth or product of an insular 
possession or of the customs territory of the United States;
    (2) A material which was substantially transformed in an insular 
possession or in the customs territory of the United States into a new 
and different article of commerce which was then used in an insular 
possession in the production or manufacture of a new and different 
article which is shipped directly to the United States; or

[[Page 78]]

    (3) A material which may be imported into the customs territory of 
the United States from a foreign country and entered free of duty 
either:
    (i) At the time the goods which incorporate the material are 
entered; or
    (ii) At the time the material is imported into the insular 
possession, provided that the material was incorporated into the goods 
during the 18-month period after the date on which the material was 
imported into the insular possession.
    (d) Foreign materials value limitation. For purposes of this 
section, the determination of whether goods contain foreign materials 
valued at more than 70 or 50 percent of the total value of the goods 
shall be made based on a comparison between:
    (1) The landed cost of the foreign materials, consisting of:
    (i) The manufacturer's actual cost for the materials or, where a 
material is provided to the manufacturer without charge or at less than 
fair market value, the sum of all expenses incurred in the growth, 
production, or manufacture of the material, including general expenses, 
plus an amount for profit; and
    (ii) The cost of transporting those materials to the insular 
possession, but excluding any duties or taxes assessed on the materials 
by the insular possession and any charges which may accrue after 
landing; and
    (2) The final appraised value of the goods imported into the customs 
territory of the United States, as determined in accordance with section 
402 of the Tariff Act of 1930, as amended (19 U.S.C. 1401a).
    (e) Direct shipment--(1) General. For purposes of this section, 
goods shall be considered to come to the United States directly from an 
insular possession, or to be shipped from the United States directly to 
an insular possession and returned from the insular possession to the 
United States by direct shipment, only if:
    (i) The goods proceed directly to or from the insular possession 
without passing through any foreign territory or country;
    (ii) The goods proceed to or from the insular possession through a 
foreign territory or country, the goods do not enter into the commerce 
of the foreign territory or country while en route to the insular 
possession or the United States, and the invoices, bills of lading, and 
other shipping documents show the insular possession or the United 
States as the final destination; or
    (iii) The goods proceed to or from the insular possession through a 
foreign territory or country, the invoices and other shipping documents 
do not show the insular possession or the United States as the final 
destination, and the goods:
    (A) Remained under the control of the customs authority of the 
foreign territory or country;
    (B) Did not enter into the commerce of the foreign territory or 
country except for the purpose of sale other than at retail, and the 
port director is satisfied that the importation into the insular 
possession or the United States results from the original commercial 
transaction between the importer and the producer or the latter's sales 
agent; and
    (C) Were not subjected to operations in the foreign territory or 
country other than loading and unloading and other activities necessary 
to preserve the goods in good condition.
    (2) Evidence of direct shipment. The port director may require that 
appropriate shipping papers, invoices, or other documents be submitted 
within 60 days of the date of entry as evidence that the goods were 
shipped to the United States directly from an insular possession or 
shipped from the United States directly to an insular possession and 
returned from the insular possession to the United States by direct 
shipment within the meaning of paragraph (e)(1) of this section, and 
such evidence of direct shipment shall be subject to such verification 
as deemed necessary by the port director. Evidence of direct shipment 
shall not be required when the port director is otherwise satisfied, 
taking into consideration the kind and value of the merchandise, that 
the goods qualify for duty-free treatment under General Note 3(a)(iv), 
HTSUS, and paragraph (a) of this section.
    (f) Documentation. (1) When goods are sought to be admitted free of 
duty as

[[Page 79]]

provided in paragraph (a)(1) of this section, there shall be filed with 
the entry/entry summary a properly completed certificate of origin on 
Customs Form 3229, signed by the chief or assistant chief customs 
officer or other official responsible for customs administration at the 
port of shipment, showing that the goods comply with the requirements 
for duty-free entry set forth in paragraph (a)(1) of this section. 
Except in the case of goods which incorporate a material described in 
paragraph (c)(3)(ii) of this section, a certificate of origin shall not 
be required for any shipment eligible for informal entry under Sec. 
143.21 of this chapter or in any case where the port director is 
otherwise satisfied that the goods qualify for duty-free treatment under 
paragraph (a)(1) of this section.
    (2) When goods in a shipment not eligible for informal entry under 
Sec. 143.21 of this chapter are sought to be admitted free of duty as 
provided in paragraph (a)(2) of this section, the following declarations 
shall be filed with the entry/entry summary unless the port director is 
satisfied by reason of the nature of the goods or otherwise that the 
goods qualify for such duty-free entry:
    (i) A declaration by the shipper in the insular possession in 
substantially the following form:

    I, -------------------- (name) of -------------------- 
(organization) do hereby declare that to the best of my knowledge and 
belief the goods identified below were sent directly from the United 
States on ------------, 19----, to -------------------- (name) of ------
-------------- (organization) on -------------------- (insular 
possession) via the -------------------- (name of carrier) and that the 
goods remained in said insular possession until shipped by me directly 
to the United States via the -------------------- (name of carrier) on 
------------, 19----.

----------------------------------------------------------------------------------------------------------------
                 Marks                      Numbers        Quantity            Description             Value
----------------------------------------------------------------------------------------------------------------
 
 
 
 
 
 
----------------------------------------------------------------------------------------------------------------

    Dated at ----------------, this -------- day of ------------, 19--
--.
Signature:______________________________________________________________

    (ii) A declaration by the importer in the United States in 
substantially the following form:

    I, -------------------- (name), of -------------------- 
(organization) declare that the (above) (attached) declaration by the 
shipper in the insular possession is true and correct to the best of my 
knowledge and belief, that the goods in question were previously 
imported into the customs territory of the United States and were 
shipped to the insular possession from the United States without 
remission, refund or drawback of any duties or taxes paid in connection 
with that prior importation, and that the goods arrived in the United 
States directly from the insular possession via the -------------------- 
(name of carrier) on ------------, 19----.

________________________________________________________________________
(Date)

________________________________________________________________________
(Signature)

    (g) Warehouse withdrawals; drawback. Merchandise may be withdrawn 
from a bonded warehouse under section 557 of the Tariff Act of 1930, as 
amended (19 U.S.C. 1557), for shipment to any insular possession of the 
United States other than Puerto Rico without payment of duty, or with a 
refund of duty if the duties have been paid, in like manner as for 
exportation to foreign countries. No drawback may be allowed under 
section 313 of the Tariff Act of 1930, as amended (19 U.S.C. 1313), on 
goods manufactured or produced in the United States and shipped to any 
insular possession. No drawback of internal-revenue tax is allowable 
under 19 U.S.C. 1313 on goods manufactured or produced in the United 
States with the use of domestic tax-paid alcohol and shipped to Wake 
Island, Midway Islands or Johnston Atoll.

[T.D. 97-75, 62 FR 46439, Sept. 3, 1997]

[[Page 80]]



Sec. 7.4  Watches and watch movements from U.S. insular possessions.

    (a) The issuance of an International Trade Administration Form ITA-
360, Certificate of Entitlement to Secure the Refund of Duties on 
Watches and Watch Movements, by the Department of Commerce, authorizes a 
producer of watches in the U.S. insular possessions to file requests 
with Customs for the refund of duties paid on imports of watches, watch 
movements (including solid state watches and watch movements), and watch 
parts (excepting separate watch cases and any articles containing any 
materials to which rates of duty set forth in Column 2, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202) apply). The amount 
of the refund requested may be up to the value specified in the 
certificate, provided that the articles for which refunds are requested 
were entered during a 3-year period beginning 2 years before the date of 
issuance of the Form ITA-360 certificate from the Department of 
Commerce.
    (b) The Form ITA-360 may not be used to secure refunds. To secure a 
refund, the party requesting the refund of duties (claimant) must 
present to Customs Form ITA-361, Request for Refund of Duties on Watches 
and Watch Movements, properly executed, and authenticated by the 
Department of Commerce.
    (c) By completing Form ITA-361, the insular producer may either:
    (1) Transfer its entitlement, in whole or in part, to any other 
party for any consideration agreed to by the insular producer and the 
transferee, or
    (2) Request the refund of duties to itself.
    (d) A claimant must file Form ITA-361 with Customs at the same port 
where the watch import entry was originally filed and duties paid. The 
documentation accompanying Form ITA-361 shall include a copy of the 
import entry, providing proof that duty was paid on the watches and 
watch movements.
    (e) When requesting the refund of duties on Form ITA-361, the 
claimant also must complete and submit to Customs the declaration on the 
form which reads as follows:

    I declare that the information given above is true and correct to 
the best of my knowledge and belief; that no notices of exportation of 
articles with benefit of drawback were filed upon exportation of this 
merchandise from the United States; that no liquidated refunds on the 
articles relating to the present claim have been paid; and that no 
protest or request for litigation for refund of duties paid and herewith 
claimed has been made.

    (f) A fee of 1 percent will be deducted from each refund request as 
reimbursement to salaries and expenses of those Customs personnel 
processing the request.
    (g) Form ITA-360 expires 1 year from its date of issuance. Any 
refund request on Form ITA-361 made by either the insular producer 
itself or any transferee named on Form ITA-360 must be filed within this 
1-year period. This expiration date applies equally to all refund 
requests, whether a single request for the entire amount specified in 
the Form ITA-361 certificate or multiple requests for partial amounts. 
Refund requests will be accepted until either the amount specified in 
the certificate is depleted or until the certificate expires 1 year from 
its date of issuance.
    (h) Customs will process only those refund requests made in 
accordance with the joint rules of the Departments of Commerce and the 
Interior governing the issuance and handling of certificates and the 
transfer of entitlements as contained in 15 CFR part 303.

[T.D. 84-16, 49 FR 1481, Jan. 12, 1984, as amended by T.D. 84-211, 49 FR 
39044, Oct. 3, 1984; T.D. 89-1, 53 FR 51252, Dec. 21, 1988. Redesignated 
and amended by T.D. 97-75, 62 FR 46441, Sept. 3, 1997]



Sec. 7.11  Guantanamo Bay Naval Station.

    Articles of foreign origin may enter the area (both land and water) 
of the Guantanamo Bay Naval Station free of duty, but such articles 
shall be subject to duty upon their subsequent entry into the United 
States.

[28 FR 14636, Dec. 31, 1963]

[[Page 81]]



PART 10_ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, ETC.
--Table of Contents




                      Subpart A_General Provisions

                     Articles Exported and Returned

Sec.
10.1 Domestic products; requirements on entry.
10.3 Drawback; internal-revenue tax.
10.4 Internal-revenue marks; erasure.
10.5 Shooks and staves; cloth boards; port director's account.
10.6 Shooks and staves; claim for duty exemption.
10.7 Substantial containers or holders.
10.8 Articles exported for repairs or alterations.
10.8a Imported articles exported and reimported.
10.9 Articles exported for processing.
10.10 [Reserved]

         Articles Assembled Abroad With United States Components

10.11 General.
10.12 Definitions.
10.13 Statutory provision: Subheading 9802.00.80, Harmonized Tariff 
          Schedule of the United States (19 U.S.C. 1202).
10.14 Fabricated components subject to the exemption.
10.15 Fabricated components not subject to the exemption.
10.16 Assembly abroad.
10.17 Valuation of exempted components.
10.18 Valuation of assembled articles.
10.19-10.20 [Reserved]
10.21 Updating cost data and other information.
10.23 Standards, quotas, and visas.
10.24 Documentation.
10.25 Textile components cut to shape in the United States and assembled 
          abroad.
10.26 Articles assembled or processed in a beneficiary country in whole 
          of U.S. components or ingredients; articles assembled in a 
          beneficiary country from textile components cut to shape in 
          the United States.

     Free Entry--Articles for the Use of Foreign Military Personnel

10.30c [Reserved]

                    Temporary Importations Under Bond

10.31 Entry; bond.
10.33 Theatrical effects.
10.35 Models of women's wearing apparel.
10.36 Commercial travelers' samples; professional equipment and tools of 
          trade; theatrical effects and other articles.
10.36a Vehicles, pleasure boats and aircraft brought in for repair or 
          alteration.
10.37 Extension of time for exportation.
10.38 Exportation.
10.39 Cancellation of bond charges.
10.40 Refund of cash deposits.

                          International Traffic

10.41 Instruments; exceptions.
10.41a Lift vans, cargo vans, shipping tanks, skids, pallets, and 
          similar instruments of international traffic; repair 
          components.
10.41b Clearance of serially numbered substantial holders or outer 
          containers.

                        Articles for Institutions

10.43 Duty-free status.
10.46 Articles for the United States.
10.47 [Reserved]

                              Works of Art

10.48 Engravings, sculptures, etc.
10.49 Articles for exhibition; requirements on entry.
10.50 [Reserved]
10.52 Painted, colored or stained glass windows for religious 
          institutions.
10.53 Antiques.
10.54 Gobelin and other hand-woven tapestries.

                             Vegetable Oils

10.56 Vegetable oils, denaturing; release.

                        Potatoes, Corn, or Maize

10.57 Certified seed potatoes, and seed corn or maize.

                             Bolting Cloths

10.58 Bolting cloths; marking.

            Withdrawal of Supplies and Equipment for Vessels

10.59 Exemption from customs duties and internal-revenue tax.
10.60 Forms of withdrawals; bond.
10.61 Withdrawal permit.
10.62 Bunker fuel oil.
10.62a Blanket withdrawals for certain merchandise.
10.62b Aircraft turbine fuel.
10.63 Landing of supplies and stores from receiving vessel in the United 
          States.
10.64 Crediting or cancellation of bonds.
10.64a [Reserved]
10.65 Cigars and cigarettes.

                 Articles Exported for Exhibition, Etc.

10.66 Articles exported for temporary exhibition and returned; horses 
          exported for horse racing and returned; procedure on entry.
10.67 Articles exported for scientific or educational purposes and 
          returned; procedure on entry.

[[Page 82]]

Theatrical Effects, Motion-Picture Films, Commercial Travelers' Samples, 
                           and Tools of Trade

10.68 Procedure.
10.69 Samples to Great Britain and Ireland under reciprocal agreement.

                            Animals and Birds

10.70 Purebred animals for breeding purposes; certificate.
10.71 Purebred animals; bond for production of evidence; deposit of 
          estimated duties; stipulation.
10.72-10.73 [Reserved]
10.74 Animals straying across boundary for pasturage; offspring.
10.75 Wild animals and birds; zoological collections.
10.76 Game animals and birds.
10.77 [Reserved]

                     Products of American Fisheries

10.78 Entry.
10.79 [Reserved]

                          Salt for Curing Fish

10.80 Remission of duty; withdrawal; bond.
10.81 Use in any port.
10.82 [Reserved]
10.83 Bond; cancellation; extension.

                           Automotive Products

10.84 Automotive vehicles and articles for use as original equipment in 
          the manufacture of automotive vehicles.

                   Master Records, and Metal Matrices

10.90 Master records and metal matrices.

                               Prototypes

10.91 Prototypes used exclusively for product development and testing.
10.92-10.97 [Reserved]

                            Fluxing Material

10.98 Copper-bearing fluxing material.

                              Ethyl Alcohol

10.99 Importation of ethyl alcohol for nonbeverage purposes.

                  United States Government Importations

10.100 Entry, examination, and tariff status.
10.101 Immediate delivery.
10.102 Duty-free entries.
10.103 American goods returned.
10.104 Temporary importation entries for United States Government 
          agencies.

                                  Wheat

10.106 [Reserved]

                         Rescue and Relief Work

10.107 Equipment and supplies; admission.

              Products Exported Under Lease and Reimported

10.108 Entry of reimported articles exported under lease.

           Strategic Materials Obtained by Barter or Exchange

10.110 [Reserved]

          Late Filing of Free Entry and Reduced Duty Documents

10.112 Filing free entry documents or reduced duty documents after 
          entry.

  Instruments and Apparatus for Educational and Scientific Institutions

10.114 General provisions.
10.115-10.119 [Reserved]

                      Visual or Auditory Materials

10.121 Visual or auditory materials of an educational, scientific, or 
          cultural character.

                 Rate of Duty Dependent Upon Actual Use

10.131 Circumstances in which applicable.
10.132 [Reserved]
10.133 Conditions required to be met.
10.134 Declaration of intent.
10.135 Deposit of duties.
10.136 Suspension of liquidation.
10.137 Records of use.
10.138 Proof of use.
10.139 Liquidation.

             Importations Not Over $200 and Bona Fide Gifts

10.151 Importations not over $200.
10.152 Bona-fide gifts.
10.153 Conditions for exemption.

                    Generalized System of Preferences

10.171 General.
10.172 Claim for exemption from duty under the Generalized System of 
          Preferences.
10.173 Evidence of country of origin.
10.174 Evidence of direct shipment.
10.175 Imported directly defined.
10.176 Country of origin criteria.
10.177 Cost or value of materials produced in the beneficiary developing 
          country.
10.178 Direct costs of processing operations performed in the 
          beneficiary developing country.
10.178a Special duty-free treatment for sub-Saharan African countries.

                        Canadian Crude Petroleum

10.179 Canadian crude petroleum subject to a commercial exchange 
          agreement between United States and Canadian refiners.

[[Page 83]]

                 Certain Fresh, Chilled, or Frozen Beef

10.180 Certification.

        Watches and Watch Movements From U.S. Insular Possessions

10.181-10.182 [Reserved]

                             Civil Aircraft

10.183 Duty-free entry of civil aircraft, aircraft engines, ground 
          flight simulators, parts, components, and subassemblies.

                  Subpart B_Caribbean Basin Initiative

10.191 General.
10.192 Claim for exemption from duty under the CBI.
10.193 Imported directly.
10.194 Evidence of direct shipment.
10.195 Country of origin criteria.
10.196 Cost or value of materials produced in a beneficiary country or 
          countries.
10.197 Direct costs of processing operations performed in a beneficiary 
          country or countries.
10.198 Evidence of country of origin.
10.198a Duty reduction for certain leather-related articles.
10.198b Products of Puerto Rico processed in a beneficiary country.
10.199 Duty-free entry for certain beverages produced in Canada from 
          Caribbean rum.

                    Subpart C_Andean Trade Preference

10.201 Applicability.
10.202 Definitions.
10.203 Eligibility criteria in general.
10.204 Imported directly.
10.205 Country of origin criteria.
10.206 Value content requirement.
10.207 Procedures for filing duty-free treatment claim and submitting 
          supporting documentation.

  Subpart D_Textile and Apparel Articles Under the African Growth and 
                             Opportunity Act

10.211 Applicability.
10.212 Definitions.
10.213 Articles eligible for preferential treatment.
10.214 Certificate of Origin.
10.215 Filing of claim for preferential treatment.
10.216 Maintenance of records and submission of Certificate by importer.
10.217 Verification and justification of claim for preferential 
          treatment.

      Subpart E_United States-Caribbean Basin Trade Partnership Act

  Textile and Apparel Articles Under the United States-Caribbean Basin 
                          Trade Partnership Act

10.221 Applicability.
10.222 Definitions.
10.223 Articles eligible for preferential treatment.
10.224 Certificate of Origin.
10.225 Filing of claim for preferential treatment.
10.226 Maintenance of records and submission of Certificate by importer.
10.227 Verification and justification of claim for preferential 
          treatment.
10.228 Additional requirements for preferential treatment of brassieres.

   Non-Textile Articles Under the United States-Caribbean Basin Trade 
                             Partnership Act

10.231 Applicability.
10.232 Definitions.
10.233 Articles eligible for preferential tariff treatment.
10.234 Certificate of Origin.
10.235 Filing of claim for preferential tariff treatment.
10.236 Maintenance of records and submission of Certificate by importer.
10.237 Verification and justification of claim for preferential tariff 
          treatment.

        Subpart F_Andean Trade Promotion and Drug Eradication Act

Apparel and Other Textile Articles Under the Andean Trade Promotion and 
                          Drug Eradication Act

10.241 Applicability.
10.242 Definitions.
10.243 Articles eligible for preferential treatment.
10.244 Certificate of Origin.
10.245 Filing of claim for preferential treatment.
10.246 Maintenance of records and submission of Certificate by importer.
10.247 Verification and justification of claim for preferential 
          treatment.
10.248 Additional requirements for preferential treatment of brassieres.

    Extension of ATPA Benefits to Tuna and Certain Other Non-Textile 
                                Articles

10.251 Applicability.
10.252 Definitions.
10.253 Articles eligible for preferential treatment.
10.254 Certificate of Origin.
10.255 Filing of claim for preferential treatment.
10.256 Maintenance of records and submission of Certificate by importer.

[[Page 84]]

10.257 Verification and justification of claim for preferential 
          treatment.

           Subpart G_United States-Canada Free Trade Agreement

10.301 Scope and applicability.
10.302 Eligibility criteria in general.
10.303 Originating goods.
10.304 Exclusions.
10.305 Value content requirement.
10.306 Direct shipment to the United States.
10.307 Documentation.
10.308 Records retention.
10.309 Verification of documentation.
10.310 Election to average for motor vehicles.
10.311 Documentation for election to average for motor vehicles.

           Subpart H_United States-Chile Free Trade Agreement

                           General Provisions

10.401 Scope.
10.402 General definitions.

                           Import Requirements

10.410 Filing of claim for preferential tariff treatment upon 
          importation.
10.411 Certification of origin.
10.412 Importer obligations.
10.413 Validity of certification.
10.414 Certification not required.
10.415 Maintenance of records.
10.416 Effect of noncompliance; failure to provide documentation 
          regarding transshipment.

                         Tariff Preference Level

10.420 Filing of claim for tariff preference level.
10.421 Goods eligible for tariff preference claims.
10.422 Submission of certificate of eligibility.
10.423 Certificate of eligibility not required.
10.424 Effect of noncompliance; failure to provide documentation 
          regarding transshipment of non-originating cotton or man-made 
          fiber fabric or apparel goods.
10.425 Transit and transshipment of non-originating cotton or man-made 
          fiber fabric or apparel goods.

                           Export Requirements

10.430 Export requirements.
10.431 Failure to comply with requirements.

                   Post-Importation Duty Refund Claims

10.440 Right to make post-importation claim and refund duties.
10.441 Filing procedures.
10.442 CBP processing procedures.

                             Rules of Origin

10.450 Definitions.
10.451 Originating goods.
10.452 Exclusions.
10.453 Treatment of textile and apparel sets.
10.454 Regional value content.
10.455 Value of materials.
10.456 Accessories, spare parts or tools.
10.457 Fungible goods and materials.
10.458 Accumulation.
10.459 De minimis.
10.460 Indirect materials.
10.461 Retail packaging materials and containers.
10.462 Packing materials and containers for shipment.
10.463 Transit and transshipment.

                 Origin Verifications and Determinations

10.470 Verification and justification of claim for preferential 
          treatment.
10.471 Special rule for verification in Chile of U.S. imports of textile 
          and apparel products.
10.472 Verification in the United States of textile and apparel goods.
10.473 Issuance of negative origin determinations.
10.474 Repeated false or unsupported preference claims.

                                Penalties

10.480 General.
10.481 Corrected declaration by importers.
10.482 Corrected certification of origin by exporters or producers.
10.483 Framework for correcting declarations and certifications.

                Goods Returned After Repair or Alteration

10.490 Goods re-entered after repair or alteration in Chile.

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff 
Schedule of the United States), 1321, 1481, 1484, 1498, 1508, 1623, 
1624, 3314;
    Section 10.17 also issued under 19 U.S.C. 1401a, 1402;
    Sections 10.25 and 10.26 also issued under 19 U.S.C. 3592;
    Sections 10.41, 10.41a, 10.107 also issued under 19 U.S.C. 1322;
    Section 10.41b also issued under 19 U.S.C. 1202 (Chapter 98, 
Subchapter III, U.S. Note 3, HTSUS);
    Section 10.53 also issued under 16 U.S.C. 1521, et seq.;
    Section 10.59 also issued under 19 U.S.C. 1309, 1317;
    Sections 10.61, 10.62, 10.63, 10.64, 10.64a also issued under 19 
U.S.C. 1309;
    Sections 10.62a, 10.65 also issued under 19 U.S.C. 1309, 1317, 1555, 
1556, 1557, 1646a;
    Sec. 10.62b also issued under 19 U.S.C. 1557;

[[Page 85]]

    Sections 10.70, 10.71 also issued under 19 U.S.C. 1486;
    Sections 10.80, 10.81, 10.82, 10.83 also issued under 19 U.S.C. 1313 
(e) and (i);
    Section 10.91 also issued under Pub. L. 106-476 (114 Stat. 2101), 
sections 1434, 1435;
    Sections 10.171 through 10.178a also issued under 19 U.S.C. 2461 et 
seq.;
    Section 10.183 also issued under 19 U.S.C. 1202 (General Note 6, 
HTSUS);
    Sections 10.191 through 10.199 also issued under 19 U.S.C. 2701 et 
seq.;
    Sections 10.201 through 10.207 also issued under 19 U.S.C. 3203;
    Sections 10.211 through 10.217 also issued under 19 U.S.C. 3721;
    Sections 10.221 through 10.228 and Sec. Sec. 10.231 through 10.237 
also issued under 19 U.S.C. 2701 et seq.
    Sections 10.241 through 10.248 and Sec. Sec. 10.251 through 10.257 
also issued under 19 U.S.C. 3203.
    Sections 10.401 through 10.490 also issued under Pub. L. 108-77, 117 
Stat. 909 (19 U.S.C. 3805 note).

    Source: 28 FR 14663, Dec. 31, 1963, unless otherwise noted.



                      Subpart A_General Provisions

                     Articles Exported and Returned



Sec. 10.1  Domestic products; requirements on entry.

    (a) Except as otherwise provided for in paragraph (g), (h), (i) or 
(j) of this section or elsewhere in this part or in Sec. 145.35 of this 
chapter, the following documents shall be filed in connection with the 
entry of articles in a shipment valued over $2,000 and claimed to be 
free of duty under subheading 9801.00.10 or 9802.00.20, Harmonized 
Tariff Schedule of the United States (HTSUS):
    (1) A declaration by the foreign shipper in substantially the 
following form:
    I, ----------------------,
declare that to the best of my knowledge and belief the articles herein 
specified were exported from the United States, from the port of ------
---------- on or about ----------------, 19------, and that they are 
returned without having been advanced in value or improved in condition 
by any process of manufacture or other means.

----------------------------------------------------------------------------------------------------------------
      Marks              Number            Quantity              Description              Value, in U.S. coin
----------------------------------------------------------------------------------------------------------------
                   .................  .................  ...........................  ..........................
                   .................  .................  ...........................  ..........................
                   .................  .................  ...........................  ..........................
                   .................  .................  ...........................  ..........................
                   .................  .................  ...........................  ..........................
                           (Date)     .................  ...........................              (Signature)
                   .................  .................  ...........................  ..........................
                        (Address)     .................  ...........................               (Capacity)
----------------------------------------------------------------------------------------------------------------

    (2) A declaration by the owner, importer, consignee, or agent having 
knowledge of the facts regarding the claim for free entry. If the owner 
or ultimate consignee is a corporation, such declaration may be signed 
by the president, vice president, secretary, or treasurer of the 
corporation, or may be signed by any employee or agent of the 
corporation who holds a power of attorney executed under the conditions 
outlined in subpart C, part 141 of this chapter and a certification by 
the corporation that such employee or other agent has or will have 
knowledge of the pertinent facts. This declaration shall be in 
substantially the following form:

    I, --------------,
declare that the (above) (attached) declaration by the foreign shipper 
is true and correct to the best of my knowledge and belief, that the 
articles were manufactured by ---------------- (name of manufacturer) 
located in ---------------- (city and state), that the articles were not 
manufactured or produced in the United States under subheading 
9813.00.05, HTSUS, and that the articles were exported from the United 
States without benefit of drawback.

________________________________________________________________________
(Date)

________________________________________________________________________
(Address)

________________________________________________________________________
(Signature)

________________________________________________________________________
(Capacity)

    (b) In any case in which the value of the returned articles exceeds 
$2,000 and the articles are not clearly marked with the name and address 
of the U.S. manufacturer, the port director may require, in addition to 
the declarations

[[Page 86]]

required in paragraph (a) of this section, such other documentation or 
evidence as may be necessary to substantiate the claim for duty-free 
treatment. Such other documentation or evidence may include a statement 
from the U.S. manufacturer verifying that the articles were made in the 
United States, or a U.S. export invoice, bill of lading or airway bill 
evidencing the U.S. origin of the articles and/or the reason for the 
exportation of the articles.
    (c) A certificate from the master of a vessel stating that products 
of the United States are returned without having been unladen from the 
exporting vessel may be accepted in lieu of the declaration of the 
foreign shipper required by paragraph (a)(1) of this section.
    (d) If the port director is reasonably satisfied, because of the 
nature of the articles or production of other evidence, that the 
articles are imported in circumstances meeting the requirements of 
subheading 9801.00.10 or 9802.00.20, HTSUS, and related section and 
additional U.S. notes, he may waive the requirements for producing the 
documents specified in paragraph (a) of this section.
    (e) No evidence relative to the conditions of subheading 9801.00.10, 
HTSUS, shall be required in the case of articles the product of the U.S. 
in use at the time of importation as the usual coverings or containers 
of merchandise not subject to an ad valorem rate of duty unless such 
articles would be dutiable if not products of the U.S. under General 
Rule of Interpretation 5, HTSUS.
    (f) In the case of photographic films and dry plates manufactured in 
the United States (except motion picture films to be used for commercial 
purposes) exposed abroad and entered under subheading 9802.00.20, HTSUS, 
the requirements of paragraphs (a) and (c) of this section are 
applicable except that the declaration by the foreign shipper provided 
for in paragraph (a)(1) to the effect that the articles ``are returned 
without having been advanced in value or improved in condition by any 
process of manufacture or other means'' shall be crossed out, and the 
entrant shall show on the declaration provided for in paragraph (a)(2) 
that the subject articles when exported were of U.S. manufacture and are 
returned after having been exposed, or exposed and developed, and, in 
the case of motion picture films, that they will not be used for 
commercial purposes.
    (g) Aircraft and aircraft parts and equipment. (1) In the case of 
aircraft and aircraft parts and equipment returned to the United States 
under subheading 9801.00.10, HTSUS, by or for the account of an aircraft 
owner or operator and intended for use in his own aircraft operations, 
within or outside the United States, the entry summary may be made on 
Customs Form 3311. The entry summary on Customs Form 3311 shall be 
executed by the entrant and supported by the entry documentation 
required by Sec. 142.3 of this chapter. If the Customs officer is 
satisfied that the articles are products of the United States, that they 
have not been improved in condition or advanced in value while abroad, 
and that no drawback has been or will be paid, the other documents 
described in this section shall not be required, and no bond need be 
filed for their production.
    (2) The entrant shall show on Customs Form 3311:
    (i) The name and address of the aircraft owner or operator by whom 
or for whose account the articles are returned to the United States, in 
the block headed ``Articles Returned To (Name and Address)'',
    (ii) The name of the importing vessel or conveyance,
    (iii) The date of its arrival,
    (iv) A description of the articles,
    (v) The value of the articles, and
    (vi) That the articles are intended for use by the aircraft owner or 
operator in his own aircraft operations.
    (3) If Customs Form 3311 is filed at time of entry, it shall serve 
as both the entry and the entry summary.
    (h) Nonconsumable vessel stores and equipment. (1) In the case of 
nonconsumable vessel stores and equipment returned to the United States 
under subheading 9801.00.10, HTSUS, the entry summary may be made on 
Customs Form 3311. The entry summary on Customs Form 3311 shall be 
executed in duplicate by the entrant

[[Page 87]]

and supported by the entry documentation required by Sec. 142.3 of this 
chapter. Before an entry summary on Customs Form 3311 may be accepted 
for nonconsumable vessel stores and equipment, the Customs officer shall 
be satisfied that:
    (i) The articles are products of the United States.
    (ii) The articles have not been improved in condition or advanced in 
value while abroad.
    (iii) No drawback has been or will be paid, and
    (iv) No duty equal to an internal revenue tax is payable under 
subheading 9801.00.80, HTSUS.
    (2) The documentation described in paragraph (a) of this section 
shall not be required in connection with an entry for nonconsumable 
vessel stores and equipment on Customs Form 3311.
    (3) To satisfy the Customs officer that no drawback has been or will 
be paid on the articles in connection with their removal from the United 
States, the master of the vessel or other person having knowledge of the 
facts shall furnish a written declaration which may be made on the 
reverse side of Customs Form 3311 showing that the articles were:
    (i) Exported as stores or equipment on a United States vessel or a 
vessel operated by the United States Government,
    (ii) Not landed in a foreign country, except for any needed repairs, 
adjustments, or refilling and return to the vessel from which landed or,
    (iii) For transshipment as stores or equipment to another vessel.
    (4) The entrant also shall show:
    (i) The name of the importing vessel,
    (ii) The date of its arrival,
    (iii) A description of the articles, and
    (iv) The value of the articles.
    (5) If Customs Form 3311 is filed at time of entry, it shall serve 
as both the entry and the entry summary.
    (i) When the total value of articles of claimed American origin 
contained in any shipment does not exceed $250 and such articles are 
found to be unquestionably products of the United States and do not 
appear to have been advanced in value or improved in condition while 
abroad and no quota is involved, free entry thereof may be made under 
subheading 9801.00.10 on Customs Form 3311, executed by the owner, 
importer, consignee, or agent and filed in duplicate, without regard to 
the requirement of filing the documentation provided for in paragraph 
(a) of this section, unless the Customs officer has reason to believe 
that Customs drawback or exemption from internal revenue tax, or both, 
were probably allowed on exportation of the articles or that they are 
otherwise subject to duty. The entrant shall show on Customs Form 3311 
the name of the importing conveyance, the date of its arrival, the name 
of the country from which the articles were returned to the United 
States, and the value of the articles. The entrant shall also produce 
evidence of his right to make entry (except as provided in Sec. 
141.11(b) of this chapter). If the Customs officer is not entirely 
certain that the articles to be entered under this paragraph by a 
nominal consignee are products of the United States, the actual owner or 
ultimate consignee thereof may be required to execute a Customs Form 
3311.
    (j) In the case of 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, free entry thereof may be 
made under subheading 9801.00.10, HTSUS, on Customs Form 3311 (a Customs 
Form 7501 must be submitted as well for such articles as provided in 
Sec. 143.23(h) of this chapter), executed by the owner, importer, 
consignee, or agent and filed in duplicate, without regard to the 
requirement of filing the documentation provided for in paragraph (a) of 
this section, unless the Customs officer has reason to believe that 
Customs drawback or exemption from internal revenue tax, or both, were 
probably allowed on exportation of the articles or that they are 
otherwise subject to duty. The person making entry shall show on Customs 
Form 3311 the name of the importing conveyance, the date of its arrival, 
the name of the country from which the articles were returned to the 
United States, and the value of the articles.

[[Page 88]]

The person making entry shall also produce evidence of his right to make 
entry (except as provided in Sec. 141.11(b) of this chapter). If the 
Customs officer is not entirely certain that the articles to be entered 
under this paragraph by a nominal consignee are products of the United 
States, the actual owner or ultimate consignee thereof may be required 
to execute a Customs Form 3311.

[T.D. 72-119, 37 FR 8867, May 2, 1972 as amended by T.D. 78-99, 43 FR 
13060, Mar. 29, 1978; 43 FR 20003, May 10, 1978; T.D. 79-221, 44 FR 
46812, Aug. 9, 1979; T.D. 83-82, 48 FR 14596, Apr. 5, 1983; T.D. 89-1, 
53 FR 51246, Dec. 21, 1988; T.D. 94-47, 59 FR 25566, May 17, 1994; T.D. 
97-82, 62 FR 51769, Oct. 3, 1997; T.D. 98-28, 63 FR 16416, Apr. 3, 1998]



Sec. 10.3  Drawback; internal-revenue tax.

    (a) Except as prescribed in Sec. 10.1(f) or in paragraphs (c) and 
(f) of this section, no free entry shall be allowed under Chapter 98, 
Subchapter 1, Harmonized Tariff Schedule of the United States (HTSUS), 
in the final liquidation of an entry unless the port director is 
satisfied by the certificate of exportation or other evidence or 
information that no drawback was allowed in connection with the 
exportation from the United States, and unless no internal-revenue tax 
is imposed on the importation of like articles not previously exported 
from the United States or, if such tax is being imposed at the time of 
entry for consumption or withdrawal from warehouse for consumption, the 
port director is satisfied that an internal-revenue tax on production or 
importation was paid in respect of the imported article before it was 
exported from the United States and was not refunded. Except as provided 
for in Sec. 10.1(f), when it is impracticable, because of the 
destruction of Customs records or other circumstances, to determine 
whether drawback was allowed, or the amount of drawback allowed, with 
respect to an article established to be a returned product of the United 
States which has not been advanced in value or improved in condition 
while abroad, there shall be assessed on the returned article an amount 
of duty determined as follows:
    (1) If there is any likelihood that drawback was allowable on the 
exportation of like articles at any time when the imported article may 
have been exported from the United States, the estimated amount of any 
drawback which would have been allowable if duty had been paid on any 
foreign merchandise likely to have been used in the manufacture of the 
returned article at the rate or rates applicable to such foreign 
merchandise on the date of importation of the returned article (see 
paragraph (b) of this section), and
    (2) If there is any likelihood that a refund or remission of tax was 
allowed on the exportation of the returned article, the amount of any 
internal-revenue tax which would be payable at the time of importation 
if the returned article were wholly of foreign origin, but in no such 
case shall there be assessed more than an amount equal to the duty and 
tax that would apply if the returned article were wholly of foreign 
origin and originally imported. (See Sec. 10.7(a).) Except as provided 
for in Sec. 10.1(f), if the imported article is of a kind which would 
be subject to an internal-revenue tax if of foreign origin and payment 
of an internal-revenue tax before exportation without refund thereof is 
not established, duty shall be assessed on the imported article in an 
amount equal to the internal-revenue tax imposed at the time of entry 
for consumption or withdrawal from warehouse for consumption on like 
articles of foreign origin, plus the amount of any drawback allowed on 
the exportation of the article from the United States; but if no 
drawback was allowed, the duty equal to internal-revenue tax shall be 
the total duty to be assessed. If an allowance of drawback on the 
exportation from the United States of the imported article is 
established, duty shall be assessed in an amount equal to such drawback, 
plus an amount equal to any internal-revenue tax which may be assessable 
in accordance with this paragraph; but in no case shall duty equal to 
drawback, or to drawback and internal-revenue tax, be assessed in an 
amount in excess of the ordinary Customs duty and internal-revenue tax 
applicable to like articles of foreign origin. In any case, where 
payment of internal-revenue tax before exportation without refund 
thereof is established, no duty equal to an internal-revenue tax 
currently in force shall be assessed.

[[Page 89]]

    (b) In the absence of satisfactory evidence as to the nonallowance 
of drawback or the amount thereof allowed on the following articles of 
American manufacture or production, duty shall be assessed thereon in 
the amounts respectively indicated, the amount shown in each case being 
considered the fair average amount of drawback allowed on such articles:

------------------------------------------------------------------------
                    Article                          Duty assessment
------------------------------------------------------------------------
Drums, metal (when not exempted from duty in    24 cents each.
 accordance with sec. 10.3(c)).
Hosiery, nylon................................  45 cents per dozen.
Lead compound, tetraethyl.....................  $0.003 per kilogram.
Lithopone.....................................  $0.00065 per kilogram.
Oxide, zinc...................................  $0.0029 per kilogram.
Piece goods, cotton:
  Bleached....................................  $0.03199 per square
                                                 meter.
  Dyed........................................  $0.03454 per square
                                                 meter.
  Printed.....................................  $0.03226 per square
                                                 meter.
Piece goods, nylon: Dyed                        $0.29086 per square
                                                 meter.
Piece goods, rayon:
  Printed.....................................  $0.04867 per square
                                                 meter.
  Other than printed (white, piece dyed or      $0.08478 per square
   yarn dyed).                                   meter.
Tallow, refined, inedible.....................  $0.003 per kilogram.
------------------------------------------------------------------------

    (c) The following articles shall be admitted free of duty, even 
though exported from the United States with benefit of drawback:
    (1) Any article of a kind which would be admitted free of duty 
otherwise than under Chapter 98, Subchapter 1, HTSUS, if of foreign 
origin;
    (2) Substantial containers or holders of domestic manufacture, 
including shooks and staves when returned as boxes or barrels, when in 
use at the time of importation as the usual containers of merchandise;
    (3) Any article provided for in subheadings 9801.00.70 or 
9801.00.80, HTSUS, with respect to which the port director has 
determined that the collection of duty under such subheadings 9801.00.70 
or 9801.00.80, HTSUS, would involve an expense and inconvenience to the 
Government disproportionate to the probable amount of such duty; and
    (4) Other articles of domestic manufacture which are in use at the 
time of importation as the usual coverings or containers of merchandise 
not subject to an ad valorem rate of duty, and which have not been 
advanced in value or improved in condition while abroad by any process 
of manufacture or other means.
    (d) Articles manufactured or produced in the United States in a 
Customs bonded warehouse and exported shall be subject on reimportation 
to a duty equal to the total duty and internal-revenue tax, if any, 
imposed at the time of entry for consumption or withdrawal from 
warehouse for consumption with respect to the importation of like 
articles not previously exported from the United States.
    (e) Animals straying across the border or driven across the border 
for pasturage purposes or for feeding to improve them for the market and 
not returned within 8 months are excluded from free entry as domestic 
products returned.
    (f) Tobacco products and cigarette papers and tubes classifiable 
under subheading 9801.00.80, HTSUS, may be released from customs custody 
without the payment of that part of the duty attributable to the 
internal-revenue tax for return to internal-revenue bond as provided by 
section 5704(d) of the Internal Revenue Code of 1954.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 68-104, 33 FR 5616, Apr. 
11, 1968; T.D. 83-240, 48 FR 53098, Nov. 25, 1983; T.D. 89-1, 53 FR 
51246, Dec. 21, 1988; T.D. 93-66, 58 FR 44130, Aug. 19, 1993]



Sec. 10.4  Internal-revenue marks; erasure.

    Internal-revenue brands or marks on casks or other containers 
previously exported from the United States must be erased at the 
importer's expense under Customs supervision before their delivery from 
Customs custody.

[[Page 90]]



Sec. 10.5  Shooks and staves; cloth boards; port director's account.

    (a) Shooks and staves produced in the United States and returned in 
the form of complete boxes or barrels in use as the usual containers of 
merchandise are exempt from any duties imposed by the tariff laws upon 
similar containers made of foreign shooks or staves, provided their 
identity is established under the regulations in this part.
    (b) The term ``shook'' embraces only shooks which at the time of 
exportation from this country are ready to be assembled into boxes or 
barrels without further cutting to size; except that box shooks may be 
exported in double lengths and cut abroad. The number of boxes made from 
such shooks which may be imported into this country free of duty cannot 
exceed the number of complete sets of shooks exported.
    (c) [Reserved]
    (d) An exporter of shooks or staves in respect of which free entry 
is to be claimed when returned as boxes or barrels shall file in 
triplicate with the director of the port of exportation, at least 6 
hours before the landing of the articles on the exporting vessel, a 
Certificate of Registration, Customs Form 4455.
    (e) The Certificate of Registration, CF 4455, shall be completed in 
triplicate by the port director after verification from the manifest of 
the exporting vessel and the return of the lading officer. The original 
shall be forwarded by the port director to the consignee. The duplicate 
copy shall be given to the exporter and the triplicate copy shall be 
retained.
    (f) Whenever boxes or barrels alleged to have been manufactured from 
American shooks or staves are shipped to the United States from a person 
abroad other than the one to whom they were exported from the United 
States, the importer shall be required to obtain from the foreign 
consignee to whom the shooks or staves were originally exported from 
this country the certificate or certificates, Customs Form 4455, 
covering the exportation of the shooks or staves from the United States, 
or an extract therefrom signed by such consignee, showing the number of 
shooks or staves covered by such certificate or certificates, together 
with the number of superficial feet of such shooks or staves. Such Form 
4455, or extract therefrom, shall be filed by the importer in connection 
with the entry of the boxes or barrels.
    (g) Accounts shall be kept by the director of the port of 
exportation of the shooks and staves as to each exportation thereof and 
as to the returns thereof in boxes, barrels, etc. Notifications of such 
returns shall be given to the port of exportation by the director of the 
port of importation. When returns in the form of boxes, barrels, etc., 
entirely account for the shooks and staves exported as shown on the 
appropriate Customs Form 4455, the port director maintaining the account 
shall so inform the port director making inquiry about the merchandise 
being imported and alleged to contain shooks or staves covered by the 
particular exportation.
    (h) A record of cloth boards of domestic manufacture exported to be 
wrapped with foreign textiles shall be kept by the port director in a 
similar manner as for shooks and staves. Cloth boards of domestic 
manufacture are conditionally free of duty under Chapter 98, subchapter 
1, Harmonized Tariff Schedule of the United States (HTSUS). If such 
boards are advanced in value or improved in condition while abroad, free 
entry shall be denied on importation.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 78-99, 43 FR 13060, Mar. 
29, 1978; T.D. 89-1, 53 FR 51247, Dec. 21, 1988; T.D. 98-52, 63 FR 
29954, June 2, 1998]



Sec. 10.6  Shooks and staves; claim for duty exemption.

    An importer, seeking an exemption from duty on account of boxes or 
barrels made from American shooks or staves, must make such a claim on 
Customs Form 4455 at the time of filing the entry. Upon receipt, from 
the director of the port of exportation of the shooks and staves, of 
corroboration that the records of exportation do not conflict materially 
with such a claim, the exemption may be allowed. If the claim for an 
exemption is disallowed in full or in part, the importer may file a 
request within 15 days of the date of the port director's notice to him 
of any

[[Page 91]]

disallowance, for referral of the question to the Commissioner of 
Customs for review.

[T.D. 87-75, 52 FR 20066, May 29, 1987, as amended by T.D. 98-52, 63 FR 
29954, June 2, 1998]



Sec. 10.7  Substantial containers or holders.

    (a) Substantial containers or holders, which are products of the 
United States, which are of the usual and ordinary types used in the 
shipment or transportation of goods, which are reusable for such 
purposes, and which are imported containing or holding merchandise, 
shall be entered under the general regulations governing the free entry 
of domestic products exported and returned. When such containers or 
holders are imported not containing or holding merchandise they may be 
admitted without entry if readily identifiable as products of the United 
States.
    (b) Substantial containers or holders, which are of foreign 
production and previously imported duty paid, which are of the usual or 
ordinary types used in the shipment or transportation of goods, which 
are reusable for such purpose, and which are imported containing or 
holding merchandise, shall be exempt from duty if (1) exported in 
accordance with the regulations contained in Sec. 10.5 (d) and (e), and 
(2) there is filed in connection with the entry a certificate of the 
foreign shipper in the form prescribed by paragraph (c) of this section.
    (c) The certificate to be furnished by the foreign shipper for the 
use of the director of the port of entry shall be in the following form:

    I, ----------------, of ----------------, do hereby certify that to 
the best of my knowledge and belief the substantial containers and 
holders mentioned in (the annexed invoice) (invoice No. -------- of ----
----, 19--) * are of the manufacture of ---------------- and were 
exported from the United States at the port of ------------, per S.S. --
-------------- on ----------, 19--, and that the same are being returned 
to the United States (empty) filled with --------) (holdings ----------
----).*
---------------------------------------------------------------------------

    *Cross out inapplicable words.
---------------------------------------------------------------------------

________________________________________________________________________
                                                                 Shipper

    (d) The port director, after verification of the foreign shipper's 
certificate with the records of the director of the port of exportation 
in this country, shall allow free entry to the extent the basis for such 
allowance is verified. The procedure in the last two sentences of Sec. 
10.6 shall be applicable.
    (e) If claim for exemption from duty for such containers or holders 
of foreign production previously imported duty paid is made at the time 
of entry, the certificate of the foreign shipper may be accepted if 
produced at any time prior to the liquidation of the entry.
    (f) When such containers or holders of foreign production previously 
imported duty paid are reimported empty, they may be admitted without 
entry if readily identifiable as having been previously imported duty 
paid.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 82-145, 47 FR 35475, 
Aug. 16, 1982; T.D. 86-118, 51 FR 22515, June 20, 1986; T.D. 97-82, 62 
FR 51769, Oct. 3, 1997]



Sec. 10.8  Articles exported for repairs or alterations.

    (a) Except as otherwise provided for in this section and except in 
the case of goods covered by Sec. 181.64 of this chapter, the following 
documents shall be filed in connection with the entry of articles which 
are returned after having been exported for repairs or alterations and 
which are claimed to be subject to duty only on the value of the repairs 
or alterations performed abroad under subheading 9802.00.40 or 
9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS):
    (1) A declaration from the person who performed such repairs or 
alterations, in substantially the following form:

    I,----------------, declare that the articles herein specified are 
the articles 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 the full 
cost or (when no charge is made) value of such repairs or alterations 
are correctly

[[Page 92]]

stated below; and that no substitution whatever has been made to replace 
any of the articles originally received by me (us) from the owner or 
exporter thereof mentioned above.

------------------------------------------------------------------------
                                              Full cost or
                                                (when no
                                                charge is
                                 Description   made) value   Total value
                                 of articles   of repairs    of articles
       Marks and numbers           and of          or           after
                                 repairs or    alterations   repairs or
                                 alterations      (see       alterations
                                               subchapter
                                               II, chapter
                                               98, HTSUS)
------------------------------------------------------------------------
                                ............  ............  ............
                                ............  ............  ............
                                ............  ............  ............
------------------------------------------------------------------------

________________________________________________________________________
(Date)

________________________________________________________________________
(Address)

________________________________________________________________________
(Signature)

________________________________________________________________________
(Capacity)

    (2) 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 articles were not manufactured 
or produced in the United States under subheading 9813.00.05, HTSUS; 
that such articles were exported from the United States for repairs or 
alterations and without benefit of drawback from ---------------- (port) 
on ----------------, 19----------------; and that the articles entered 
in their repaired or altered condition are the same articles that were 
exported on the above date and that are identified in the (above) 
(attached) declaration.

________________________________________________________________________
(Date)

________________________________________________________________________
(Address)

________________________________________________________________________
(Signature)

________________________________________________________________________
(Capacity)

    (b) The port director may require such additional documentation as 
is deemed necessary to prove actual exportation of the articles from the 
United States for repairs or alterations, such as a foreign customs 
entry, foreign customs invoice, foreign landing certificate, bill of 
lading, or an airway bill.
    (c) If the port director concerned is satisfied, because of the 
nature of the articles or production of other evidence, that the 
articles are imported under circumstances meeting the requirements of 
subheading 9802.00.40 or 9802.00.50, HTSUS, and related section and 
additional U.S. notes, he may waive submission of the declarations 
provided for in paragraph (a) of this section.
    (d) The port director shall require at the time of entry 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 outside the 
United States, which is to be set forth in the invoice and entry papers 
as the basis for the assessment of duty under subheading 9802.00.40 or 
9802.00.50, HTSUS, shall be limited to the cost or value of the repairs 
or alterations actually performed abroad, which will include all 
domestic and foreign articles furnished for the repairs or alterations 
but shall not include any of the expenses incurred in this country 
whether by way of engineering costs, preparation of plans or 
specifications, furnishing of tools or equipment for doing the repairs 
or alterations abroad, or otherwise.

[T.D. 94-47, 59 FR 25567, May 17, 1994, as amended by T.D. 95-68, 60 FR 
46361, Sept. 6, 1995]



Sec. 10.8a  Imported articles exported and reimported.

    (a) In addition to regular entry procedures, supplementary 
documentation is required in connection with duty-free entries under 
subheading 9801.00.25, Harmonized Tariff Schedule of the United States 
(19 U.S.C. 1202), of articles which were originally entered duty paid, 
removed from Customs custody, and subsequently exported, if:
    (1) The articles were exported within 3 years after the date of the 
previous importation.
    (2) The articles were not advanced in value or improved in condition 
by any process of manufacture or other means while abroad.
    (3) The articles did not conform to sample or specifications abroad.

[[Page 93]]

    (4) The articles are reimported by or for the account of the person 
who imported them into and exported them from the United States.
    (b) The following supplementary documents shall be filed in 
connection with the entry of articles claimed to be free of duty under 
subheading 9801.00.25, Harmonized Tariff Schedule of the United States:
    (1) A declaration by the person abroad who received and is returning 
the merchandise to the United States, in substantially the following 
form:

    I declare that the--------------------------(Description of 
articles) were received by me from ---------------------------------- 
(Name and address of U.S. exporter), that they have not been advanced in 
value or improved in condition by any process of manufacture or other 
means and are being returned to --------------------------------(Name 
and address of consignee in the United States) because they do not 
conform to sample or specifications for the following reasons:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Date) (Signature)
________________________________________________________________________
(Address) (Title)

    (2) A declaration by the owner, importer, consignee, or agent, in 
substantially the following form:

    I declare that the ---------------------- (Description of articles) 
were previously imported into the United States at the Port of --------
-------- (Name of port), Entry No.------, on -------------- (Date of 
entry) by ---------------------- (Name and address of importer) at which 
time duty was paid; that they were exported from the United States at 
the Port of ---------------- (Name of port) on -------------------- 
(Date of exportation) by ---------------------- (Name and address of 
exporter) without benefit of drawback; that the articles are being 
reimported by or for the account of ----------------, and, that the 
attached declaration from -------------------------------- (Name of 
foreign shipper) is correct in every respect.
________________________________________________________________________
(Date) (Signature)
________________________________________________________________________
(Address) (Title)

    (c) If the port director concerned is reasonably satisfied because 
of the nature of the articles or production of other evidence that the 
requirements of subheading 9801.00.25, Harmonized Tariff Schedule of the 
United States, and the related section and additional U.S. notes have 
been met, he may waive the production of the documents provided for in 
paragraph (b) of this section.

[T.D. 72-221, 37 FR 17469, Aug. 29, 1972, as amended by T.D. 89-1, 53 FR 
51247, Dec. 21, 1988]



Sec. 10.9  Articles exported for processing.

    (a) Except as otherwise provided for in this section, the following 
documents shall be filed in connection with the entry of articles which 
are returned after having been exported for further processing and which 
are claimed to be subject to duty only on the value of the processing 
performed abroad under subheading 9802.00.60, Harmonized Tariff Schedule 
of the United States (HTSUS):
    (1) A declaration by the person who performed the processing abroad, 
in substantially the following form:

    I, ----------, declare that the articles herein specified are the 
articles 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 processed; that only the processing described below was effected 
by me (us); that the full cost or (when no charge is made) value of such 
processing and the value of the articles after processing are correctly 
stated below; and that no substitution whatever has been made to replace 
any of the articles originally received by me (us) from the owner or 
exporter thereof mentioned above.

------------------------------------------------------------------------
                                               Full cost or
                                                 (when no
                                                 charge is
                                 Description    made) value  Total value
                                 of articles        of       of articles
       Marks and numbers            and of      processing      after
                                  processing       (see       processing
                                                subchapter
                                                II, chapter
                                                98, HTSUS)
------------------------------------------------------------------------
                                .............  ............  ...........
                                .............  ............  ...........
                                .............  ............  ...........
------------------------------------------------------------------------

________________________________________________________________________
(Date)

________________________________________________________________________
(Address)

________________________________________________________________________
(Signature)

________________________________________________________________________
(Capacity)


[[Page 94]]


    (2) 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 processing abroad is true and correct to the 
best of my knowledge and belief; that the articles were manufactured in 
the United States by ---------------- (name and address) or, if of 
foreign origin, were subjected to ---------------- (show processes of 
manufacture, such as molding, casting, machining) in the United States 
by ---------------- (name and address); that the articles were not 
manufactured or produced in the United States under subheading 
9813.00.05, HTSUS; that the articles were exported for processing and 
without benefit of drawback from ---------------- (port) on ------------
, 19 ------; that the articles entered in their processed condition are 
otherwise the same articles that were exported on the above date and 
that are identified in the (above) (attached) declaration; and that the 
returned articles will be subjected to ---------------- (describe 
processing to be performed in the United States) by ---------------- 
(name and address of U.S. processor).___________________________________

________________________________________________________________________
(Date)

________________________________________________________________________
(Address)

________________________________________________________________________
(Signature)

________________________________________________________________________
(Capacity)

    (b) The port director may require such additional documentation as 
is deemed necessary to prove actual exportation of the articles from the 
United States for processing, such as a foreign customs entry, foreign 
customs invoice, foreign landing certificate, bill of lading, or an 
airway bill.
    (c) If the port director concerned is satisfied, because of the 
nature of the articles or production of other evidence, that the 
articles are imported under circumstances meeting the requirements of 
subheading 9802.00.60, HTSUS, and related section and additional U.S. 
notes, he may waive submission of the declarations provided for in 
paragraph (a) of this section.
    (d) The port director shall require at the time of entry a deposit 
of estimated duties based upon the full cost or value of the processing. 
The cost or value of the processing outside the United States, which is 
to be set forth in the invoice and entry papers as the basis for the 
assessment of duty under subheading 9802.00.60, HTSUS, shall be limited 
to the cost or value of the processing actually performed abroad, which 
will include all domestic and foreign articles used in the processing 
but shall not include the exported United States metal article or any of 
the expenses incurred in this country whether by way of engineering 
costs, preparation of plans or specifications, furnishing of tools or 
equipment for doing the processing abroad, or otherwise.

[T.D. 94-47, 59 FR 25568, May 17, 1994]



Sec. 10.10  [Reserved]

         Articles Assembled Abroad With United States Components



Sec. 10.11  General.

    (a) Sections 10.12 through 10.23 set forth definitions and 
interpretative regulations adopted by the Commissioner of Customs 
pertaining to the construction of subheading 9802.00.80, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202) and related 
provisions of law. These provisions concern claims for the exemption 
from duty provided by subheading 9802.00.80, Harmonized Tariff Schedule 
of the United States (19 U.S.C. 1202), for American-made fabricated 
components which are returned to the United States as parts of articles 
assembled abroad. The examples included in these sections describe 
specific situations in which the exemption may or may not be applicable. 
The definitions and regulations that follow are promulgated to inform 
the public of the constructions and interpretations that the United 
States Customs Service shall give to relevant statutory terms and to 
assure the impartial and uniform assessment of duties upon merchandise 
claimed to be partially exempt from duty under subheading 9802.00.80, 
Harmonized Tariff Schedule of the United States (19 U.S.C. 1202), at the 
various ports of entry. Nothing in these regulations purports or is 
intended to restrict the legal right of importers or others to a 
judicial review of the matters contained therein.

[[Page 95]]

    (b) Section 10.24 sets forth the documentary requirements applicable 
to the entry of assembled articles claimed to be subject to the 
exemption provided under subheading 9802.00.80, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202). Allowance of an 
importer's claim is dependent upon meeting the statutory requirements 
for the exemption under subheading 9802.00.80, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202) and his complying with 
the documentary requirements set forth in Sec. 10.24.

[T.D. 75-230, 40 FR 43021, Sept. 18, 1975, as amended by T.D. 89-1, 53 
FR 51247, Dec. 21, 1988; T.D. 97-82, 62 FR 51769, Oct. 3, 1997]



Sec. 10.12  Definitions.

    As used in Sec. Sec. 10.11 through 10.24, the following terms shall 
have the meanings indicated:
    (a) American-made. The term ``American-made'' is used to refer to a 
product of the United States as defined in paragraph (e) of this 
section.
    (b) Assembly. ``Assembly'' means the fitting or joining together of 
fabricated components.
    (c) Exemption. ``Exemption'' means the deduction of the cost or 
value of products of the United States which were assembled abroad in 
accordance with the requirements of subheading 9802.00.80, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202), from the full 
value of the assembled article.
    (d) Fabricated component. ``Fabricated component'' means a 
manufactured article ready for assembly in the condition as exported 
except for operations incidental to the assembly.
    (e) Product of the United States. A ``product of the United States'' 
is an article manufactured within the Customs territory of the United 
States and may consist wholly of United States components or materials, 
of United States and foreign components or materials, or wholly of 
foreign components or materials. If the article consists wholly or 
partially of foreign components or materials, the manufacturing process 
must be such that the foreign components or materials have been 
substantially transformed into a new and different article, or have been 
merged into a new and different article.

[T.D. 75-230, 40 FR 43021, Sept. 18, 1975, as amended by T.D. 89-1, 53 
FR 51247, Dec. 21, 1988]



Sec. 10.13  Statutory provision: Subheading 9802.00.80, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202).

    Subheading 9802.00.80, Harmonized Tariff Schedule of the United 
States (HTSUS), (19 U.S.C. 1202), provides that articles assembled 
abroad in whole or in part of fabricated components, the product of the 
United States, which (a) were exported in condition ready for assembly 
without further fabrication, (b) have not lost their physical identity 
in such articles by change in form, shape, or otherwise, and (c) have 
not been advanced in value or improved in condition abroad except by 
being assembled and except by operations incidental to the assembly 
process such as cleaning, lubricating, and painting, are subject to a 
duty upon the full value of the imported article, less the cost or, if 
no charge is made, the value of such products of the United States. The 
rate of duty which is assessed upon the dutiable portion of the imported 
article is that which is applicable to the imported article as a whole 
under the appropriate provision of the HTSUS (19 U.S.C. 1202) for such 
article. If that provision requires a specific or compound rate of duty, 
the total duties assessed on the imported article are reduced in such 
proportion as the cost or value of the returned United States components 
which qualify for the exemption bears to the full value of the assembled 
article.

    Example 1. A transistor radio is assembled abroad from foreign-made 
components and American-made transistors. Upon importation, the 
transistor radio is subject to the ad valorem rate of duty applicable to 
transistor radios upon the value of the radio less the cost or value of 
the American-made transistors assembled therein.
    Example 2. A solid-state watch movement is assembled abroad from 
foreign-made components and an American-made integrated circuit. If the 
movement in question is subject to the specific rate of duty of 75 cents 
if the value of the assembled movement is $30, and if the value of the 
American-made integrated circuit is $10, then the value of the 
integrated circuit represents one third of the

[[Page 96]]

total value of the assembled article and the duty on the assembled 
article will be reduced by one third ($.25). Therefore, the duty on the 
assembled movement is 50 cents.

[T.D. 75-230, 40 FR 43021, Sept. 18, 1975, as amended by T.D. 89-1, 53 
FR 51247, Dec. 21, 1988]



Sec. 10.14  Fabricated components subject to the exemption.

    (a) Fabricated components, the product of the United States. Except 
as provided in Sec. 10.15, the exemption provided under subheading 
9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) (19 
U.S.C. 1202), applies to fabricated components, the product of the 
United States. The components must be in condition ready for assembly 
without further fabrication at the time of their exportation from the 
United States to qualify for the exemption. Components will not lose 
their entitlement to the exemption by being subjected to operations 
incidental to the assembly either before, during, or after their 
assembly with other components. Materials undefined in final dimensions 
and shapes, which are cut into specific shapes or patterns abroad are 
not considered fabricated components.

    Example 1. Articles identifiable in their exported condition as 
components or parts of the article into which they will be assembled, 
such as transistors, diodes, integrated circuits, machinery parts, or 
precut parts of wearing apparel, are regarded as fabricated components.
    Example 2. Prestamped metal lead frames for semiconductor devices 
exported in multiple unit strips in which the individual frame units are 
connected to each other, or integrated circuit wafers containing 
individual integrated circuit dice which have been scribed or scored in 
the United States, are regarded as fabricated components. The separation 
of the individual frames by cutting, or the segmentation of the wafer 
into individual dice by flexing and breaking along scribed or scored 
lines, is regarded as an operation incidental to the assembly process.
    Example 3. Wires of various type, electrical conductors, metal 
foils, insulating tapes, ribbons, findings used in dressmaking, and 
similar products, which are in a finished state when exported from the 
United States, and are ready for use in the assembly of the imported 
article, are regarded as fabricated components if they are only cut to 
length or subjected to operations incidental to the assembly process 
while abroad.
    Example 4. Uncut textile fabrics exported in bolts from which 
wearing apparel components will be cut according to a pattern are not 
regarded as fabricated components. Similarly, other materials, such as 
lumber, leather, sheet metal, plastic sheeting, exported in basic shapes 
and forms to be fabricated into components for assembly, are not 
eligible for treatment as fabricated components.

    (b) Substantial transformation of foreign-made articles or 
materials. Foreign-made articles or materials may become products of the 
United States if they undergo a process of manufacture in the United 
States which results in their substantial transformation. Substantial 
transformation occurs when, as a result of manufacturing processes, a 
new and different article emerges, having a distinctive name, character, 
or use, which is different from that originally possessed by the article 
or material before being subject to the manufacturing process. The mere 
finishing or modification of a partially or nearly complete foreign 
product in the United States will not result in the substantial 
transformation of such product and it remains the product of a foreign 
country.

    Example 1. A cast metal housing for a valve is made in the United 
States from imported copper ingots, the product of a foreign country. 
The housing is a product of the United States because the manufacturing 
operations performed in the United States to produce the housing 
resulted in a substantial transformation of the foreign copper ingots.
    Example 2. An integrated circuit device is assembled in a foreign 
country and imported into the United States where its leads are formed 
by bending them to a specified angle. It is then tested and marked. The 
imported article does not become a product of the United States because 
the operations performed in the United States do not result in a 
substantial transformation of the foreign integrated circuit device.
    Example 3. A circuit board assembly for a computer is assembled in 
the United States by soldering American-made and foreign-made components 
onto an American-made printed circuit board. The finished circuit board 
assembly has a distinct electronic function and is ready for 
incorporation into the computer. The foreign-made components have 
undergone a substantial transformation by becoming permanent parts of 
the circuit board assembly. The circuit board assembly, including all of 
its parts is regarded as a fabricated component, the product of the 
United

[[Page 97]]

States, for purposes of subheading 9802.00.80, HTSUS (19 U.S.C. 1202).

[T.D. 75-230, 40 FR 43022, Sept. 18, 1975, as amended by T.D. 89-1, 53 
FR 51247, Dec. 21, 1988]



Sec. 10.15  Fabricated components not subject to the exemption.

    Fabricated components which are not products of the United States 
are excluded from the exemption. In addition, the exemption is not 
applicable to any component exported from the Customs territory of the 
United States:
    (a) From continuous Customs custody with remission, abatement, or 
refund of duty;
    (b) With benefit of drawback;
    (c) To comply with any law of the United States or regulation of any 
Federal agency requiring exportation; or
    (d) After manufacture or production in the United States under 
subheading 9813.00.05, HTSUS (19 U.S.C. 1202).

    Example. Partially completed components of an electric motor are 
imported in several separate shipments and are entered under a temporary 
importation bond to be manufactured into finished motors under the 
provisions of subheading 9813.00.05, HTSUS (19 U.S.C. 1202). The 
components are completed and assembled into finished electric motors. 
The finished motors are exported and are assembled abroad into electric 
fans which are subsequently imported into the United States. 
Irrespective of the fact that the assembly of the motors might involve 
such a substantial change that the motor could be considered a product 
of the United States, no exemption may be given for the value of the 
electric motors, since they were exported after manufacture or 
production in the United States under the provision of subheading 
9813.00.05, HTSUS (19 U.S.C. 1202).

[T.D. 75-230, 40 FR 43023, Sept. 18, 1975, as amended by T.D. 89-1, 53 
FR 51247, Dec. 21, 1988]



Sec. 10.16  Assembly abroad.

    (a) Assembly operations. The assembly operations performed abroad 
may consist of any method used to join or fit together solid components, 
such as welding, soldering, riveting, force fitting, gluing, laminating, 
sewing, or the use of fasteners, and may be preceded, accompanied, or 
followed by operations incidental to the assembly as illustrated in 
paragraph (b) of this section. The mixing or combining of liquids, 
gases, chemicals, food ingredients, and amorphous solids with each other 
or with solid components is not regarded as an assembly.

    Example 1. A television yoke is assembled abroad from American-made 
magnet wire. In the foreign assembly plant the wire is despooled and 
wound into a coil, the wire cut from the spool, and the coil united with 
other components, including a terminal panel and housing which are also 
American-made. The completed article upon importation would be subject 
to the ad valorem rate of duty applicable to television parts upon the 
value of the yoke less the cost or value of the American-made wire, 
terminal panel and housing, assembled therein. The winding and cutting 
of the wire are either assembly steps or steps incidental to assembly.
    Example 2. An aluminum electrolytic capacitor is assembled abroad 
from American-made aluminum foil, paper, tape, and Mylar film. In the 
foreign assembly plant the aluminum foil is trimmed to the desired 
width, cut to the desired length, interleaved with paper, which may or 
may not be cut to length or despooled from a continuous length, and 
rolled into a cylinder wherein the foil and paper are cut and a section 
of sealing tape fastened to the surface to prevent these components from 
unwinding. Wire or other electric connectors are bonded at appropriate 
intervals to the aluminum foil of the cylinder which is then inserted 
into a metal can, and the ends closed with a protective washer. As 
imported, the capacitor is subject to the ad valorem rate of duty 
applicable to capacitors upon the value less the cost or value of the 
American-made foil, paper, tape, and Mylar film. The operations 
performed on these components are all either assembly steps or steps 
incidental to assembly.
    Example 3. The manufacture abroad of cloth on a loom using thread or 
yarn exported from the United States on spools, cops, or pirns is not 
considered an assembly but a weaving operation, and the thread or yarn 
does not qualify for the exemption. However, American-made thread used 
to sew buttons or garment components is qualified for the exemption 
because it is used in an operation involving the assembly of solid 
components.

    (b) Operations incidental to the assembly process. Operations 
incidental to the assembly process whether performed before, during, or 
after assembly, do not constitute further fabrication, and shall not 
preclude the application of the exemption. The following are examples of 
operations which are incidental to the assembly process:
    (1) Cleaning;

[[Page 98]]

    (2) Removal of rust, grease, paint, or other preservative coating;
    (3) Application of preservative paint or coating, including 
preservative metallic coating, lubricants, or protective encapsulation;
    (4) Trimming, filing, or cutting off of small amounts of excess 
materials;
    (5) Adjustments in the shape or form of a component to the extent 
required by the assembly being performed abroad;
    (6) Cutting to length of wire, thread, tape, foil, and similar 
products exported in continuous length; separation by cutting of 
finished components, such as prestamped integrated circuit lead frames 
exported in multiple unit strips; and
    (7) Final calibration, testing, marking, sorting, pressing, and 
folding of assembled articles.
    (c) Operations not incidental to the assembly process. Any 
significant process, operation, or treatment other than assembly whose 
primary purpose is the fabrication, completion, physical or chemical 
improvement of a component, or which is not related to the assembly 
process, whether or not it effects a substantial transformation of the 
article, shall not be regarded as incidental to the assembly and shall 
preclude the application of the exemption to such article. The following 
are examples of operations not considered incidental to the assembly as 
provided under subheading 9802.00.80, Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202):
    (1) Melting of exported ingots and pouring of the metal into molds 
to produce cast metal parts;
    (2) Cutting of garment parts according to pattern from exported 
material;
    (3) Painting primarily intended to enhance the appearance of an 
article or to impart distinctive features or characteristics;
    (4) Chemical treatment of components or assembled articles to impart 
new characteristics, such as showerproofing, permapressing, sanforizing, 
dying or bleaching of textiles;
    (5) Machining, polishing, burnishing, peening, plating (other than 
plating incidental to the assembly), embossing, pressing, stamping, 
extruding, drawing, annealing, tempering, case hardening, and any other 
operation, treatment or process which imparts significant new 
characteristics or qualities to the article affected.
    (d) Joining of American-made and foreign-made components. An 
assembly operation may involve the use of American-made components and 
foreign-made components. The various requirements for establishing 
entitlement to the exemption apply only to the American-made components 
of the assembly.

    Example. Diodes are assembled abroad from American-made components. 
The process includes the encapsulation of the assembled components in a 
plastic shell. The plastic used for the encapsulation is in the form of 
a pellet, and is of foreign origin. After the prefabricated diode 
components are assembled, the assembled unit is placed in a transfer 
molding machine, where, by use of the pellet, molten epoxy is caused to 
flow around the perimeters of the assembled components, forming upon 
solidification a plastic body for the diode. Upon importation, exemption 
may be granted for the value of the American-made components, but not 
for the value of the plastic pellet. If the plastic pellet used for 
encapsulation was of United States origin, its value would still be a 
part of the dutiable value of the diode, because the plastic pellet is 
not a fabricated component of a type designed to be fitted together by 
assembly, but merely a premeasured quantity of material which was 
applied to the assembled unit by a process not constituting an assembly.

    (e) Subassembly. An assembly operation may involve the joining or 
fitting of American-made components into a part or subassembly of an 
article, followed by the installation of the part or subassembly into 
the complete article.

    Example. Rolls of foil and rolls of paper are exported and cut to 
specific length abroad and interleaved and rolled to form the electrodes 
and dielectric of a capacitor. Following this procedure, the rolls are 
assembled with cans and other parts to form a complete capacitor. The 
foil and paper are entitled to the exemption.

    (f) Packing. The packing abroad of merchandise into containers does 
not in itself qualify either the containers or their contents for the 
exemption. However, assembled articles which otherwise qualify for the 
exemption and which are packaged abroad following their assembly will 
not be disqualified

[[Page 99]]

from the exemption by reason of their having been so packaged, whether 
for retail sale or for bulk shipment. The tariff status of the packing 
materials or containers will be determined in accordance with General 
Rule of Interpretation 5, HTSUS (19 U.S.C. 1202).

[T.D. 75-230, 40 FR 43023, Sept. 18, 1975, as amended by T.D. 89-1, 53 
FR 51248, Dec. 21, 1988]



Sec. 10.17  Valuation of exempted components.

    The value of fabricated components to be subtracted from the full 
value of the assembled article is the cost of the components when last 
purchased, f.o.b. United States port of exportation or point of border 
crossing as set out in the invoice and entry papers, or, if no purchase 
was made, the value of the components at the time of their shipment for 
exportation, f.o.b. United States port of exportation or point of border 
crossing, as set out in the invoice and entry papers. However, if the 
appraising officer concludes that the cost or value of the fabricated 
components so ascertained does not represent a reasonable cost or value, 
then the value of the components shall be determined in accordance with 
section 402 or section 402a, Tariff Act of 1930, as amended (19 U.S.C. 
1401a, 1402).

[T.D. 75-230, 40 FR 43024, Sept. 18, 1975]



Sec. 10.18  Valuation of assembled articles.

    As in the case of the appraisement of any other import merchandise 
(see subpart C of part 152 of this chapter), the full value of assembled 
articles imported under subheading 9802.00.80, Harmonized Tariff 
Schedule of the United States (HTSUS) (19 U.S.C. 1202), is determined in 
accordance with 19 CFR 152.100 et seq.

[T.D. 87-89, 52 FR 24445, July 1, 1987, as amended by T.D. 89-1, 53 FR 
51248, Dec. 21, 1988]



Sec. Sec. 10.19-10.20  [Reserved]



Sec. 10.21  Updating cost data and other information.

    When a claim for the exemption is predicated on estimated cost data 
furnished either in advance of or at the time of entry, this fact should 
be clearly stated in writing at the time of entry, and suspension of 
liquidation may be requested by the importer or his agent pending the 
furnishing of actual cost data. Actual cost data must be submitted as 
soon as accounting procedures permit. To insure that information used 
for Customs purposes is reasonably current, the importer shall 
ordinarily be required to furnish updated cost and assembly data at 
least every six months, regardless of whether he considers that 
significant changes have occurred. The 6-month period for the submission 
of updated cost or other data may be extended by the port director if 
such extension is appropriate for the type of merchandise involved, or 
because of the accounting period normally used in the trade, or because 
of other relevant circumstances.

[T.D. 75-230, 40 FR 43025, Sept. 18, 1975]



Sec. 10.23  Standards, quotas, and visas.

    All requirements and restrictions applicable to imported 
merchandise, such as labeling, radiation standards, flame-retarding 
properties, quotas, and visas, apply to assembled articles eligible for 
the exemption in the same manner as they would apply to all other 
imported merchandise.

[T.D. 75-230, 40 FR 43025, Sept. 18, 1975]



Sec. 10.24  Documentation.

    (a) Documents required. The following documents shall be filed in 
connection with the entry of assembled articles claimed to be subject to 
the exemption under subheading 9802.00.80, Harmonized Tariff Schedule of 
the United States (HTSUS) (19 U.S.C. 1202).
    (1) Declaration by the assembler. A declaration by the person who 
performed the assembly operations abroad shall be filed in substantially 
the following form:

    I, ----------, declare that to the best of my knowledge and belief 
the ---------- were assembled in whole or in part from fabricated 
components listed and described below, which are products of the United 
States:

[[Page 100]]



----------------------------------------------------------------------------------------------------------------
                                                             Unit value at
       Marks of                                             time and place   Port and date of
   identification,       Description of       Quantity      of export from      export from     Name and address
       numbers             component                         United States     United States    of manufacturer
                                                                  \1\
----------------------------------------------------------------------------------------------------------------
 
 
 
----------------------------------------------------------------------------------------------------------------
 \1\ In accordance with U.S. Note 4 to Subchapter II of Chapter 98, Harmonized Tariff Schedule of the United
  States (19 U.S.C. 1202).
Description of the operations performed abroad on the exported components (in sufficient detail to enable
  Customs officers to determine whether the operations performed are within the preview of subheading
  9802.00.80, Harmonized Tariff Schedule of the United States (19 U.S.C. 1202) (attach supplemental sheet if
  more space is required)):

________________________________________________________________________
Date Signature
________________________________________________________________________
Address Capacity

    (2) Endorsement by the importer. An endorsement, in substantially 
the following form, shall be signed by the importer:

    I declare that to the best of my knowledge and belief the (above), 
(attached) declaration, and any other information submitted herewith, or 
otherwise supplied or referred to, is correct in every respect and there 
has been compliance with all pertinent legal notes to the Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202).
________________________________________________________________________
Date Signature

________________________________________________________________________
Address Capacity

    (b) Revision of format. In specific cases, the port director may 
revise the format of either of the documents specified in paragraph (a) 
of this section and may make such changes as conditions warrant, 
provided the data and information required to be supplied in these 
documents are presented. For example, if the components were furnished 
by the importer, the information on components may be supplied as part 
of the importer's endorsement, rather than as part of the assembler's 
declaration.
    (c) Reference to previously filed documents. In lieu of filing 
duplicate lists of components and descriptions of assembly operations 
with each entry, the documents specified in paragraph (a) of this 
section may refer to assembly descriptions and lists of components 
previously filed with and approved by the port director, or to records 
showing costs, names of manufacturers, and other necessary data on 
components, provided the importer has arranged with the port director to 
maintain such records and keep them available for examination by 
authorized Customs officers.
    (d) Waiver of specific details for each entry. There are cases where 
large quantities of United States components are purchased from various 
sources or exported at various ports and dates on a continuing basis, so 
that it is impractical to identify the exact source, port and date of 
export for each particular component included in an entry of merchandise 
claimed to be subject to the exemption under subheading 9802.00.80, 
HTSUS (19 U.S.C. 1202). In these cases, specific details such as the 
port and date of export and the name of the manufacturer of the United 
States components may be waived if the port director is satisfied that 
the importer and assembler have established reliable controls to insure 
that all components for which the exemption is claimed are in fact 
products of the United States. These controls shall include strict 
physical segregation of United States and foreign components, as well as 
records of United States components showing quantities, sources, costs, 
dates shipped abroad, and other necessary information. These records 
shall be maintained by the importer and assembler for 5 years from the 
date of the released entry in a manner so that they are readily 
available for audit, inspection, copying, reproduction or other official 
use by authorized Customs officers.
    (e) Waiver of documents. When the port director is satisfied that 
unusual circumstances make the production of either or both of the 
documents specified in paragraph (a) of this section, or of any of the 
information set forth therein, impractical and is further satisfied that 
the requirements of subheading 9802.00.80, HTSUS, and related

[[Page 101]]

legal notes have been met, he may waive the production of such 
document(s) or information.
    (f) Unavailability of documents at time of entry. If either or both 
of the documents specified in paragraph (a) of this section are not 
available at the time of entry, a bond on Customs Form 301 containing 
the bond conditions set forth in Sec. 113.62 of this chapter for the 
production of the document(s) may be given pursuant to Sec. Sec. 
113.41--113.46 and 141.66 of this chapter.
    (g) Responsibility of correctness. Subject to the civil and criminal 
sanctions provided by law for false or fraudulent entries, the importer 
has the ultimate responsibility for supplying all information needed by 
the Customs Service to process an entry, and for the completeness and 
truthfulness of such information. If certain information cannot be 
supplied by the assembler, it must be provided by the importer.

[T.D. 75-230, 40 FR 43025, Sept. 18, 1975, as amended by T.D. 79-159, 44 
FR 31967, June 4, 1979; T.D. 84-213, 49 FR 41165, Oct. 19, 1984; T.D. 
89-1, 53 FR 51248, Dec. 21, 1988]



Sec. 10.25  Textile components cut to shape in the United States and 
assembled abroad.

    Where a textile component is cut to shape (but not to length, width, 
or both) in the United States from foreign fabric and exported to 
another country, territory, or insular possession for assembly into an 
article that is then returned to the United States and entered, or 
withdrawn from warehouse, for consumption on or after July 1, 1996, the 
value of the textile component shall not be included in the dutiable 
value of the article. For purposes of determining whether a reduction in 
the dutiable value of an imported article may be allowed under this 
section:
    (a) The terms ``textile component'' and ``fabric'' have reference 
only to goods covered by the definition of ``textile or apparel 
product'' set forth in Sec. 102.21(b)(5) of this chapter;
    (b) The operations performed abroad on the textile component shall 
conform to the requirements and examples set forth in Sec. 10.16 
insofar as they may be applicable to a textile component; and
    (c) The valuation and documentation provisions of Sec. Sec. 10.17, 
10.18, 10.21 and 10.24 shall apply.

[T.D. 95-69, 60 FR 46196, Sept. 5, 1995; T.D. 95-69, 60 FR 55995, Nov. 
6, 1995]



Sec. 10.26  Articles assembled or processed in a beneficiary country 

in whole of U.S. components or ingredients; articles assembled in a 
beneficiary country 
          from textile components cut to shape in the United States.

    (a) No article (except a textile article, apparel article, or 
petroleum, or any product derived from petroleum, provided for in 
heading 2709 or 2710, Harmonized Tariff Schedule of the United States 
(HTSUS)) shall be treated as a foreign article or as subject to duty:
    (1) If the article is assembled or processed in a beneficiary 
country in whole of fabricated components that are a product of the 
United States; or
    (2) If the article is processed in a beneficiary country in whole of 
ingredients (other than water) that are a product of the United States; 
and
    (3) Neither the fabricated components, materials or ingredients 
after their exportation from the United States, nor the article before 
its importation into the United States, enters into the commerce of any 
foreign country other than a beneficiary country.
    (b) No article (except a textile or apparel product) entered, or 
withdrawn from warehouse, for consumption on or after July 1, 1996, 
shall be treated as a foreign article or as subject to duty:
    (1) If the article is assembled in a beneficiary country in whole of 
textile components cut to shape (but not to length, width, or both) in 
the United States from foreign fabric; or
    (2) If the article is assembled in a beneficiary country in whole of 
both textile components described in paragraph (b)(1) of this section 
and components that are products of the United States; and
    (3) Neither the components after their exportation from the United 
States, nor the article before its importation into the United States, 
enters into the commerce of any foreign country other than a beneficiary 
country.
    (c) For purposes of this section:

[[Page 102]]

    (1) The terms ``textile article'', ``apparel article'', and 
``textile or apparel product'' cover all articles, other than footwear 
and parts of footwear, that are classifiable in an HTSUS subheading 
which carries a textile and apparel category number designation;
    (2) The term ``beneficiary country'' has the meaning set forth in 
Sec. 10.191(b)(1); and
    (3) A component, material, ingredient, or article shall be deemed to 
have not entered into the commerce of any foreign country other than a 
beneficiary country if:
    (i) The component, material, or ingredient was shipped directly from 
the United States to a beneficiary country, or the article was shipped 
directly to the United States from a beneficiary country, without 
passing through the territory of any non-beneficiary country; or
    (ii) Where the component, material, ingredient, or article passed 
through the territory of a non-beneficiary country while en route to a 
beneficiary country or the United States:
    (A) The invoices, bills of lading, and other shipping documents 
pertaining to the component, material, ingredient, or article show a 
beneficiary country or the United States as the final destination and 
the component, material, ingredient, or article was neither sold at 
wholesale or retail nor subjected to any processing or other operation 
in the non-beneficiary country; or
    (B) The component, material, ingredient, or article remained under 
the control of the customs authority of the non-beneficiary country and 
was not subjected to operations in that non-beneficiary country other 
than loading and unloading and activities necessary to preserve the 
component, material, ingredient, or article in good condition.

[T.D. 95-69, 60 FR 46197, Sept. 5, 1995]

     Free Entry--Articles for the Use of Foreign Military Personnel



Sec. 10.30c  [Reserved]

                    Temporary Importations Under Bond



Sec. 10.31  Entry; bond.

    (a)(1) Entry of articles brought into the United States temporarily 
and claimed to be exempt from duty under Chapter 98, Subchapter XIII, 
Harmonized Tariff Schedule of the United States (HTSUS), unless covered 
by an A.T.A. carnet or a TECRO/AIT carnet as provided in part 114 of 
this chapter, shall be made on Customs Form 3461 or 7533, supported by 
the documentation required by Sec. 142.3 of this chapter. However, when 
Sec. 10.36 or Sec. 10.36a is applicable, or the aggregate value of the 
article is not over $250, the form prescribed for the informal entry of 
importations by mail, in baggage, or by other means, may be used. When 
entry is made on Customs Form 3461 or 7533, an entry summary, Customs 
Form 7501, shall be filed within 10 days after time of entry, in 
accordance with subpart B, part 142 of this chapter.
    (2) If Customs Form 7501 is filed at time of entry, it shall serve 
as both the entry and entry summary, and Customs Form 3461 or 7533 shall 
not be required. Customs Form 7501 shall be in original only, except for 
entries under subheading 9813.00.05, HTSUS, which require a duplicate 
copy for statistical purposes. When articles are entered under an A.T.A. 
carnet or a TECRO/AIT carnet, the importation voucher of the carnet 
shall serve as the entry.
    (3) In addition to the data usually shown on a regular consumption 
entry summary, each temporary importation bond entry summary shall 
include:
    (i) The HTSUS subheading number under which entry is claimed.
    (ii) A statement of the use to be made of the articles in sufficient 
detail to enable the port director to determine whether they are 
entitled to entry as claimed, and
    (iii) A declaration that the articles are not to be put to any other 
use and that they are not imported for sale or sale on approval.
    (b) The port director, if he is satisfied as to the importer's 
identity and good faith, may admit a vehicle or craft brought in by a 
nonresident to take part in a race or other specific contest for which 
no money purse is awarded, under the provisions of subheading 
9813.00.35, HTSUS, without formal entry or security for exportation. If 
at the time of arrival it appears that the article is likely to remain 
in the

[[Page 103]]

United States beyond 90 days, formal entry and bond shall be taken.
    (c) When any article has been admitted without formal entry or 
security for exportation and the importer thereafter desires to prolong 
his stay beyond 90 days, an entry covering the article and security for 
its exportation shall be accepted at any port where the article may be 
presented for entry. The time during which the imported article may 
remain in the United States under the entry shall be computed from the 
date of its original arrival in the United States. The estimated duties 
for the purpose of fixing the amount of any bond required by paragraph 
(f) of this section shall be the estimated duties which would have been 
required to be deposited had the article been entered under an ordinary 
consumption entry on the date of the original arrival.
    (d) [Reserved]
    (e) The entry or invoice shall: (1) Describe each article in detail; 
(2) set forth the value of each article; and (3) set forth any marks or 
numbers thereon or other distinguishing features thereof. In the case of 
a vehicle, aircraft, or pleasure boat entered under subheading 
9813.00.05, HTSUS and Sec. 10.36a, the registration number, and engine 
or motor number, and the body number (if available) shall also be shown 
on the entry. Examination of the imported articles shall be made 
whenever the circumstances warrant, and occasionally in any event to an 
extent which will enable the Customs officer to determine that the 
importation is in agreement with the invoice or entry as to identity and 
quantity and for the purpose of accepting the entry under the applicable 
provisions of Chapter 98, Subchapter XIII, HTSUS. No examination for the 
purpose of appraisement and no appraisement of the articles shall be 
made.
    (f) With the exceptions stated herein, a bond shall be given on 
Customs Form 301, containing the bond conditions set forth in Sec. 
113.62 of this chapter, in an amount equal to double the duties, 
including fees, which it is estimated would accrue (or such larger 
amount as the port director shall state in writing or by the electronic 
equivalent to the entrant is necessary to protect the revenue) had all 
the articles covered by the entry been entered under an ordinary 
consumption entry. In the case of samples solely for use in taking 
orders entered under subheading 9813.00.20, HTSUS, motion-picture 
advertising films entered under subheading 9813.00.25, HTSUS, and 
professional equipment, tools of trade and repair components for such 
equipment or tools entered under subheading 9813.00.50, HTSUS, the bond 
required to be given shall be in an amount equal to 110 percent of the 
estimated duties, including fees, determined at the time of entry. If 
appropriate a carnet, under the provisions of part 114 of this chapter, 
may be filed in lieu of a bond on Customs Form 301 (containing the bond 
conditions set forth in Sec. 113.62 of this chapter). Cash deposits in 
the amount of the bond may be accepted in lieu of sureties. When the 
articles are entered under subheading 9813.00.05, 9813.00.20, or 
9813.00.50, HTSUS without formal entry, as provided for in Sec. Sec. 
10.36 and 10.36a, or the amount of the bond taken under any subheading 
of Chapter 98, Subchapter XIII, HTSUS, is less than $25, the bond shall 
be without surety or cash deposit, and the bond shall be modified to so 
indicate. In addition, notwithstanding any other provision of this 
paragraph, in the case of professional equipment necessary for carrying 
out the business activity, trade or profession of a business person, 
equipment for the press or for sound or television broadcasting, 
cinematographic equipment, articles imported for sports purposes and 
articles intended for display or demonstration, if brought into the 
United States by a resident of Canada, Mexico or Chile and entered under 
Chapter 98, Subchapter XIII, HTSUS, no bond or other security will be 
required if the entered article is a good originating in Canada, Mexico 
or Chile within the meaning of General Note 12 or 26, HTSUS.
    (g) Claim for free entry under Chapter 98, Subchapter XIII, HTSUS 
may be made for articles of any character described therein which have 
been previously entered under any other provision of law and the entry 
amended accordingly upon compliance with the requirements of this 
section, provided the articles have not been released from Customs 
custody, or even though

[[Page 104]]

released from Customs custody if it is established that the original 
entry was made on the basis of a clerical error, mistake of fact, or 
other inadvertence within the meaning of section 520(c)(1), Tariff Act 
of 1930, as amended, and was brought to the attention of the Customs 
Service within the time limits of that section. If an entry is so 
amended, the period of time during which the merchandise may remain in 
the Customs territory of the United States under bond shall be computed 
from the date of importation. In the case of articles covered by an 
informal mail entry, such a claim may be made within a reasonable time 
either before or after the articles have been released from Customs 
custody.
    (h) After the entry and bond have been accepted, the articles may be 
released to the importer. The entry shall not be liquidated as the 
transaction does not involve liquidated duties. However, a TIB importer 
may be required to file an entry for consumption and pay duties, or pay 
liquidated damages under its bond for a failure to do so, in the case of 
merchandise imported under subheading 9813.00.05, HTSUS, and 
subsequently exported to Canada or Mexico (see Sec. 181.53 of this 
chapter).

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 66-39, 31 FR 2817, Feb. 
17, 1966; T.D. 69-146, 34 FR 9798, June 25, 1969; T.D. 70-89, 35 FR 
6002, Apr. 11, 1970; T.D. 79-221, 44 FR 46813, Aug. 9, 1979; 44 FR 
51567, Sept. 4, 1979; T.D. 80-26, 45 FR 3901, Jan. 21, 1980; T.D. 84-
213, 49 FR 41165, Oct. 19, 1984; T.D. 89-1, 53 FR 51248, Dec. 21, 1988; 
T.D. 94-1, 58 FR 69470, Dec. 30, 1993; T.D. 95-22, 60 FR 14632, Mar. 20, 
1995; T.D. 96-14, 61 FR 2910, Jan. 30, 1996; T.D. 98-10, 63 FR 4167, 
Jan. 28, 1998; T.D. 01-14, 66 FR 8767, Feb. 2, 2001; CBP Dec. 05-07, 70 
FR 10872, Mar. 7, 2005]



Sec. 10.33  Theatrical effects.

    For purposes of the entry of theatrical scenery, properties and 
apparel under subheading 9817.00.98, Harmonized Tariff Schedule of the 
United States:
    (a) Animals imported for use or exhibition in theaters or menageries 
may be classified as theatrical properties; and
    (b) The term ``theatrical scenery, properties and apparel'' shall 
not be construed to include motion-picture films.

For provisions relating to the return without formal entry of theatrical 
effects taken from the United States, see Sec. 10.68 of this part.

[T.D. 92-85, 57 FR 40605, Sept. 4, 1992, as amended by CBP Dec. 04-28, 
69 FR 52599, Aug. 27, 2004]



Sec. 10.35  Models of women's wearing apparel.

    (a) Models of women's wearing apparel admitted under subheading 
9813.00.10, Harmonized Tariff Schedule of the United States (HTSUS), 
shall not be removed from the importer's establishment for reproducing, 
copying, painting, sketching, or for any other use by others, nor be 
used in the importer's establishment for such purposes except by the 
importer or his employees.
    (b) Invoices covering models of women's wearing apparel entered 
under subheading 9813.00.10 or 9813.00.25, HTSUS shall state the kind 
and color of the principal material from which the apparel is made, and 
shall contain a description of the lining and the trimming, stating 
whether composed of fur, lace, embroidery, or other material. Invoices 
shall also contain a statement as to how the trimming is applied, that 
is, whether on the cuffs, collar, sleeves, or elsewhere, and the total 
value of each completed garment or article.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 87-75, 52 FR 20066, May 
29, 1987; T.D. 89-1, 53 FR 51248, Dec. 21, 1988]



Sec. 10.36  Commercial travelers' samples; professional equipment and 
tools of trade; theatrical effects and other articles.

    (a) Samples accompanying a commercial traveler who presents an 
adequate descriptive list or a special Customs invoice, and professional 
equipment, tools of trade, and repair components for such equipment or 
tools imported in his baggage for his own use by a nonresident 
sojourning temporarily in the United States may be entered on the 
importer's baggage declaration in lieu of formal entry and examination 
and may be passed under subheadings 9813.00.20 or 9813.00.50, Harmonized 
Tariff Schedule of the United States, (HTSUS), at the place of arrival

[[Page 105]]

in the same manner as other passengers' baggage. The examination may be 
made by an inspector who is qualified, in the opinion of the port 
director, to determine the amount of the bond required by Sec. 10.31(c) 
to be filed in support of the entry. If the articles are a commercial 
traveler's samples and exceed $500 in value, a special Customs invoice 
or a descriptive list shall be furnished.
    (b) When the proprietor or manager of a theatrical exhibition 
arriving from abroad who has entered his scenery, properties, and 
apparel under subheading 9813.00.65, HTSUS, contemplates side trips to a 
contiguous country with the exhibition within the period of time during 
which the merchandise may remain in the Customs territory of the United 
States under bond, including any lawful extension, a copy of the entry 
covering the effects and a copy of a descriptive list of such effects or 
invoice furnished by him may be certified by the examining officer and 
returned to the proprietor or manager for use in registering the effects 
with the Customs officers at the port of exit, and in clearing them 
through Customs on his return. Cancellation of the bond shall be 
effected by exportation in accordance with the provisions of Sec. 10.38 
at the time the theatrical effects are finally taken out of the United 
States before the expiration of the period of time during which the 
merchandise may remain in the Customs territory of the United States 
under bond, including any lawful extension. Similar treatment may be 
accorded articles entered under other subheadings in chapter 98, 
subchapter XIII, HTSUS, upon approval by Headquarters, U.S. Customs 
Service.
    (c) When a commercial traveler contemplates side trips to a 
contiguous country within the period of time during which the 
merchandise may remain in the Customs territory of the United States 
under bond, including any lawful extension, a copy of his baggage 
declaration and a copy of the descriptive list or special Customs 
invoice furnished by him may be certified by the examining officer and 
returned to the traveler for use in registering the samples with Customs 
officers at the port of exit, and in clearing them through Customs upon 
his return. Cancellation of the bond shall be effected by exportation in 
accordance with the provisions of Sec. 10.38 at the time the samples 
are finally taken out of the United States before the expiration of the 
period of time during which the merchandise may remain in the Customs 
territory of the United States under bond, including any lawful 
extension.
    (d) The privilege of clearance of commercial travelers' samples or 
professional equipment, tools of trade, and repair components for such 
equipment or tools imported for his own use by a nonresident sojourning 
temporarily in the United States on a baggage declaration under bond 
without surety or cash deposit shall not be accorded to a commercial 
traveler or such nonresident who, through fraud or culpable negligence, 
has failed to comply with the provisions of such a bond in connection 
with a prior arrival.

Such a commercial traveler or nonresident shall be required to file a 
formal entry under subheading 9813.00.20 or subheading 9813.00.50, HTSUS 
with a bond supported by a surety or cash deposit in lieu of surety.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 69-146, 34 FR 9799, June 
25, 1969; T.D. 84-213, 49 FR 41165, Oct. 19, 1984; T.D. 89-1, 53 FR 
51248, Dec. 21, 1988]



Sec. 10.36a  Vehicles, pleasure boats and aircraft brought in for 
repair or alteration.

    (a) A vehicle (such as an automobile, truck, bus, motorcycle, 
tractor, trailer), pleasure boat, or aircraft brought into the United 
States by an operator of such vehicle, pleasure boat, or aircraft for 
repair or alteration (as defined in Sec. Sec. 10.8, 10.490 and 181.64 
of this chapter) may be entered on the operator's baggage declaration, 
in lieu of formal entry and examination, and may be passed under 
subheading 9813.00.05, Harmonized Tariff Schedule of the United States 
(HTSUS), at the place of arrival in the same manner as passengers' 
baggage. When the vehicle, aircraft, or pleasure boat to be entered is 
being towed by or transported on another vehicle, the operator of the 
towing or transporting vehicle may make entry for the vehicle, aircraft 
or pleasure boat to be repaired or altered. The

[[Page 106]]

bond, prescribed by Sec. 10.31(f), filed to support entry under this 
section shall be without surety or cash deposit except as provided by 
this paragraph and paragraph (d) of this section. The examination may be 
made by an inspector who is qualified to determine the amount of such 
bond to be filed in support of the entry. The privilege accorded by this 
paragraph shall not apply when two or more vehicles, pleasure boats, or 
aircraft are to be entered by the same importer under subheading 
9813.00.05, HTSUS, at the same time. In that event, the importer must 
file a formal entry supported by bond with surety or cash deposit in 
lieu of surety.
    (b) Each vehicle, pleasure boat, or aircraft to which paragraph (a) 
of this section is applicable shall be identified on the operator's 
baggage declaration, which must include the data prescribed in 
paragraphs (a) and (e) of Sec. 10.31.
    (c) Exportation shall be effected in accordance with the provisions 
of Sec. 10.38.
    (d) The privilege of clearance of a vehicle, pleasure boat, or 
aircraft brought in by the operator of such vehicle, pleasure boat, or 
aircraft, for repair or alteration on his baggage declaration under bond 
without surety or cash deposit shall not be granted to an individual who 
has failed to comply with the provisions of such a bond in connection 
with any prior arrival. Such individual shall be required to file a 
formal entry under subheading 9813.00.05, HTSUS, with a bond supported 
by a surety or cash deposit in lieu of surety.

[T.D. 66-39, 31 FR 2817, Feb. 17, 1966, as amended by T.D. 84-213, 49 FR 
41165, Oct. 19, 1984; T.D. 89-1, 53 FR 51248, Dec. 21, 1988; T.D. 94-1, 
58 FR 69470, Dec. 30, 1993; CBP Dec. 05-07, 70 FR 10872, Mar. 7, 2005]



Sec. 10.37  Extension of time for exportation.

    The period of time during which merchandise entered under bond under 
chapter 98, subchapter XIII, Harmonized Tariff Schedule of the United 
States (19 U.S.C. 1202), may remain in the Customs territory of the 
United States, may be extended for not more than two further periods of 
1 year each, or such shorter period as may be appropriate. Extensions 
may be granted by the director of the port where the entry was filed 
upon written application on Customs Form 3173, provided the articles 
have not been exported or destroyed before the receipt of the 
application, and liquidated damages have not been assessed under the 
bond before receipt of the application. Any untimely request for an 
extension of time for exportation shall be referred to the Director, 
Commercial Rulings Division, Customs Headquarters, for disposition. Any 
request for relief from a liquidated damage assessment in excess of a 
Fines, Penalties, and Forfeitures Officer's delegated authority shall be 
referred to the Director, International Trade Compliance Division, 
Customs Headquarters, for disposition. No extension of the period for 
which a carnet is valid shall be granted.

[T.D. 69-146, 34 FR 9799, June 25, 1969, as amended by T.D. 84-213, 49 
FR 41165, Oct. 19, 1984; T.D. 89-1, 53 FR 51249, Dec. 21, 1988; T.D. 91-
77, 56 FR 46114, Sept. 10, 1991; T.D. 99-27, 64 FR 13675, Mar. 22, 1999]



Sec. 10.38  Exportation.

    (a) Articles entered under chapter 98, subchapter XIII, Harmonized 
Tariff Schedule of the United States (HTSUS) (19 U.S.C. 1202) may be 
exported at the port of entry or at another port. An application on 
Customs Form 3495 shall be filed in duplicate with the port director a 
sufficient length of time in advance of exportation to permit the 
examination and identification of the articles if circumstances warrant 
such action and, in such event, the applicant shall be notified on a 
copy of Customs Form 3495 where the articles are to be sent for 
identification. If a carnet was used for entry purposes, the 
reexportation voucher of the carnet shall be filed, in addition to 
Customs Form 3495, and the carnet shall be presented for certification.
    (b) All expenses in connection with the delivery of the articles for 
examination, the cording and sealing of such articles, and their 
transfer for exportation shall be paid by the parties in interest.
    (c) If exportation is to be made at a port other than the one at 
which the merchandise was entered, the application on Customs Form 3495 
shall be

[[Page 107]]

filed in triplicate. There shall also be filed with the application a 
certified copy of the import entry or a certified copy of the invoice 
used on entry.
    (d) If the goods are examined at one port and are to be exported 
from another port, they shall be forwarded to the port of exportation 
under a transportation and exportation entry. In such cases Customs Form 
3495 shall be filed in triplicate. Articles entered under a carnet shall 
not be examined elsewhere than at the port from which they are to be 
exported.
    (e) If the articles are to be exported by mail or parcel post, the 
package containing the articles must be mailed under Customs supervision 
after examination. Waiver of the right to withdraw the package from the 
mails shall be endorsed on each package to be so exported and signed by 
the exporter.
    (f) Whenever the circumstances warrant, and occasionally in any 
event, port directors shall cause the fact of exportation to be verified 
by the Office of Enforcement in harmony with the procedures provided for 
in Sec. Sec. 18.7 and 191.61 of this chapter.
    (g) Upon the presentation of satisfactory evidence to the director 
of the port at which samples were entered under subheading 9813.00.20, 
HTSUS, or professional equipment or tools of trade were entered under 
subheading 9813.00.50, HTSUS, that such articles cannot be exported for 
the reason that they have been seized (other than by seizure at the suit 
of private persons), the requirement of exportation shall be suspended 
for the duration of the seizure. The articles shall be exported promptly 
after release from seizure.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 69-146, 34 FR 9799, June 
25, 1969; T.D. 83-212, 48 FR 46771, Oct. 14, 1983; T.D. 84-213, 49 FR 
41165, Oct. 19, 1984; T.D. 89-1, 53 FR 51249, Dec. 21, 1988; T.D. 91-77, 
56 FR 46114, Sept. 10, 1991; T.D. 98-16, 63 FR 11004, Mar. 5, 1998]



Sec. 10.39  Cancellation of bond charges.

    (a) Charges against bonds taken pursuant to Chapter 98, Subchapter 
XIII, Harmonized Tariff Schedule of the United States, (HTSUS), may be 
canceled in the manner prescribed in Sec. 113.55 of this chapter. A 
completed reexportation counterfoil on a carnet establishes that the 
articles covered by the carnet have been exported, and no claim shall be 
brought against the guaranteeing association under the carnet for 
failure to export, except under the provisions of Sec. 114.26 of this 
chapter. In the case of articles entered under subheading 9813.00.30, 
HTSUS, which are destroyed because of their use for the purposes of 
importation, the bond charge shall not be canceled unless there is 
submitted to the port director a certificate of the importer that the 
articles were destroyed during the course of a specifically described 
use, and the port director is satisfied that the articles were so 
destroyed as articles of commerce within the period of time during which 
the articles may remain in the Customs territory of the United States 
under bond (including any lawful extension). Bonds covering articles 
entered under other provisions of law shall not be canceled upon proof 
of destruction, except as provided for in paragraph (c) of this section, 
unless the articles are destroyed under Customs supervision in 
accordance with section 557, Tariff Act of 1930, as amended, and Sec. 
158.43 of this chapter.
    (b) Where exportation has been made at a port other than the port of 
entry, the bond may be canceled upon the certificate of lading received 
from the port of exportation, showing that such exportation was made 
within the period of time during which the articles may remain in the 
Customs territory of the United States under bond. In addition, the port 
director may require the production of a landing certificate signed by a 
revenue officer of the country to which the merchandise is exported.
    (c) When articles entered temporarily free of duty under bond are 
destroyed within the bond period by death, accidental fire, or other 
casualty, petition for relief from liability under the bond shall be 
made to the United States Customs Service. The petition shall be 
accompanied by a statement of the importer, or other person having 
knowledge of the facts, setting forth the circumstances of the 
destruction of the articles.
    (d)(1) If any article entered under Chapter 98, subchapter XIII, 
HTSUS, except those entered under a carnet, has not been exported or 
destroyed in

[[Page 108]]

accordance with the regulations in this part within the period of time 
during which the articles may remain in the Customs territory of the 
United States under bond (including any lawful extension), the Fines, 
Penalties, and Forfeitures Officer shall make a demand in writing under 
the bond for the payment of liquidated damages equal to double the 
estimated duties applicable to such entry, unless a different amount is 
prescribed by Sec. 10.31(f). The demand shall include a statement that 
a written petition for relief from the payment of the full liquidated 
damages may be filed with the Fines, Penalties, and Forfeitures Officer 
within 60 days after the date of the demand. For purposes of this 
section, the term estimated duties shall include any merchandise 
processing fees applicable to such entry.
    (2) If articles entered under a carnet have not been exported or 
destroyed in accordance with the regulations in this part within the 
carnet period, the port director shall promptly after expiration of that 
period make demand in writing upon the importer and guaranteeing 
association for the payment of liquidated damages in the amount of 110 
percent of the estimated duties on the articles not exported or 
destroyed. The guaranteeing association shall have a period of 6 months 
from the date of claim in which to furnish proof of the exportation or 
destruction of the articles under conditions set forth in the Convention 
or Agreement under which the carnet is issued. If such proof is not 
furnished within the 6-month period, the guaranteeing association shall 
forthwith pay the liquidated damages provided for above. The payment 
shall be refunded if the guaranteeing association within 3 months from 
the date of payment furnishes the proof referred to above. No claim for 
payment under a carnet covering a temporary importation may be made 
against the guaranteeing association more than 1 year after the 
expiration of the period for which the carnet was valid.
    (3) Demand for return to Customs custody. When the demand for return 
to Customs custody is made in the case of merchandise entered under 
Chapter 98, subchapter XIII, HTSUS (19 U.S.C. 1202), liquidated damages 
in an amount equal to double the estimated duties on the merchandise not 
returned shall be demanded, except that in the case of samples solely 
for use in taking orders, motion-picture advertising films, professional 
equipment, tools of trade, and repair components for professional 
equipment and tools of trade, the liquidated damages demanded shall be 
in an amount equal to 110 percent of the estimated duties.
    (e) If there has been a default with respect to any or all of the 
articles covered by the bond and a written petition for relief is filed 
as provided in part 172 of this chapter, it will be reviewed by the 
Fines, Penalties, and Forfeitures Officer having jurisdiction in the 
port where the entry was filed. If the Fines, Penalties, and Forfeitures 
Officer is satisfied that the importation was properly entered under 
Chapter 98, subchapter XIII, and that there was no intent to defraud the 
revenue or delay the payment of duty, the Fines, Penalties, and 
Forfeitures Officer may cancel the liability for the payment of 
liquidated damages in any case in his or her delegated authority as 
follows:
    (1) If evidence is furnished which satisfies the Fines, Penalties, 
and Forfeitures Officer that the article would have been entitled to 
free entry as domestic products exported and returned had the evidence 
been furnished at the time of entry, without the collection of 
liquidated damages.
    (2) If the article has been exported or destroyed under Customs 
supervision but not within the period of time during which the articles 
may remain in the Customs territory of the United States under bond, 
upon the payment of such lesser amount as the port director may deem 
appropriate under the law and in view of the circumstances, or without 
the collection of liquidated damages if the Fines, Penalties, and 
Forfeitures Officer is satisfied that the delay in exportation or 
destruction was for the benefit of the United States or was occasioned 
wholly by circumstances reasonably beyond the control of the parties 
concerned and which could not have been anticipated by a reasonably 
prudent person.

[[Page 109]]

    (3) If the article was exported or destroyed within the period of 
time during which the articles may remain in the Customs territory of 
the United States under bond but not under Customs supervision and 
satisfactory documentary evidence of actual exportation, such as a 
foreign landing certificate, or of death or other complete destruction, 
such as a veterinarian's certificate or certificates of two 
disinterested witnesses, are furnished together with a complete 
explanation by the applicant of the failure to obtain Customs 
supervision, upon the payment of such lesser amount as the Fines, 
Penalties, and Forfeitures Officer may deem appropriate under the law 
and in view of the circumstances, or without the collection of 
liquidated damages if the port director is satisfied that the 
merchandise was destroyed under circumstances which precluded any 
arrangement to obtain Customs supervision. Satisfactory documentary 
evidence of exportation, in the case of carnets, would include the 
particulars regarding importation or reimportation entered in the carnet 
by the Customs authorities of another contracting party, or a 
certificate with respect to importation or reimportation issued by those 
authorities, based on the particulars shown on a voucher which was 
detached from the carnet on importation or reimportation into their 
territory, provided it is shown that the importation or reimportation 
took place after the exportation which it is intended to establish.
    (4) Upon the payment of an amount equal to double the duty which 
would have accrued on the articles had they been entered under an 
ordinary consumption entry, or equal to 110 percent of such duties where 
that percentage is prescribed in Sec. 10.31(f), if such amount is 
determined to be less than the full amount of the bond.
    (f) Anticipatory breach. If an importer anticipates that the 
merchandise entered under a Temporary Importation Bond will not be 
exported or destroyed in accordance with the terms of the bond, the 
importer may indicate to Customs in writing before the bond period has 
expired of the anticipatory breach. At the time of written notification 
of the breach, the importer shall pay to Customs the full amount of 
liquidated damages that would be assessed at the time of breach of the 
bond, and the entry will be closed. The importer shall notify the surety 
in writing of the breach and payment. By this payment, the importer 
waives his right to receive a notice of claim for liquidated damages as 
required by Sec. 172.1(a) of this chapter.
    (g) If the petitioner is not satisfied with the port director's 
action under this section and submits a supplemental petition, both the 
original and the supplemental petitions shall be transmitted to the 
designated Headquarters official with a full report on the case.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 69-146, 34 FR 9799, June 
25, 1969; T.D. 70-249, 35 FR 18265, Dec. 1, 1970; T.D. 71-70, 36 FR 
4485, Mar. 6, 1971; T.D. 73-308, 38 FR 30549, Nov. 6, 1973; T.D. 74-227, 
39 FR 32015, Sept. 4, 1974; T.D. 75-36, 40 FR 5146, Feb. 4, 1975; T.D. 
84-213, 49 FR 41165, Oct. 19, 1984; T.D. 89-1, 53 FR 51249, Dec. 21, 
1988; T.D. 91-71, 56 FR 40779, Aug. 16, 1991; T.D. 95-22, 60 FR 14632, 
Mar. 20, 1995; T.D. 98-10, 63 FR 4167, Jan. 28, 1998; T.D. 99-27, 64 FR 
13675, Mar. 22, 1999; T.D. 00-57, 65 FR 53574, Sept. 5, 2000]



Sec. 10.40  Refund of cash deposits.

    (a) When a cash deposit is made in lieu of surety, it shall be 
refunded to the person in whose name the entry is made upon exportation 
in compliance with Sec. 10.38.
    (b) If any article entered under Chapter 98, subchapter XIII, 
Harmonized Tariff Schedule of the United States, is not exported or 
destroyed within the period of time during which articles may remain in 
the Customs territory of the United States under bond (including any 
lawful extension), the port director shall notify the importer in 
writing that the entire cash deposit will be transferred to the regular 
account as liquidated damages unless a written application for relief 
from the payment of the full liquidated damages is filed with the port 
director within 60 days after the date of the notice. If such an 
application is timely filed, the transfer of the cash deposit to the 
regular account as liquidated damages shall be deferred pending the 
decision of the Headquarters, U.S. Customs

[[Page 110]]

Service or, in appropriate cases, the port director on the application.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 84-213, 49 FR 41165, 
Oct. 19, 1984; T.D. 89-1, 53 FR 41249, Dec. 21, 1988]

                          International Traffic



Sec. 10.41  Instruments; exceptions.

    (a) Locomotives and other railroad equipment, trucks, buses, 
taxicabs, and other vehicles used in international traffic shall be 
subject to the treatment provided for in part 123 of this chapter.
    (b) [Reserved]
    (c) Foreign-owned aircraft arriving in the United States shall be 
subject to the treatment provided for in part 122 of this chapter, 
unless entered under the provisions of Sec. Sec. 10.31, 10.183, or 
paragraph (d) of this section.
    (d) Any foreign-owned locomotive or other railroad equipment, truck, 
bus, taxicab, or other vehicle, aircraft, or undocumented boat brought 
into the United States for the purpose of carrying merchandise or 
passengers between points in the United States for hire or as an element 
of a commercial transaction, except as provided at Sec. Sec. 123.12 (a) 
and (b), 123.14(c), and 141.4(b)(4), is subject to treatment as an 
importation of merchandise from a foreign country and a regular entry 
for such vehicle, aircraft or boat will be made. The use of any such 
vehicle, aircraft, or boat without a proper entry having been made may 
result in liabilities being incurred under section 592, Tariff Act of 
1930, as amended (19 U.S.C. 1592).
    (e) [Reserved]
    (f) Material for the maintenance or repair of international cables 
under the high seas, if requiring storage in special tanks for 
preservation, may be placed in tanks specially bonded for the purpose 
and withdrawn therefrom for high-seas installation without the payment 
of duty and without limitation of the storage period to the usual 3-year 
warehousing period. International cables laid under the territorial 
waters of the United States but not brought on shore in the United 
States shall be admitted without entry or the payment of duty. With 
respect to international cables laid under the territorial waters of the 
United States but brought on shore in the United States, only that part 
of the cable in the United States between the point of entry into the 
territorial waters of the United States and the first point of support 
on land in the United States shall be admitted without the payment of 
duty.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 70-121, 35 FR 8222, May 
26, 1970; T.D. 79-160, 44 FR 31956, June 4, 1979; T.D. 84-109, 49 FR 
19450, May 8, 1984; T.D. 88-12, 53 FR 9315, Mar. 22, 1988; T.D. 93-66, 
58 FR 44130, Aug. 19, 1993; T.D. 99-79, 64 FR 61205, Nov. 10, 1999]



Sec. 10.41a  Lift vans, cargo vans, shipping tanks, skids, pallets, 
and similar instruments of international traffic; repair components.

    (a)(1) Lift vans, cargo vans, shipping tanks, skids, pallets, caul 
boards, and cores for textile fabrics, arriving (whether loaded or 
empty) in use or to be used in the shipment of merchandise in 
international traffic are hereby designated as ``instruments of 
international traffic'' within the meaning of section 322(a), Tariff Act 
of 1930, as amended. The Commissioner of Customs is authorized to 
designate as instruments of international traffic, in decisions to be 
published in the weekly Customs Bulletin, such additional articles or 
classes of articles as he shall find should be so designated. Such 
instruments may be released without entry or the payment of duty, 
subject to the provisions of this section.
    (2) Repair components, accessories, and equipment for any container 
of foreign production which is an instrument of international traffic 
may be entered or withdrawn from warehouse for consumption without the 
deposit of duty if the person making the entry or withdrawal from 
warehouse files a declaration that the repair component was imported to 
be used in the repair of a container of foreign production which is an 
instrument of international traffic, or that the accessory or equipment 
is for a container of foreign production which is an instrument of 
international traffic. The port director must be satisfied that the 
importer of the repair component, accessory, or equipment had the 
declared intention at the time of importation.

[[Page 111]]

    (3) As used in this section, ``instruments of international 
traffic'' includes the normal accessories and equipment imported with 
any such instrument which is a ``container'' as defined in Article 1 of 
the Customs Convention on Containers.
    (b) The reexportation of a container, as defined in Article 1 of the 
Customs Convention on Containers, which has become badly damaged, shall 
not be required in the case of a duly authenticated accident if the 
container (1) is subjected to applicable import duties and import taxes, 
or (2) is abandoned free of all expense to the Government or destroyed 
under Customs supervision at the expense of the parties concerned, 
following the procedure outlined in Sec. 158.43(c) of this chapter. Any 
salvaged parts and materials shall be subjected to applicable import 
duties and import taxes. Replaced parts which are not reexported shall 
be subjected to import duties and import taxes except where abandoned 
free of expense to the Government or destroyed under Customs supervision 
at the expense of the parties concerned.
    (c) The instruments of international traffic designated in paragraph 
(a) of this section may be released in accordance with the provisions of 
that paragraph only after the applicant for such release has filed a 
bond on Customs Form 301, containing the bond conditions set forth in 
Sec. 113.66 of this chapter. The required application may be filed at 
the port of arrival or at a subsequent port to which an instrument shall 
have been transported in bond or to which a container shall have been 
moved under cover of a TIR carnet (see part 114 of this chapter) showing 
the characteristics and value of the container on the Goods Manifest of 
the carnet. If the container is listed on the Goods Manifest of the 
carnet, the application may be filed at the port of arrival or at the 
subsequent port. If the container is not listed on the Goods Manifest, 
the application shall be filed at the port of arrival. When the 
application is filed at a port other than the port at which the bond is 
on file, the following procedure applies:
    (1) When the application is filed before the fact of approval of the 
applicant's bond has been established, the applicant must submit with 
the application, or the Customs officer to whom the application is made 
must obtain, evidence that a current bond is on file at another port. 
That evidence may consist of a certified copy of the bond, or any other 
evidence which will satisfy the Customs officer to whom the application 
is made that a current bond is on file at another port.
    (2) If the application is filed after the fact of approval of the 
applicant's bond has been established, a certified copy of that bond 
need not be filed at the port of release. Upon determination by the 
appropriate Customs officer that the fact of approval of the applicant's 
bond has been established, and the bond has not been subsequently 
discontinued, the instruments of international traffic will be released 
as provided for in paragraph (a) of this section.
    (3) Upon the request of the applicant, the appropriate Customs 
officer at the port at which the instruments of international traffic 
are to be released will determine whether or not the fact of approval of 
the applicant's bond has been established. If the approval has not been 
established, the Customs officer with whom the application has been 
filed will advise the applicant of the nature of the evidence required 
to establish the fact that a current bond is on file at another port.
    (d) If an instrument of foreign origin, or of United States origin 
which has been increased in value or improved in condition by a process 
of manufacture or other means while abroad, is released under this 
section and is subsequently diverted to point-to-point local traffic 
within the United States, or is otherwise withdrawn in the United States 
from its use as an instrument of international traffic, it becomes 
subject to entry and the payment of any applicable duties. An instrument 
of United States origin which has not been increased in value or 
improved in condition by a process of manufacture or other means while 
abroad and which is released under this section shall not be subject to 
entry or the payment of duty if it is so diverted or otherwise 
withdrawn.
    (e) The person who filed the application for release under paragraph 
(a)(1)

[[Page 112]]

of this section shall promptly notify a director of a port of entry in 
the United States as defined in Section 401(k), Tariff Act of 1930, as 
amended, (1) that the container is to be abandoned or destroyed, as 
described in paragraph (b) of this section, or (2) that the instrument 
is the subject of a diversion or withdrawal as described in paragraph 
(d) of this section, in which event he shall file with the port director 
a consumption entry for the instrument and pay all import duties and 
import taxes due on the container or instrument at the rate or rates in 
effect and in its condition on the date of such diversion or withdrawal.
    (f)(1) Except as provided in paragraph (j) of this section, an 
instrument of international traffic (other than a container as defined 
in Article 1 of the Customs Convention on Containers that is governed by 
paragraphs (g) (1)-(3) of this section) may be used as follows in point-
to-point traffic, provided such traffic is incidental to the efficient 
and economical utilization of the instrument in the course of its use in 
international traffic:
    (i) Picking up and delivering loads at intervening points in the 
United States while en route between the port of arrival and the point 
of destination of its imported cargo; or
    (ii) Picking up and delivering loads at intervening points in the 
United States while en route from the point of destination of imported 
cargo to a point where export cargo is to be loaded or to an exterior 
port of departure by a reasonably direct route to, or nearer to, the 
place of such loading or departure.
    (2) Neither use as enumerated in paragraph (f)(1)(i) or (ii) of this 
section constitutes a diversion to unpermitted point-to-point local 
traffic within the United States or a withdrawal of an instrument in the 
United States from its use as an instrument of international traffic 
under this section.
    (g)(1) Except as provided in paragraph (j) of this section, a 
container (as defined in Article 1 of the Customs Convention on 
Containers) that is designated as an instrument of international traffic 
is deemed to remain in international traffic provided that the container 
exits the U.S. within 365 days of the date on that it was admitted under 
this section. An exit from the U.S. in this context means a movement 
across the border of the United States into a foreign country where 
either:
    (i) All merchandise is unladen from the container; or
    (ii) Merchandise is laden aboard the container (if the container is 
empty).
    (2) The person who filed the application for release under paragraph 
(a)(1) of this section is responsible for keeping and maintaining such 
records, otherwise generated and retained in the ordinary course of 
business, as may be necessary to establish the international movements 
of the containers. Such records shall be made available for inspection 
by Customs officials upon reasonable notice.
    (3) If the container does not exit the U.S. within 365 days of the 
date on which it is admitted under this section, such container shall be 
considered to have been removed from international traffic, and entry 
for consumption must be made within 10 business days after the end of 
the month in which the container is deemed removed from international 
traffic. When entry is required under this section, any containers 
considered removed from international traffic in the same month may be 
listed on one entry. Such entry may be made at any port of entry. Under 
19 U.S.C. 1484(a)(1)(B), the importer of record is required, using 
reasonable care, to complete the entry by filing with Customs the 
declared value, classification and rate of duty applicable to the 
merchandise. The importer of record must use the value of the container 
as determined in accordance with section 402, Tariff Act of 1930 (19 
U.S.C. 1401a), as amended by the Trade Agreements Act of 1979 (TAA).
    (h) For failure promptly to report the diversion or withdrawal or 
promptly to make the required entry and pay the duties due, the 
applicant shall be liable for the payment of liquidated damages equal to 
the domestic value of the instrument established in accordance with 
Section 606, Tariff Act of 1930.
    (i) When an instrument of international traffic, as provided in 
paragraph (a) of this section, is returned to the United States and 
released in accordance with the provisions of that

[[Page 113]]

paragraph, any repairs which may have been made to the instrument while 
it was abroad are not subject to entry or the payment of duty whether 
the instrument is of foreign or domestic manufacture, whether it left 
the United States empty or loaded, and whether or not the repairs made 
abroad were in contemplation when the instrument left the United States.
    (j) Containers and other articles designated as instruments of 
international traffic in accordance with this section are nevertheless 
subject to the application of the coastwise laws of the United States, 
with particular reference to Section 883, Title 46, United States Code 
(see Sec. 4.93 of this chapter).

[28 FR 14663, Dec. 31, 1963]

    Editorial Note: For Federal Register citations affecting Sec. 
10.41a, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



Sec. 10.41b  Clearance of serially numbered substantial holders or outer 
containers.

    (a) The holders and containers described in this section may be 
released without entry or the payment of duty, subject to the provisions 
of this section.
    (b) Subject to the approval of a port director pursuant to the 
procedures described in this paragraph, certain foreign- or U.S.-made 
shipping devices arriving from Canada or Mexico, including racks, 
holders, pallets, totes, boxes and cans, need not be serially numbered 
or marked if they are always transported on or within either intermodal 
and similar containers or containers which are themselves vehicles or 
vehicle appurtenances and accessories such as twenty and forty foot 
containers of general use and ``igloo'' air freight containers. The 
following or similar notation shall appear on the vehicle or vessel 
manifest in relation to such shipping devices which are exempt from 
serial numbering or marking requirements pursuant to this paragraph: 
``The shipping devices transported herein, which are not serially 
numbered or marked, have been exempted from such requirement pursuant to 
an application approved under 19 CFR 10.41b(b).'' Also, pallets and 
other solid wood shipping devices must be accompanied by an importer 
document, to the extent that this is required by the U.S. Department of 
Agriculture, Animal and Plant Health Inspection Service, attesting to 
the admissibility of such devices as regards plant pest risk, as 
provided for in 7 CFR 319.40-3.
    (1) An importer or his agent, regardless of whether the importer is 
the owner of the foreign- or U.S.-manufactured shipping devices, may 
apply to a port director of Customs at one of the importer's chiefly 
utilized Customs ports or the port within which the importer's or 
agent's recordkeeping center is located for permission to have such 
shipping devices arriving from Canada or Mexico released without entry 
and payment of duty at the time of arrival and without the devices being 
serially numbered or marked. Application may be filed in only one port. 
Although no particular format is specified for the application, it must 
contain the information enumerated in paragraph (b)(2) of this section. 
Any duty which may be due on these shipping devices shall be tendered 
and paid cumulatively at the time specified in an approved application, 
which may be either before or after the arrival of the shipping devices 
in the U.S. (such as, at the time a contract, purchase order or lease 
agreement is issued).
    (2) The application shall:
    (i) Describe the types of shipping devices covered, their 
classification under the Harmonized Tariff Schedule of the U.S. (HTSUS), 
their countries of origin, and whether and to whom required duty was 
paid for them or when it will be paid for them, including duties for 
repair and modifications to such shipping devices while outside the 
U.S.;
    (ii) Identify the intended ports where it is anticipated the 
shipping devices will be arriving and departing the U.S., as well as the 
particular movements and conveyances in which they are intended to be 
utilized;
    (iii) Describe the applicant's proposed program for accounting for 
and reporting these shipping devices;

[[Page 114]]

    (iv) Identify the reporting period (which shall in no event be less 
frequent than annual), as well as the payment period within which 
applicable duty and fees must be tendered (which shall in no event 
exceed 90 days following the close of the related reporting period);
    (v) Describe the type of inventory control and recordkeeping, 
including the specific records, to be maintained to support the reports 
of the shipping devices; and
    (vi) Provide the location in the United States, including the name 
and address, where the records supporting the reports will be retained 
by law and will be made available for inspection and audit upon 
reasonable notice. (The records supporting the reports of the shipping 
devices must be kept for a period of at least 3 years from the date such 
reports are filed with the port director.)
    (3) The application shall be filed along with a continuous bond 
containing the conditions set forth in Sec. 113.66(c) of this chapter. 
If the application is approved by the port director and the conditions 
set forth in the application or of the bond are violated, the port 
director may issue a claim for liquidated damages equal to the domestic 
value of the container. If the domestic value exceeds the amount of the 
bond, the claim for liquidated damages will be equal to the amount of 
the bond.
    (4) The port director receiving the application shall evaluate the 
program proposed to account for, report and maintain records of the 
shipping devices. The port director may suggest amendments to the 
applicant's proposal. The port director shall notify the applicant in 
writing of his decision on the application within 90 days of its 
receipt, unless this period is extended for good cause and the applicant 
is so informed in writing. Approval of the application by the port 
director with whom it is filed shall be binding on all Customs ports 
nationwide.
    (5) If the decision is to deny the application, in whole or in part, 
the port director shall specify the reason for the denial in a written 
reply, and inform the applicant that such denial may be appealed to the 
Assistant Commissioner, Office of Field Operations, Customs 
Headquarters, within 21 days of its date. The Assistant Commissioner's 
decision shall be issued, in writing, within 30 days of the receipt of 
the appeal, and shall constitute the final Customs determination 
concerning the application.
    (6) If the application is approved, an importer may later apply to 
amend his application to add or delete particular types of shipping 
devices listed in the application in which the procedures set forth in 
the application may be utilized. If a requested amendment to an approved 
application should be denied, or if an approved application should be 
revoked, in whole or in part, by the port director, the procedures 
described in paragraph (b)(5) of this section shall apply.
    (7) Application for and approval of a reporting program shall not 
limit or restrict the use of other alternative means for obtaining the 
release of holders, containers and shipping devices.
    (c) In the case of serially numbered holders or containers of United 
States manufacture for which free clearance under subheading 9801.00.10, 
Harmonized Tariff Schedule of the United States, is claimed, the owner 
shall place thereon the following markings:
    (1) 9801.00.10, unless the holder or container has permanently 
attached thereto the manufacturer's metal tag or plate showing, among 
other things, the name and address of the manufacturer who is located in 
the United States.
    (2) The name of the owner, either positioned as indicated in the 
example below, or elsewhere conspicuously shown on the holder or 
container.
    (3) The serial number assigned by the owner, which shall be one of 
consecutive numbers and not to be duplicated. For example: 9801.00.10 * 
* * Zenda * * * 2468.
    (d)(1) In the case of serially numbered holders or containers of 
foreign manufacture, other than those provided for in paragraph (d)(2) 
of this section, for which free clearance under the second provision in 
subheading 9803.00.50, HTSUS (19 U.S.C. 1202), is claimed, the owner 
shall place thereon the following markings:
    (i) 9803.00.50.

[[Page 115]]

    (ii) The district and port code numbers of the port of entry, the 
entry number, and the last two digits of the fiscal year of entry 
covering the importation of the holders and containers on which duty was 
paid.
    (iii) The name of the owner, either positioned as indicated in the 
example below, or elsewhere conspicuously shown on the holder or 
container.
    (iv) The serial number assigned by the owner, which shall be one of 
consecutive numbers and not to be duplicated. For example: 9803.00.50 * 
* * 10-1-366-63 * * * Zenda * * * 2468.
    (2) In the case of substantial holders or containers of either U.S. 
or foreign manufacture, specially designed and equipped to facilitate 
the carriage of goods by one or more modes of transport without 
intermediate reloading, each having a gross mass rating of at least 
18,120 kilograms, for which duty-free entry is requested under either 
the first or the second proviso in subheading 9803.00.50, HTSUS (19 
U.S.C. 1202), is claimed, only the following clear, conspicuous and 
durable markings are required to be on the container:
    (i) The identity of the owner or operator of the container.
    (ii) The serial number assigned by the owner or operator of the 
container, which shall be one of consecutive numbers and shall not be 
duplicated.
    (e) The prescribed markings shall be clear and conspicuous, that is, 
they shall appear on an exposed side of the holder or container in 
letters and figures of such size as to be readily discernible. The 
markings will be stricken out or removed when the holders or containers 
are taken out of service or when ownership is transferred, except that 
appropriate changes may be made if a new owner wishes to use the holders 
and containers under this procedure.
    (f) The owner shall keep adequate records open to inspection by 
Customs officers, which shall show the current status of the serially 
numbered holders and containers in service and the disposition made of 
such holders and containers taken out of service.
    (g) Nothing in this procedure shall be deemed to affect:
    (1) The requirements for outward or inward manifesting of such 
holders or containers. The manifests will show for each holder or 
container its markings as provided for herein.
    (2) The requirements of the Department of Commerce on exportation 
with respect to the filing of ``Shipper's Export Declaration,'' Form 
7525-V.
    (3) The treatment of articles covered herein under the coastwise 
laws of the United States, with particular reference to section 883, 
Title 46, United States Code.
    (h) If the holder or container and its contents are to move in bond 
or under cover of a TIR carnet (see part 114 of this chapter) from the 
port of arrival intact, the holder or container shall appear on the 
inward foreign manifest so as to be related to the cargo contained 
therein and will be released under this procedure at a subsequent port. 
If the holder or container is to move in bond or under cover of a TIR 
carnet from the port of arrival not intact with its contents, the holder 
or container may appear on the inward foreign manifest separate from and 
not related to the cargo contained therein and will be released under 
this procedure at the port of arrival before it moves forward and will 
not appear on the in-bond document.
    (i) A continuous bond containing the conditions set forth in Sec. 
113.66 of this chapter shall be filed with the port director. If the 
conditions are violated the port director shall issue a claim for 
liquidated damages equal to the domestic value of the holder or 
container established in accordance with section 606, Tariff Act of 
1930, as amended (19 U.S.C. 1606). If the domestic value exceeds the 
amount of the bond the claim for liquidated damages will be equal to the 
amount of the bond.

[T.D. 56542, 30 FR 15143, Dec. 8, 1965, as amended by T.D. 71-70, 36 FR 
4485, Mar. 6, 1971; T.D. 84-213, 49 FR 41165, Oct. 19, 1984; T.D. 86-13, 
51 FR 4164, Feb. 3, 1986; T.D. 89-1, 53 FR 51249, Dec. 21, 1988; T.D. 
96-20, 61 FR 7989, Mar. 1, 1996; T.D. 97-82, 62 FR 51769, Oct. 3, 1997; 
T.D. 99-64, 64 FR 43265, Aug. 10, 1999]

                        Articles for Institutions



Sec. 10.43  Duty-free status.

    (a) The port director may, at his discretion, require appropriate 
proof of

[[Page 116]]

duty-free status for articles for institutions claimed to be exempt from 
duty under subheadings 9810.00.05, 9810.00.15, 9810.00.25, 9810.00.30, 
9810.00.40, 9810.00.45, 9810.00.50, 9810.00.55, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202).
    (b) Appropriate proof may be a copy of the charter or other evidence 
of the character of the institution for the use of which the articles 
are imported.

[T.D. 85-123, 50 FR 29953, July 23, 1985, as amended by T.D. 89-1, 53 FR 
51249, Dec. 21, 1988]



Sec. 10.46  Articles for the United States.

    Pursuant to subheadings 9808.00.10 and 9808.00.20, books, 
engravings, and other articles therein enumerated, which are imported by 
authority or for the use of the United States or for the use of the 
Library of Congress, shall be admitted free of duty upon the written 
request of the head of the bureau or executive department concerned.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 67-108, 32 FR 6392, Apr. 
25, 1967; T.D. 89-1, 53 FR 51249, Dec. 21, 1988; T.D. 97-82, 62 FR 
51769, Oct. 3, 1997]



Sec. 10.47  [Reserved]

                              Works of Art



Sec. 10.48  Engravings, sculptures, etc.

    (a) Invoices covering works of art claimed to be free of duty under 
subheadings 9702.00.00 and 9703.00.00, HTSUS, shall show whether they 
are originals, replicas, reproductions, or copies, and also the name of 
the artist who produced them, unless upon examination the Customs 
officer is satisfied that such statement is not necessary to a proper 
determination of the facts.
    (b) The following evidence shall be filed in connection with the 
entry: A declaration in the following form by the artist who produced 
the article, or by the seller, shipper or importer, showing whether it 
is original, or in the case of sculpture, the original work or model, or 
one of the first twelve castings, replicas, or reproductions made from 
the original work or model; and in the case of etchings, engravings, 
woodcuts, lithographs, or prints made by other hand-transfer processes, 
that they were printed by hand from hand-etched, hand-drawn, or hand-
engraved plates, stones, or blocks:

    I, --------, do hereby declare that I am the producer, seller, 
shipper or importer of certain works of art, namely -------- covered by 
the annexed invoice dated --------; that any sculptures or statuary 
included in that invoice are the original works or models or one of the 
first twelve castings, replicas, or reproductions made from the 
sculptor's original work or model; and that any etchings, engravings, 
woodcuts, lithographs, or prints made by other hand-transfer processes 
included in that invoice were printed by hand from hand-etched, hand-
drawn, or hand-engraved plates, stones, or blocks.

    (c) The port director may waive the declaration requirement set 
forth in paragraph (b) of this section.
    (d) Artists' proof etchings, engravings, woodcuts, lithographs, or 
prints made by other hand-transfer processes should bear the genuine 
signature or mark of the artist as evidence of their authenticity. In 
the absence of such a signature or mark, other evidence shall be 
required which will establish the authenticity of the work to the 
satisfaction of the port director.

[T.D. 94-3, 58 FR 68742, Dec. 29, 1993]



Sec. 10.49  Articles for exhibition; requirements on entry.

    (a) There shall be filed in connection with the entry of works of 
art and other articles claimed to be free of duty under Chapter 98, 
Subchapter XII, Harmonized Tariff Schedule of the United States (HTSUS), 
a declaration by a qualified officer of the institution in sufficient 
detail to demonstrate entitlement to entry as claimed, and a bond on 
Customs Form 301, containing the bond conditions set forth in Sec. 
113.62 of this chapter. Claim for free entry under Chapter 98, 
Subchapter XII may be made for articles of the character described 
therein which have been previously entered under any other provision of 
law and the entry amended accordingly upon compliance with the 
requirements of this section, provided the articles have not been 
released from Customs custody.
    (b) The port director may require a copy of the charter or other 
evidence of the character of the institution for which the articles are 
imported, and

[[Page 117]]

may also require the production of the original of any order given by 
such society or institution to any importing agent or dealer for such 
articles. The society or institution shall file, within 6 months after 
the date of filing the entry, any document or proof demanded by the port 
director in connection with the entry.
    (c) Articles entered under subheading 9812.00.20, HTSUS, may be 
transferred from one institution to another upon an application in 
writing in the case of each transfer describing the articles and stating 
the name of the institution to which transfer is to be made, provided 
the sureties to the bond assent in writing under seal or a new bond is 
filed. No entry or withdrawal shall be required for such a transfer.
    (d) If any of the articles accorded free entry under Chapter 98, 
Subchapter XII shall be sold, offered or exposed for sale, transferred, 
or used in any manner contrary to the provisions of the regulations in 
this part, within 5 years after the date of entry under such part, the 
amount of the duties shall be collected immediately by the director of 
the port of entry and deposited as duties. If the articles are exported 
or destroyed under Customs supervision within such 5-year period, the 
liability under the bond shall be treated as terminated.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 84-213, 49 FR 41166, 
Oct. 19, 1984; T.D. 89-1, 53 FR 51249, Dec. 21, 1988; T.D. 92-85, 57 FR 
40605, Sept. 4, 1992]



Sec. 10.50  [Reserved]



Sec. 10.52  Painted, colored or stained glass windows for religious 
institutions.

    When painted, colored, or stained glass windows or parts thereof, 
are claimed free of duty under subheading 9810.00.10, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202), the port director may, 
at his discretion, require appropriate proof that the importation was 
designed by, and produced by or under the direction of, a professional 
artist, and that it is for the use of an institution established solely 
for religious purposes.

[T.D. 85-123, 50 FR 29953, July 23, 1985, as amended by T.D. 89-1, 53 FR 
51250, Dec. 21, 1988]



Sec. 10.53  Antiques.

    (a) Articles accompanying a passenger and entitled to entry under 
the passenger's declaration and entry, or articles entered under an 
informal entry which are claimed to be free of duty under subheading 
9706.00.00, Harmonized Tariff Schedule of the United States (HTSUS), may 
be admitted free of duty upon the execution of a declaration on the face 
of the entry provided that the passenger or person filing the informal 
entry is the owner of the articles and that they are for his personal 
use and not for sale or other commercial use and provided the Customs 
officer concerned is satisfied that the articles are of the requisite 
age.
    (b) Antiques of the age prescribed by subheading 9706.00.00, HTSUS, 
or admitted under the provisions of paragraph (e) of this section, shall 
be admitted free of duty though repaired or renovated. If, however, an 
antique has been repaired with a substantial amount of additional 
material, without changing the original form or shape, the original and 
added portions shall be appraised and reported as separate entities and 
the basis for such report shall be plainly indicated on the invoice by 
the appraiser. In such cases duty shall be assessed on the portion 
added. If the repairs consist of an addition to an article of a feature 
which changes it substantially from the article originally produced, or 
if the antique portion has otherwise been so changed as to lose its 
identity as the article which was in existence prior to the time 
prescribed in subheading 9706.00.00, HTSUS, the entire article shall be 
excluded from free entry under subheading 9706.00.00, HTSUS.
    (c) Except for furniture admitted under the provisions of paragraph 
(e) of this section, furniture claimed to be free of duty under 
subheading 9706.00.00, Harmonized Tariff Schedule of the United States 
(HTSUS) may be entered for consumption at any port of entry within the 
customs territory of the United States. Furniture as used in

[[Page 118]]

this section of the regulations is defined as `movable articles of 
convenience or decoration for use in furnishing a house, apartment, 
place of business or accommodation'. This definition embraces most 
articles claimed to be free of duty as antiques.
    (d) A claim for the free entry of an article under subheading 
9706.00.00, HTSUS on the basis of antiquity may be made on the entry, or 
filed after entry at any time prior to liquidation of the entry, 
provided the article has not been released from Customs custody or it 
has been found upon examination before such release to be described in 
subheading 9706.00.00, HTSUS.
    (e) Antique articles otherwise prohibited entry by the Endangered 
Species Act of 1973 (16 U.S.C. 1521, et seq.) may be entered if:
    (1) The article is composed in whole or in part of any endangered or 
threatened species listed in 50 CFR 17.11 or 17.12,
    (2) The article is not less than 100 years of age,
    (3) The article has not been repaired or modified with any part of 
any such endangered or threatened species, on or after December 28, 
1973,
    (4) The article is entered at a port designated in Sec. 12.26 of 
this chapter,
    (5) A Declaration for Importation or Exportation of Fish or Wildlife 
(USFWS Form 3-177) is filed at the time of entry with the port director 
who will forward the form to the U.S. Fish and Wildlife Service, and
    (6) The importer meets the requirements of paragraph (a) of this 
section.
    (f) The additional duty imposed by additional U.S. Note 2, Chapter 
97, HTSUS, shall apply to any article which is imported for sale and 
claimed, either at the time of entry or at a later date, to be free of 
duty under subheading 9706.00.00, HTSUS, if such article is later found 
to be unauthentic in respect of the antiquity claimed as a basis for 
such free entry, unless the claim under subheading 9706.00.00, HTSUS, is 
withdrawn in writing before the examination of the article for the 
purpose of appraisement or classification has begun.
    (g) The additional duty provided for in additional U.S. Note 2, 
Chapter 97, HTSUS shall not be assessed if the importer established by 
evidence satisfactory to the port director that the article was not 
imported for sale. In the case of any article imported in a passenger's 
baggage or entered under an informal entry, the Customs officer 
concerned may accept the statement of the owner that the article was not 
imported for sale if he is satisfied of the truth of such statement.

[28 FR 14663, Dec. 31, 1963]

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



Sec. 10.54  Gobelin and other hand-woven tapestries.

    Pursuant to subheading 5805.00.10, Harmonized Tariff Schedule of the 
United States, Gobelin tapestries produced in the Manufacture Nationale 
des Gobelins factories at Paris and Beauvais under the direction and 
control of the French Government, and other hand-woven tapestries, shall 
be accorded free entry if of a kind fit only for use as wall hangings, 
and valued over $215 per square meter.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 87-75, 52 FR 20066, May 
29, 1987; T.D. 89-1, 53 FR 51250, Dec. 21, 1988]

                             Vegetable Oils



Sec. 10.56  Vegetable oils, denaturing; release.

    (a) Olive, palm-kernel, rapeseed, sunflower, and sesame oil shall be 
classifiable under subheadings 1509.10.20, 1509.10.40, 1509.90.20, 
1509.90.40, 1510.00.20, 1512.19.20, 1513.29.00, 1514.90.10, 1514.90.50, 
1515.50.00, Harmonized Tariff Schedule of the United States, if 
denatured abroad or under Customs supervision after importation but 
before release from Customs custody, at the request and expense of the 
importer, by a formula prescribed by Headquarters, U.S. Customs Service, 
or if by their method of production abroad they are rendered unfit for 
use as food or for any but mechanical or manufacturing purposes.
    (b) Each cask or package of oil claimed to have been before 
importation denatured or otherwise rendered

[[Page 119]]

unfit for use as food or for any but mechanical or manufacturing 
purposes shall be sampled and tested by an appraising officer.
    (c) Formulas prescribed by Headquarters, U.S. Customs Service, 
except proprietary mixtures, will be circulated to all Customs officers 
and will appear as abstracts of United States Customs Service decisions 
published in the weekly Customs Bulletins. Proprietary mixtures approved 
by the Commissioner of Customs will not be published but appropriate 
notice of their approval will be given to all Customs officers.
    (d) The Headquarters, U.S. Customs Service, will from time to time 
prescribe additional formulas, and will consider any formula for special 
denaturing that may be submitted.
    (e) The port director may, if he deems it advisable, require an 
importer requesting permission to use any authorized denaturant to 
submit to the appraiser an adequate sample of such denaturant, in order 
that the appraiser may report to the port director whether or not such 
denaturant is suitable for rendering the oil unfit for use as food or 
for any but mechanical or manufacturing purposes.
    (f) No such oil shall be released free of duty until the appraiser 
shall have made a special report that it has been properly denatured.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 66-182, 31 FR 11416, 
Aug. 30, 1966; T.D. 87-75, 52 FR 20066, May 29, 1987; T.D. 89-1, 53 FR 
51250, Dec. 21, 1988]

                        Potatoes, Corn, or Maize



Sec. 10.57  Certified seed potatoes, and seed corn or maize.

    Claim for classification as seed potatoes under subheading 
0701.10.00, as seed corn (maize) under subheading 1005.10., HTSUS, shall 
be made at the time of entry. Such classification shall be allowed only 
if the articles are white or Irish potatoes, or maize or corn, imported 
in containers and if, at the time of importation, there is firmly 
affixed to each container an official tag supplied by the government of 
the country in which the contents were grown, or an agency of such 
government. The tag shall bear a certificate to the effect that the 
specified contents of the container were grown, and have been approved, 
especially for use as seed. The tag shall also bear a number or other 
symbol identifying the potatoes or corn in the container with an 
inspection record of the foreign government or its agency on the basis 
of which the certificate was issued.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 89-1, 53 FR 51250, Dec. 
21, 1988]

                             Bolting Cloths



Sec. 10.58  Bolting cloths; marking.

    (a) As a prerequisite to the free entry of bolting cloth for milling 
purposes under subheading 5911.20.20, Harmonized Tariff Schedule of the 
United States, the cloth shall be indelibly marked from selvage to 
selvage at intervals of not more then 10.16 centimeters with ``bolting 
cloth expressly for milling purposes'' in block letters 7.62 centimeters 
in height. Bolting cloths composed of silk imported expressly for 
milling purposes shall be considered only such cloths as are suitable 
for and are used in the act or process of grading, screening, bolting, 
separating, classifying, or sifting dry materials, or dry materials 
mixed with water, if the water is merely a carrying medium.
    (b) Bolting cloths not marked in the manner above indicated at the 
time of importation may be so marked by the importers in public stores 
under the supervision of customs officers.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 87-75, 52 FR 20066, May 
29, 1987; T.D. 89-1, 53 FR 51250, Dec. 21, 1988]

            Withdrawal of Supplies and Equipment for Vessels



Sec. 10.59  Exemption from customs duties and internal-revenue tax.

    (a) A vessel shall not be considered to be actually engaged in the 
foreign trade, or in trade between the Atlantic and Pacific ports of the 
United States, or between the United States and its possessions, or 
between Hawaii and any other part of the United States or between Alaska 
and any other part of the United States, as the case may be, for the 
purpose of withdrawing supplies free of duty and internal-revenue tax

[[Page 120]]

pursuant to section 309(a), Tariff Act of 1930, as amended, unless it 
is--
    (1) Operating on a regular schedule in a class of trade which 
entitles it to the privilege;
    (2) Actually transporting passengers or merchandise to or from a 
foreign port, a port on the opposite coast of the United States, or 
between a port in a possession of the United States and a port in the 
United States or in another of its possessions, or between Hawaii and 
any other part of the United States or between Alaska and any other part 
of the United States;
    (3) Departing in ballast (without cargo or passengers) from one port 
for another, domestic or foreign, for the purpose of lading passengers 
or cargo at the port of destination for carriage in a class of trade 
specified in section 309(a), Tariff Act of 1930, as amended, for which 
class of trade the vessel is suitable and substantially ready for 
service with necessary fittings, outfit, and equipment already installed 
on its departure in ballast, and from which it is not diverted prior to 
carriage of passengers or cargo in such trade. A written declaration of 
the owner or agent of the vessel may be required in connection with the 
withdrawal, certifying to the vessel's suitableness and substantial 
readiness with necessary fittings, outfit, and equipment already 
installed on its departure in ballast for service in a class of trade 
specified in section 309 and agreeing to notify the port director if it 
is laid up or diverted from such class of trade prior to the carriage of 
cargo or passengers in such trade.
    (b) A withdrawal of articles may not be made under section 309, 
Tariff Act of 1930, as amended, for use on a trial or test trip of a 
vessel preparatory to its actually engaging in trades.
    (c) The classes of articles which may be withdrawn as provided for 
by section 309, Tariff Act of 1930, as amended, include the containers 
in which the articles are withdrawn and laden even though for tariff 
purposes the containers are classifiable separately from their contents, 
except unusual containers within the purview of General Rule of 
Interpretation 5, Harmonized Tariff Schedule of the United States 
(HTSUS).
    (d) For the purpose of allowing the privileges of section 309, 
Tariff Act of 1930, as amended, to aircraft as provided for therein, an 
aircraft shall be deemed to be a vessel within the meaning of each 
provision of this section and of Sec. Sec. 10.60 through 10.64 which 
may be applied to aircraft.
    (e) A documented vessel with a fisheries license endorsement and 
foreign fishing vessels of 5 net tons or over may be allowed to withdraw 
distilled spirits (including alcohol), wines, and beer conditionally 
free under section 309, Tariff Act of 1930, as amended (19 U.S.C. 1309), 
if the port director is satisfied from the quantity requested, in the 
light of (1) whether the vessel is employed in substantially continuous 
fishing activities, and (2) the vessel's complement, that none of the 
withdrawn articles is intended to be removed from the vessel in, or 
otherwise returned to, the United States without the payment of duty or 
tax. Such withdrawal shall be permitted only after the approval by the 
port director of a special written application, in triplicate, on 
Customs Form 5125, of the withdrawer, supported by a bond on Customs 
Form 301, containing the bond conditions set forth in Sec. 113.62 of 
this chapter executed by the withdrawer. Such application shall be filed 
with Customs Form 7501 or 7512, as the case may be. The original and the 
triplicate copy of the application, after approval, shall be stamped 
with the withdrawal number and date thereof and shall be returned to the 
withdrawer for use as prescribed below. Approval of each such 
application shall be subject to the condition that the original and the 
triplicate copy shall be presented thereafter by the withdrawer or the 
vessel's master to the port director within 24 hours (excluding 
Saturday, Sunday, and holidays) after each subsequent arrival of the 
vessel at a Customs port or station and that an accounting shall be made 
at the time of such presentation of the disposition of the articles 
until the port director is satisfied that all of them have been consumed 
on board, or landed under Custom's supervision, and takes up the 
original application. (The withdrawer

[[Page 121]]

shall retain the triplicate copy as evidence of consumption on board or 
landing under Customs supervision.) The approval shall be subject to the 
further conditions that any such withdrawn article remaining on board 
while the vessel is in port shall be safeguarded in the manner and to 
such extent as the district director for the port or place of arrival 
shall deem necessary and that failure to comply with the conditions upon 
which a conditionally free withdrawal is approved shall subject the 
total quantity of withdrawn articles to the assessment and collection of 
an amount equal to the duties and taxes that would have been assessed on 
the entire quantity of supplies withdrawn had such supplies been 
regularly entered, or withdrawn, for consumption.
    Exemption from internal-revenue tax on distilled spirits, alcohol, 
wines, and beer removed from any internal-revenue bonded warehouse, 
industrial alcohol premises, bonded wine cellar, or brewery; and 
drawback on taxpaid distilled spirits or wines removed from an export 
storage room, or on taxpaid beer removed from a brewery (or place of 
storage elsewhere), for use as supplies on vessels under section 309, 
Tariff Act of 1930, as amended, are governed by regulations of the 
Internal Revenue Service.
    (f) Pursuant to section 309(d) of the Tariff Act of 1930, as 
amended, the Department of Commerce has found and advised the Secretary 
of the Treasury of the foreign countries which allow privileges to 
aircraft registered in the United States substantially reciprocal to 
those described in sections 309 and 317 of the Tariff Act of 1930, as 
amended. Advices also have been received of changes and limitations of 
privileges allowed. In accordance with these advices, Treasury decisions 
are issued extending to the aircraft of foreign countries free 
withdrawal privileges reciprocal to those found by the Secretary of 
Commerce to be extended by those countries to aircraft registered in the 
United States or making changes in such privileges on the basis of new 
findings. Listed below by countries are the Treasury decisions issued 
pursuant to such findings which are currently in effect:

------------------------------------------------------------------------
                                       Treasury    Exceptions if any, as
              Country                Decision(s)          noted--
------------------------------------------------------------------------
Abu Dhabi..........................        95-45
Argentina..........................    54925 (1)  Applicable only as to
                                           92-20   aircraft equipment,
                                                   spare parts, and
                                                   supplies.
Australia..........................    54747 (1)  Not applicable to
                                                   ground equipment.
Austria............................        80-68
Bahamas............................    52798 (3)
Bahrain............................        95-45
Belgium............................    52846 (2)
Benin..............................   71-215,93-
Bermuda............................    49944 (4)
Brazil.............................    53281 (2)
Canada.............................       69-149  Not applicable to
                                          69-245   ground equipment
                                                   during period May 1
                                                   to September 16,
                                                   1969, inclusive.
Chile..............................   66-128 (2)
China*.............................        82-91
Colombia...........................   70-107 (1)
Costa Rica.........................    53658 (1)
Cuba...............................       81-198  Applicable only as to
                                                   aircraft supplies.
Czechoslovakia.....................   70-107 (1)
Denmark............................    51966 (3)
Dominican Republic.................    54522 (1)
Ecuador............................    52510 (4)
Egypt..............................         74-3
                                          85-141
El Salvador........................    54675 (1)
Finland............................   69-120 (2)
France.............................    67-96 (1)  Not applicable to
                                                   tobacco products
                                                   under section 317 of
                                                   the tariff act. Not
                                                   applicable to ground
                                                   equipment.
Federal Republic of Germany........       69-150  Not applicable to
                                                   ground equipment.
Greece.............................    54847 (1)
Guyana.............................        78-28
Honduras...........................       71-154
Iceland............................   67-265 (1)
India..............................    55155 (1)
Indonesia..........................        90-61  Applicable only as to
                                                   aviation fuels and
                                                   lubricants.
Iran...............................       75-254
Ireland............................    55291 (1)
Israel.............................    52831 (3)
Italy..............................       69-223  Not applicable to
                                                   ground equipment.
Ivory Coast........................       71-215
Jamaica............................       70-250
Japan..............................   53550 (1),  Not applicable to
                                           88-45   ground support
                                                   equipment as of
                                                   August 1, 1986
Jordan.............................       74-102
Kenya..............................       71-102  Applicable only as to
                                                   aircraft fuels and
                                                   lubricants.
Lebanon............................    53902 (1)
Luxembourg.........................        89-77  Applicable only as to
                                                   aviation fuels.
Mexico.............................    54506 (5)
Morocco............................       75-254
Netherlands........................    52494 (2)
Netherlands Antilles...............       71-211
New Zealand........................        73-52  Not applicable to
                                                   ground equipment.
Nicaragua..........................    54640 (1)
Norway.............................    51966 (3)
Oman...............................        95-45
Pakistan...........................    55416 (1)

[[Page 122]]

 
Panama.............................    55453 (1)
Peru...............................    52911 (2)
Poland.............................       72-153
Portugal...........................   68-107 (1)  Not applicable to
                                                   ground equipment.
Qatar..............................        95-45
Republic of Korea..................       71-140
Republic of the Philippines........       71-197
Romania............................        75-35
Saudi Arabia.......................  73-307, 92-
                                              68
Senegal............................       71-215
Singapore..........................        93-25
South Africa.......................       69-162  Not applicable to
                                                   ground equipment.
Spain..............................    54522 (2)
Sweden.............................    51966 (3)
Switzerland........................        56047
Taiwan.............................  70-107 (1),  Not applicable to
                                           82-91   ground equipment.
Tanzania...........................       71-102  Applicable only as to
                                                   aircraft fuels and
                                                   lubricants.
Thailand...........................  71-138, 89-
                                               6
Trinidad and Tobago................    56441 (1)
Turkey.............................         89-7
Uganda.............................       71-102  Applicable only as to
                                                   aircraft fuels and
                                                   lubricants.
Union of Soviet Socialist Republics   67-123 (1)
United Kingdom.....................       69-176  Not applicable to
                                                   ground equipment.
Venezuela..........................    55425 (1)
Yugoslavia.........................       71-138
Zambia.............................         89-5
------------------------------------------------------------------------
*See also Taiwan


[28 FR 14663, Dec. 31, 1963]

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



Sec. 10.60  Forms of withdrawals; bond.

    (a) Withdrawals from warehouse shall be made on Customs Form 7501. 
Each withdrawal shall contain the statement prescribed for withdrawals 
in Sec. 144.32 of this chapter and all of the statistical information 
as provided in Sec. 141.61(e) of this chapter. Withdrawals from 
continuous Customs custody elsewhere than in a bonded warehouse shall be 
made on Customs Form 7512, except as provided for by paragraph (h) of 
this section. When a withdrawal of supplies or other articles is made 
which may be used on a vessel while it is proceeding in ballast to 
another port as provided for by Sec. 10.59(a)(3), a notation of this 
fact shall be made on the withdrawal and the name of the other port 
given if known.
    (b) If the withdrawal is made by other than the principal on the 
warehouse or rewarehouse entry, as the case may be, the assent of such 
principal shall be endorsed on the withdrawal, unless the principal has 
otherwise authorized such withdrawal in writing.
    (c) A bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter shall be taken when the withdrawal 
from warehouse is made by a person other than the principal on the 
warehouse or rewarehouse entry, as provided for in paragraph (b) of this 
section.
    (d) Except as otherwise provided in Sec. 10.62b, relating to 
withdrawals from warehouse of aircraft turbine fuel to be used within 30 
days of such withdrawal as supplies on aircraft under Sec. 309, Tariff 
Act of 1930, as amended, when the supplies are to be laden at a port 
other than the port of withdrawal from warehouse, they shall be 
withdrawn for transportation in bond to the port of lading. Three copies 
of the manifest on Customs Form 7512, in addition to six copies of the 
withdrawal on Customs Form 7501, shall be required. The procedure shall 
be the same as that prescribed in Sec. 144.37 of this chapter (the six 
copies of Customs Form 7501 taking the place of the entry copies of 
Customs Form 7512).
    (e) No bond shall be required in the case of war vessels.
    (f) Unless transfer is permitted under the provisions of paragraph 
(h) of this section, when articles are withdrawn from continuous Customs 
custody elsewhere than in a bonded warehouse for lading at the port of 
withdrawal, the procedure provided for in Sec. 18.25 of this chapter 
shall be followed, except that the bond required shall be on Customs 
Form 301, containing the bond conditions set forth in Sec. 113.62 of 
this chapter. Unless transfer is permitted under the provisions of 
paragraph (h) of this section, when articles are withdrawn from 
continuous Customs custody elsewhere than in a bonded warehouse for 
lading at another port, the procedure set forth in Sec. 18.26 of this 
chapter shall be followed, except that the withdrawal when filed shall 
be supported by a bond

[[Page 123]]

on Customs Form 301, containing the bond conditions set forth in Sec. 
113.62 of this chapter. There shall be such examination of the articles 
as may be necessary to satisfy the port director that they are subject 
to the privileges of section 309, Tariff Act of 1930, as amended, and 
that the value and quantity declared for them are correct.
    (g) A withdrawal under Sec. 10.59(e) shall be supported by a bond 
on Customs Form 301, containing the bond conditions set forth in Sec. 
113.62 of this chapter.
    (h) If a request is made for permission to transfer supplies or 
stores from one vessel to another which would be entitled to withdraw 
them free of duty and tax under section 309 or 317, Tariff Act of 1930, 
as amended, the port director in his discretion may permit the articles 
to be so transferred under Customs supervision under a permit on Customs 
Form 3171 in lieu of a formal withdrawal under the pertinent statute. In 
such a case, the pertinent statute shall be indicated by an endorsement 
made on the permit by the port director.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 73-175, 38 FR 17445, 
July 2, 1973; T.D. 73-312, 38 FR 30882, Nov. 8, 1973; T.D. 84-213, 49 FR 
41166, Oct. 19, 1984; T.D. 95-81, 60 FR 52295, Oct. 6, 1995; T.D. 96-18, 
61 FR 6777, Feb. 22, 1996]



Sec. 10.61  Withdrawal permit.

    Upon the filing of the withdrawal and the execution of the bond, 
when required, the port director shall issue a permit on Customs Form 
7501 or 7512.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 95-81, 60 FR 52295, Oct. 
6, 1995]



Sec. 10.62  Bunker fuel oil.

    (a) Withdrawal under section 309, Tariff Act of 1930, as amended (19 
U.S.C. 1309). Except as otherwise provided in Sec. 10.62b, relating to 
withdrawals from warehouse of aircraft turbine fuel to be used within 30 
days of such withdrawal as supplies on aircraft under section 309, 
Tariff Act of 1930, as amended (19 U.S.C. 1309), when all the bunker 
fuel oil in a Customs bonded tank is intended only for lading duty free 
as supplies on vessels under section 309 at the port where the tank is 
located, delivery of the oil, by Customs bonded carrier, cartman, or 
lighterman (including bonded pipelines), under withdrawals on Customs 
Form 7501, either single or blanket, may be made without the presence of 
a Customs officer. When a blanket withdrawal is filed and a partial 
release takes place, the partial release procedure set forth in Sec. 
19.6(d) of this chapter shall be followed for each partial release. 
However, each abstract copy of Customs Form 7501 shall include the 
following additional information:
    (1) Type of oil withdrawn.
    (2) Number or other identification of sales order therefor.
    (3) Name of bonded carrier, date it received oil.
    (4) Receipt signed by master or other person in charge of delivering 
conveyance identified by number, or name, and if Customs bonded 
lighterman or cartman, by the carrier's license number.
    (5) Name and location of vessel obtaining oil.
    (6) Quantity and identification of each type of oil received with 
date, and signature and title of receiving officer. If all the oil is 
laden on the receiving vessel at the port of withdrawal via pipeline 
from the bonded storage tank, paragraphs (a) (3) and (4) of this section 
shall be deemed to be inapplicable.
    (b) If a blanket free withdrawal of bunker fuel oil is filed, to 
comply with Bureau of the Census requirements the withdrawal on Customs 
Form 7501 shall be endorsed ``Estimated Withdrawals'' and limited to the 
aggregate quantity and value of fuel oil which it is estimated will be 
physically removed from Customs bond during the calendar month in which 
the withdrawal is filed for lading on vessels entitled to duty-free 
vessel supplies under section 309 of the Tariff Act of 1930, as amended.
    (c)(1) As an incident of the delivery of fuel oils classifiable at 
different rates of duty to a vessel or vessels under section 309 of the 
tariff act, the port director may, when necessary to enable a supplier 
to meet fuel specifications, permit the blending of the oils in the 
delivering conveyance or in other suitable facilities after withdrawal 
from the bonded tanks, upon the condition that, to the extent of the 
amount of oil withdrawn classifiable at the higher

[[Page 124]]

rate, duty at the higher rate will be paid on any portion of the blended 
fuel oil not delivered within a reasonable time to a qualified vessel. 
The withdrawer shall be required to file a withdrawal for consumption 
for the excess quantity withdrawn. For example, if the quantity 
withdrawn consists of 1,500 barrels of bunker C fuel oil classifiable at 
the rate of one-eighth cent per gallon and 500 barrels of diesel oil 
classifiable at the rate of one-fourth cent per gallon but only 1,400 
barrels of the blended oil are actually laden as fuel supplies on 
qualified vessels, withdrawals for consumption are required for 500 
barrels of diesel oil at the higher rate and for 100 barrels of bunker C 
fuel oil at the lower rate.
    (2) Delivering transferer receipt. The receipt of the delivering 
carrier on a copy of Customs Form 7501 for fuel oil which has been 
blended under paragraph (c)(1) of this section with components 
classifiable at different rates of duty shall show, for each warehouse 
entry number and withdrawal number involved, the types and quantity of 
oil received.
    (d) Fuel oil withdrawn as vessel supplies at one port may be laden 
at another port on a vessel or vessels entitled to the free withdrawal 
privileges of section 309 of the tariff act, under procedures prescribed 
in this section, provided the movement to the receiving vessel or 
vessels is under the bond of a qualified carrier as described in Sec. 
18.1(a) of this chapter. In such cases, the provisions of Sec. 10.60(d) 
of this chapter shall be deemed inapplicable.
    (e) If a vessel not entitled to duty-free withdrawal of supplies 
from Customs bonded warehouses under section 309 of the Tariff Act of 
1930, as amended, should be supplied with fuel oil from a Customs bonded 
tank described in paragraph (a) of this section because of an emergency, 
a duty paid withdrawal therefor shall be filed on the first day that the 
customhouse is open for the general transaction of business after the 
day on which the oil is laden on the using vessel. If there should be 
willful or repeated instances of late filing of a duty-paid withdrawal 
in such cases, the port director shall require a duty-paid withdrawal to 
be filed prior to the removal of fuel oil from the bonded tank.
    (f) When the procedures prescribed in this section are followed, 
representatives of the port director will from time to time verify 
various withdrawals against all pertinent records, including financial 
records, of the withdrawers, deliverers, and receivers of the oil. The 
withdrawer shall maintain all pertinent records relating to the 
withdrawal, delivery, or receipt of the fuel oil for 5 years from the 
date of liquidation of the related fuel oil entry.

[T.D. 69-99, 34 FR 6520, Apr. 16, 1969, as amended by T.D. 79-159, 44 FR 
31967, June 4, 1979; T.D. 82-204, 47 FR 49367, Nov. 1, 1982; T.D. 95-81, 
60 FR 52295, Oct. 6, 1995; T.D. 96-18, 61 FR 6777, Feb. 22, 1996; T.D. 
96-51, 61 FR 31395, June 20, 1996; T.D. 99-33, 64 FR 16347, Apr. 5, 
1999]



Sec. 10.62a  Blanket withdrawals for certain merchandise.

    (a) Generally. Under this section, a blanket withdrawal on Customs 
Form 7501 may be filed for all or part of any merchandise withdrawn from 
warehouse except fuel oil covered under Sec. 10.62, for use on 
qualified vessels. Such a withdrawal shall be made only for lading on 
board vessels at the port where the warehouse is located. The procedure 
for the blanket withdrawal and partial releases after the initial 
release are the same as those provided in Sec. 19.6(d) of this chapter, 
except as noted in paragraph (b).
    (b) Partial release. A partial release on Customs Form 7501, in 
duplicate, or in triplicate if an extra copy is required by the port 
director, shall be presented to the warehouse proprietor and placed in 
the proprietor's permit file folder under the partial release procedure 
set forth in Sec. 19.6(d) of this chapter, as merchandise is needed for 
delivery to a using vessel. The original of the partial release document 
shall accompany the merchandise for delivery to the Customs officer who 
will supervise lading, or if a Customs officer does not physically 
supervise lading, to the master of the vessel. The original shall be 
returned to the proprietor for record purposes after the Customs officer 
or master of the vessel, as appropriate, has

[[Page 125]]

certified lading of the goods described in the document.

[T.D. 82-204, 47 FR 49367, Nov. 1, 1982, as amended by T.D. 95-81, 60 FR 
52295, Oct. 6, 1995]



Sec. 10.62b  Aircraft turbine fuel.

    (a) General. Unless otherwise provided, aircraft turbine fuel 
withdrawn from a Customs bonded warehouse for use under section 309, 
Tariff Act of 1930, as amended (19 U.S.C. 1309), may be commingled with 
domestic or other aircraft turbine fuel after such withdrawal only if 
such commingling is approved by the appropriate Customs official for the 
port where the commingling occurs. The appropriate Customs official may 
approve such commingling if the fueling system in which the commingling 
will occur contains adequate physical safeguards to prevent the possible 
unauthorized entry into the Customs territory of the bonded fuel. Such 
commingled fuel must be accounted for in the same 24-hour period in 
which it was commingled and must be--
    (1) Exported within that 24-hour period;
    (2) Used under section 309 within that 24-hour period; or
    (3) Entered or withdrawn for consumption, with duty deposited, as 
required under the applicable regulations (see part 144 of this 
chapter).
    (b) Duty-free withdrawal from warehouse of aircraft turbine fuel 
under section 557(a), Tariff Act of 1930, as amended (19 U.S.C. 
1557(a)). Turbine fuel intended for use as supplies on aircraft under 
section 309, Tariff Act of 1930, as amended, and withdrawn from a 
Customs bonded warehouse shall be entitled to the privileges provided 
for in section 309 if an amount equal to or exceeding the quantity of 
such fuel is established, as provided for in paragraph (c) of this 
section, to have been used on aircraft qualifying for the privileges 
provided for in section 309 within 30 days after the withdrawal of the 
fuel from the Customs bonded warehouse. Withdrawal of aircraft turbine 
fuel under this paragraph shall be in accordance with the procedures in 
Sec. Sec. 10.59 through 10.64, unless otherwise provided in this 
section. Withdrawals under this paragraph shall be annotated with the 
term ``Withdrawal under 19 CFR 10.62b(b)''.
    (c) Establishment of use of fuel by qualifying aircraft. (1) The 
person withdrawing aircraft turbine fuel under paragraph (b) of this 
section must establish that an aircraft qualifying for the privileges 
provided for in section 309, Tariff Act of 1930, as amended, used fuel 
in an amount equal to or exceeding the quantity of the fuel withdrawn 
that is not entered and upon which duties are not paid by submitting to 
Customs, at the port where the bonded warehouse entry was filed, within 
the time provided in paragraph (d) of this section, either--
    (i) Records prepared in the normal course of business effecting the 
transfer to identified (e.g., by aircraft company name, flight number, 
flight origin and destination, and date of flight) aircraft of fuel in 
an amount equal to or exceeding the quantity of the fuel withdrawn which 
is not entered and on which duties are not paid and objective evidence 
that the aircraft to which the fuel was transferred were actually used 
in trade qualifying for the privileges provided in section 309, Tariff 
Act of 1930, as amended; or
    (ii) A certification (documentary or electronic) that:
    (A) All of the fuel withdrawn was intended for use on aircraft 
entitled to the privileges provided for in section 309;
    (B) Within 30 days of the date of withdrawal from warehouse, an 
amount of fuel equal to or exceeding the quantity of the fuel withdrawn 
which is not entered and on which duties are not paid was transferred as 
supplies to aircraft entitled to the privileges provided for in section 
309;
    (C) All of the aircraft into which fuel is loaded hereunder were 
used in a trade provided for in section 309; and
    (D) The person making the certification possesses evidence 
(documentary or electronic) available for Customs inspection at a named 
place which supports each of the above statements.
    (2) Upon request by Customs, the person who submits the 
certification provided for in paragraph (c)(1) of this section shall 
promptly provide the evidence required to support the claim for

[[Page 126]]

treatment under this section (including the records described in Sec. 
10.62b(c)(1)(i)) and Sec. Sec. 10.62 and 19.6(d) and each of the 
statements in the certification.
    (d) Time for establishment of use of fuel by qualifying aircraft. 
The person withdrawing aircraft turbine fuel under paragraph (b) of this 
section shall submit the records or certification provided for in 
paragraph (c) of this section by the 40th day after the date of 
withdrawal of the fuel unless the fuel was withdrawn under a blanket 
withdrawal under paragraph (g) of this section. If the fuel was 
withdrawn under a blanket withdrawal, the person withdrawing aircraft 
turbine fuel under this section shall submit the records or 
certification provided for in paragraph (c) of this section by the 40th 
day after all of the fuel covered by the blanket permit to withdraw has 
been withdrawn.
    (e) Treatment of turbine fuel withdrawn but not used on qualifying 
aircraft within 30 days. If turbine fuel is withdrawn from a Customs 
bonded warehouse under paragraph (b) of this section but fuel in an 
amount less than the quantity withdrawn is established to have been used 
within 30 days of the date of withdrawal from warehouse on aircraft 
qualifying for the privileges provided for in section 309, Tariff Act of 
1930, as amended, a withdrawal for consumption shall be filed and duties 
shall be deposited for the excess of fuel so withdrawn over that used on 
aircraft so qualifying. Such withdrawal shall be filed and such duties 
shall be deposited by the 40th day after the date of withdrawal of the 
fuel in accordance with the procedures in Sec. 144.38 of this chapter. 
Interest shall be payable and deposited with such duties, calculated 
from the date of withdrawal at the rate of interest established under 26 
U.S.C. 6621.
    (f) Liquidated damages. Failure to account for turbine fuel 
withdrawn under paragraphs (b) through (h) of this section shall result 
in liquidated damages against the person withdrawing the turbine fuel, 
as provided for under Sec. 113.62 of this chapter. Such failure to 
account for turbine fuel includes:
    (1) The failure to timely file the withdrawal for consumption and 
payment of duty, with interest, on the quantity of fuel so withdrawn in 
excess of the quantity of fuel established to have been used on 
qualifying aircraft within 30 days of withdrawal, as provided for in 
paragraph (e) of this section;
    (2) The failure to timely file the evidence or certification 
establishing such use of the fuel which is not entered and on which 
duties are not paid, as provided for in paragraph (c) of this section; 
or
    (3) The failure to promptly provide the evidence required to support 
the claim for treatment under paragraph (b) of this section, upon 
request by Customs, as provided for in paragraph (c)(2) of this section.
    (g) Blanket withdrawals. Blanket withdrawals, as provided for in 
Sec. Sec. 10.62 and 19.6(d), may be used for withdrawals from warehouse 
under section 557(a), Tariff Act of 1930, as amended, and paragraphs (b) 
through (h) of this section, under the procedures provided in Sec. Sec. 
10.62 and 19.6(d) except that--
    (1) Application by the withdrawer for a blanket permit to withdraw 
shall be on the warehouse entry, or on the warehouse entry/entry summary 
when used as an entry, annotated with the words ``Some or all of the 
merchandise will be withdrawn under blanket permit per Sec. Sec. 10.62, 
10.62b, and 19.6(d).'';
    (2) Turbine fuel withdrawn under a blanket permit as authorized in 
this paragraph may be delivered at a port other than the port of 
withdrawal;
    (3) Customs acceptance of a properly completed application for a 
blanket permit to withdraw, on the warehouse entry or warehouse entry/
entry summary, will constitute approval of the blanket permit to 
withdraw;
    (4) A copy of the approved blanket permit to withdraw will be 
delivered to the warehouse proprietor, whereupon fuel may be withdrawn 
under the terms of the blanket permit;
    (5) The withdrawal document to be placed in the proprietor's permit 
file folder (see Sec. 19.6(d)(2)) will be a commercially acceptable 
document of receipt (such as a ``withdrawal ticket'') issued by the 
warehouse proprietor, identified with a unique alpha-numeric code and 
containing the following information:
    (i) Identity of withdrawer;

[[Page 127]]

    (ii) Identity of warehouse and tank from which fuel is withdrawn;
    (iii) Date of withdrawal;
    (iv) Type of merchandise withdrawn; and
    (v) Quantity of merchandise withdrawn.
    (6) The date of withdrawal, for purposes of calculating the 30-day 
period in which fuel must be used on qualifying aircraft under this 
section, shall be the date on which physical removal of the fuel from 
the warehouse commences;
    (7) The blanket permit summary prepared by the proprietor as 
provided for in Sec. 19.6(d)(4) shall be prepared when all of the fuel 
covered by the blanket permit has been withdrawn and shall account for 
all merchandise withdrawn under the blanket permit, as required by Sec. 
19.6(d)(4), by stating, in summary form, the unique alpha-numeric codes 
and information required in paragraph (g)(5) of this section, as well as 
the identity of the warehouse entry to which the withdrawal is 
attributed;
    (8) The certification on the blanket permit summary (see Sec. 
19.6(d)(4)) shall be that the merchandise listed thereunder was 
withdrawn in compliance with Sec. Sec. 10.62, 10.62b, and 19.6(d); and
    (9) The person withdrawing aircraft turbine fuel under these blanket 
procedures shall submit the records or certification provided for in 
Sec. 10.62b(c) by the 40th day after all of the fuel covered by the 
blanket permit has been withdrawn (see Sec. 10.62b(d)). At the 
discretion of the port director for the port where blanket withdrawal 
was approved, submission of the records and evidence required to 
establish use of the fuel on qualifying aircraft may be required to be 
submitted electronically, in a format compatible with Customs electronic 
record-keeping systems.
    (h) Recordkeeping. The person withdrawing aircraft turbine fuel from 
warehouse under this section is subject to the recordkeeping 
requirements in 19 U.S.C. 1508 and 1509, as provided for in part 162 of 
this chapter.

[T.D. 96-18, 61 FR 6778, Feb. 22, 1996, as amended by T.D. 99-33, 64 FR 
16347, Apr. 5, 1999]



Sec. 10.63  Landing of supplies and stores from receiving vessel in the 
United States.

    Supplies or stores laden on a vessel duty and tax free under section 
309, Tariff Act of 1930, as amended, may be landed under Customs 
supervision under proper permit, the same as if they had been laden in a 
foreign country. See Sec. 4.39 of this chapter. Except when transfer to 
another vessel entitled to the free withdrawal privilege is permitted 
under the original withdrawal under section 309, Tariff Act of 1930, as 
amended, the landed articles shall be treated as an importation from a 
foreign country.

[28 FR 14663, Dec. 31, 12963, as amended by T.D. 89-1, 53 FR 51250, Dec. 
21, 1988; T.D. 97-82, 62 FR 51769, Oct. 3, 1997]



Sec. 10.64  Crediting or cancellation of bonds.

    (a) Except as stated below, a bond on Customs Form 301, containing 
the bond conditions set forth in Sec. 113.62 of this chapter may be 
credited or canceled in respect of such articles upon the vessel's 
departure from the port of lading in a class of trade or business 
entitling the articles to exemption from duty and tax under the statute. 
The withdrawer shall cause the merchandise to be delivered to the lading 
vessel, and shall provide such evidence of lading as required by the 
port director within 30 days after lading, except as provided in this 
section. If the vessel is not operated by the United States and proceeds 
in ballast from the port where the articles are laden to another port to 
lade passengers or cargo for carriage in a class of trade specified in 
section 309, Tariff Act of 1930, as amended, the bond may be credited or 
canceled upon the filing with the director of the port of withdrawal 
within 3 months after the date of withdrawal of a proper declaration as 
prescribed below. The declaration shall be executed by one of the 
following who has knowledge of the facts:
    (1) The operations manager or port captain for the vessel on which 
the articles are laden but not a representative of the supplier.
    (2) The master or other officer of the vessel on which the articles 
are laden. The declaration shall be in substantially the following form:


[[Page 128]]


I,______________________________________________________________________
(Operations manager, port captain, master, or other officer) of the 
vessel ------------ declare that I have knowledge of the facts set forth 
herein, and that upon the lading of the articles described below covered 
by withdrawal No. --------, filed at ----------------(Name of port), the 
vessel then proceeded in ballast to ----------------(Name of port) to 
lade cargo or passengers; that the vessel was suitable for service in 
the class of trade checked below with fittings, outfit, and equipment 
for such trade already installed when it so departed in ballast; and 
that upon arrival it proceeded to engage in the carriage of cargo or 
passengers in such trade, except as stated below:
________________________________________________________________________
                                        (If no exception, note ``None'')

1. Foreign Trade.
2. Trade between Atlantic and Pacific ports of the United States, when 
          such trade is not prohibited by coastwise laws.
3. Trade between the United States and any of its possessions, when such 
          trade is not prohibited by coastwise laws.
4. Trade between Alaska or Hawaii and any other part of the United 
          States, when such trade is not prohibited by coastwise laws.

    Description of articles:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

________________________________________________________________________
                                                        (Name and title)

    (b) A declaration as to the intended business or trade of a vessel 
may, in the discretion of the port director, be accepted in lieu of a 
declaration prescribed in paragraph (a) of this section when the amount 
of duty or tax, or both, involved in a single lading is less than $100.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 84-213, 49 FR 41166, 
Oct. 19, 1984]



Sec. 10.64a  [Reserved]



Sec. 10.65  Cigars and cigarettes.

    (a) Imported cigars and cigarettes in bonded warehouse or otherwise 
in Customs custody, and such articles manufactured with the use of 
imported materials in a bonded manufacturing warehouse of class 6, may 
be withdrawn under section 317, Tariff Act of 1930, as amended, for 
consumption beginning beyond the 3-mile limit or international boundary, 
as the case may be, (1) on vessels actually engaged in the foreign, 
intercoastal, or noncontiguous territory trade within the purview of 
Sec. 10.59(a); (2) on vessels departing from the port where the 
withdrawal is made directly for a foreign port, a port on the opposite 
coast, or a port in one of the possessions of the United States; or (3) 
on vessels of war or other governmental activity.
    (b) The privilege shall not be granted to vessels stationed in 
American waters for an indefinite period without sailing schedules, nor 
shall it be granted to aircraft of foreign registry of a country for 
which there is not in effect a finding and advice by the Department of 
Commerce under section 309(d), Tariff Act of 1930, as amended, that such 
country allows privileges to aircraft registered in the United States 
substantially reciprocal to those described in section 317, Tariff Act 
of 1930, as amended. See section 10.59(f).
    (c) With the following additions and exceptions, the same procedure 
shall be followed as in the case of withdrawals under section 309(a), 
Tariff Act of 1930, as amended.
    (1) No bond shall be required in the case of vessels operated by the 
United States Government.
    (2) When a shipping case containing cigars and cigarettes is made up 
of a number of units, each in a separate package, such units may be 
withdrawn separately, provided each unit is marked and numbered for 
identification and contains not less than 250 cigars or 1,000 
cigarettes. In the case of imported cigars and cigarettes so packed, 
only one unit from each shipping case shall be opened for examination, 
unless the port director shall deem it necessary for the protection of 
the revenue to examine a greater quantity. Imported tobacco products on 
which the duty or internal-revenue tax has been paid may not be 
withdrawn under section 317, Tariff Act of 1930, as amended, with a 
drawback of such duty or internal-revenue tax.
    (3) When all the units in such shipping case are not to be withdrawn 
at the same time or for use on the same vessel, a blanket withdrawal may 
be filed for the entire case in lieu of a separate withdrawal for each 
unit. In such event, the withdrawal shall be retained

[[Page 129]]

by the warehouse proprietor until delivery receipts are obtained for the 
entire quantity covered by the withdrawal, provided the total period of 
time prior to delivery to the using vessel or aircraft does not exceed 5 
years. A bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter, when required, shall be filed at 
the time of or prior to the removal of any of the merchandise from the 
warehouse for delivery to the vessel on which it is to be used.
    (4) Merchandise for which blanket withdrawals are filed shall be 
stored in a separate room or enclosure in a bonded warehouse under 
separate locks, and the merchandise clearly marked to show that it has 
been withdrawn. If, at the time of any such inventory, any merchandise 
is missing and not properly accounted for, duties shall be paid thereon 
before any further withdrawals are permitted.
    (5) The declaration of use, when required, shall include a statement 
that consumption of the articles covered by the withdrawal did not begin 
until the withdrawing vessel or aircraft had proceeded beyond the 3 mile 
limit or the international boundary.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 67-193, 32 FR 11764, 
Aug. 16, 1967; T.D. 70-73, 35 FR 5400, Apr. 1, 1970; T.D. 82-204, 47 FR 
49368, Nov. 1, 1982; T.D. 84-213, 49 FR 41166, Oct. 19, 1984; T.D. 89-1, 
53 FR 51250, Dec. 21, 1988]

                 Articles Exported for Exhibition, Etc.



Sec. 10.66  Articles exported for temporary exhibition and returned; 
horses exported for horse racing and returned; procedure on entry.

    (a) In connection with the entry of articles, including livestock or 
other animals, exported for temporary exhibition and returned and 
claimed to be exempt from duty under subheading 9801.00.50 or 
9801.00.60, Harmonized Tariff Schedule of the United States (HTSUS), 
there shall be filed:
    (1) A certificate of exportation on Customs Form 3311;
    (2) A declaration of the importer on Customs Form 4455 for articles 
of either domestic or foreign origin; and
    (3) In the case of animals of foreign origin taken abroad for 
exhibition in connection with a circus or menagerie, a copy of an 
inventory of these animals filed prior to their leaving the country with 
the director of the port of their departure.
    (b) If it is shown to be impracticable to produce the certificate of 
exportation required under paragraph (a)(1) of this section, the port 
director may accept other satisfactory evidence of exportation, or may 
take a bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter to secure the production of such 
certificate or other evidence.
    (c) Articles claimed to be exempt from duty under subheading 
9801.00.50 or 9801.00.60, Harmonized Tariff Schedule of the United 
States (HTSUS) (19 U.S.C. 1202), may be returned free of duty without 
formal entry and without regard to the requirements of paragraph (a) or 
(b) of this section if:
    (1) Prior to the exportation of such articles, an application on 
Customs Form 4455 (accompanied by an appropriate inventory, when 
required by law or by the port director) is filed with a declaration 
thereon that:
    (i) Any right to drawback of Customs duties with respect to that 
shipment was waived;
    (ii) Any internal revenue tax due has been paid and no refund 
thereof will be sought; and
    (iii) The merchandise was identified, registered, and exported in 
accordance with the regulations set forth in Sec. Sec. 10.8(e), (g), 
(h), and (i), governing the exportation of articles sent abroad for 
repairs, and
    (2) Upon return, a duplicate Customs Form 4455 (with accompanying 
inventory where one was required) is filed.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 74-242, 39 FR 33794, 
Sept. 20, 1974; T.D. 75-235, 40 FR 44319, Sept. 26, 1975; T.D. 78-153, 
43 FR 23709, June 1, 1978; T.D. 82-224, 47 FR 53727, Nov. 29, 1982; T.D. 
84-213, 49 FR 41166, Oct. 19, 1984; T.D. 87-75, 52 FR 20066, May 29, 
1987; T.D. 89-1, 53 FR 51250, Dec. 21, 1988; T.D. 94-1, 58 FR 69470, 
Dec. 30, 1993]



Sec. 10.67  Articles exported for scientific or educational purposes 
and returned; procedure on entry.

    (a) In connection with each entry of articles exported for 
scientific or educational purposes and returned under

[[Page 130]]

subheading 9801.00.40, Harmonized Tariff Schedule of the United States 
(HTSUS), the following shall be required, irrespective of the value of 
the shipment:
    (1) A certificate of exportation on Customs Form 3311;
    (2) A declaration by the foreign shipper in the same form as that 
prescribed in Sec. 10.66(a)(2) but stating that such articles were sent 
from the United States solely for temporary scientific or educational 
use and describing the specific use to which they were put while abroad.
    (3) A declaration of the ultimate consignee in substantially the 
following form:

Port of ----------------, Port Director's Office, --------, 19----.
    I, --------------------, declare that the several articles described 
in the annexed entry are, to the best of my knowledge and belief, the 
identical articles exported from the United States on the ------ day of 
------------, 19----, by ------------------ (Actual shipper) address --
--------------, for the account of ----------------, address ----------
------that they are returned to ----------------, address --------------
--, for the account of ----------------, address -------------- that the 
said articles were exported solely for temporary scientific or 
educational purposes and for no other use abroad than for exhibition, 
examination, or experimentation; that they are being returned without 
having been changed in condition in any manner, except by reason of 
their bona fide use as follows:
________________________________________________________________________
                                          (Describe change in condition)
________________________________________________________________________
________________________________________________________________________
                                                    (Ultimate consignee)

    (b) If it is shown to be impracticable to produce the certificate of 
exportation required by paragraph (a)(1) of this section, the port 
director may accept other satisfactory evidence of exportation. The port 
director may take a bond on Customs Form 301, containing the bond 
conditions set forth in Sec. 113.62 of this chapter to secure the 
subsequent production of any of the evidence or documents required by 
paragraph (a) of this section which are not available at the time of 
entry.
    (c) If, prior to the exportation of articles claimed to be exempt 
from duty under subheading 9801.00.40, Harmonized Tariff Schedule of the 
United States (HTSUS), an application on Customs Form 4455 (accompanied 
by an appropriate inventory when, in the discretion of the port 
director, such inventory is deemed necessary) was filed, such articles 
may be returned for the account of the exporter free of duty without 
formal entry, without regard to the requirements of paragraphs (a) and 
(b) of this section, upon the filing of the duplicate Customs Form 4455 
(with accompanying inventory, if one was required), and a declaration of 
the ultimate consignee in substantially the form set forth in paragraph 
(a)(3) of this section.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 74-242, 39 FR 33794, 
Sept. 20, 1974; T.D. 84-213, 49 FR 41166, Oct. 19, 1984; T.D. 89-1, 53 
FR 51250, Dec. 21, 1988; T.D. 94-1, 58 FR 69470, Dec. 30, 1993; T.D. 97-
82, 62 FR 51769, Oct. 3, 1997]

Theatrical Effects, Motion-Picture Films, Commercial Travelers' Samples, 
                           and Tools of Trade



Sec. 10.68  Procedure.

    (a) Theatrical scenery, properties, and effects, motion-picture 
films (including motion-picture films taken aboard a vessel for 
exhibition only during an outward voyage and returned for the same 
purpose during an inward voyage on the same or another vessel), 
commercial travelers' samples, and professional books, implements, 
instruments, and tools of trade, occupation, or employment (see Sec. 
148.53 of this chapter), of domestic or foreign origin, taken abroad may 
be returned without formal entry and without payment of duty if an 
exportation voucher from a carnet, when applicable, or an application on 
Customs Form 4455 was filed, and the merchandise was identified as set 
forth in Sec. 10.8, before exportation of the articles. Articles 
exported under cover of an A.T.A. carnet (where the carnet serves as the 
control document) may, in accordance with this paragraph, be returned 
without entry or the payment of duty. If Customs Form 4455 is utilized, 
commercial travelers' samples, professional books, implements, 
instruments, and tools of trade, occupation, or employment may be 
returned with either an informal entry or a declaration on Customs Form 
3299;

[[Page 131]]

theatrical scenery, properties, and effects and motion-picture films may 
be returned only with an informal entry. When articles other than those 
exported by mail or parcel post are examined and registered at one port 
and exported through another port, the port director may require proof 
of exportation in those cases where the carnet or Customs Form 4455 does 
not reflect that these articles were exported under Customs supervision. 
In the case of commercial travelers' samples taken abroad for temporary 
use, except where exportation involves certification of a carnet, port 
directors may waive examination of the samples at the time of 
exportation. When motion-picture films are to be taken aboard a vessel 
for exhibition only during an outward voyage and are to be returned for 
the same purpose during an inward voyage on the same or another vessel, 
port directors may waive examination and supervision at the time of 
exportation. When theatrical scenery, properties, and effects are taken 
abroad in sealed carload lots by rail for temporary use, the cars must 
be sealed by U.S. Customs officers for entry at any Canadian or Mexican 
port where U.S. Customs officers are stationed. Application and 
examination before the time of exportation is waived if a Customs Form 
4455 is filed with the U.S. Customs officer in the appropriate Canadian 
or Mexican port, and that officer examines the articles before they are 
released from foreign customs custody by the foreign customs officer.
    (b) When any such articles are to be returned to the United States 
from a contiguous foreign country in which a United States Customs 
officer is stationed, the articles may be presented to such officer with 
the duplicate copy of the application for examination and comparison 
with the descriptive list. Upon completion of such examination, the 
packages containing the articles shall be corded and sealed or forwarded 
in cars sealed by Customs officers and shall be manifested in the same 
manner as personal baggage. Articles so treated shall be released upon 
arrival in the United States and removal of the seals by Customs 
officers.
    (c) When commercial travelers' samples consisting of raw cotton are 
taken to and returned from Canada, the application on Customs Form 4455 
shall be executed in triplicate, two copies thereof to be returned to 
the traveler for surrender to the Customs officer on the return of the 
samples from Canada.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 69-146, 34 FR 9801, June 
25, 1969; T.D. 75-41, 40 FR 6646, Feb. 13, 1975; T.D. 82-49, 47 FR 
12160, Mar. 22, 1980; T.D. 82-116, 47 FR 27261, June 24, 1982]



Sec. 10.69  Samples to Great Britain and Ireland under reciprocal 
agreement.

    Descriptive lists of samples taken to Great Britain and Ireland by 
commercial travelers of the United States under the joint declarations 
of December 3 and 8, 1910 (State Department treaty series 552), shall be 
required in triplicate, verified by the affidavit of the commercial 
traveler before a Customs officer, and shall show that the samples are 
for use as models or patterns for the purpose of obtaining orders and 
not for sale and that the lists contain a full description of the 
articles. One copy shall be retained and the others shall be delivered 
to the commercial traveler--one for the identification of the samples on 
their return to the United States and one for the use of the foreign 
customs authorities. The latter copy must have been attested by a 
consular officer of the country concerned in the United States.

                            Animals and Birds

    Cross Reference: For regulations with respect to recognition of 
breeds and purebred animals, see 9 CFR part 151.



Sec. 10.70  Purebred animals for breeding purposes; certificate.

    (a) In connection with the entry of purebred animals for breeding 
purposes under subheading 0101.11.00, Harmonized Tariff Schedule of the 
United States (HTSUS), no claim for free entry shall be allowed in 
liquidation of the entry until the port director has received from the 
Department of Agriculture a certificate that the animal is purebred of a 
recognized breed and duly registered in a book of record recognized by 
the Secretary of Agriculture for that breed. Importers are required

[[Page 132]]

by regulation of the Department of Agriculture to make application for a 
certificate of pure breeding to the U.S. Department of Agriculture, 
Animal and Plant Health Inspection Service, Veterinary Services, on ANH 
Form 17-338 before the animal will be examined as required by 9 CFR 
151.7. Application for the certificate must be executed by the owner 
agent, or importer and filed at a port of entry designated in the 
regulations of the Department of Agriculture for the importation of 
animals (9 CFR 92.3). However, applications for certificates for dogs 
(other than dogs for handling livestock regulated under 9 CFR 92.18) and 
cats may be filed either at a designated port of entry or at any other 
port where Customs entry is made. The regulations of the Department of 
Agriculture prescribing the requirements for the issuance of 
certificates of pure breeding provide that all animals imported under 
such regulations must be accompanied to the port at which examination is 
to be made by certificates of pedigree and transfer of ownership in 
order that identification may be accomplished, and that, if such animals 
are moved from such port prior to the presentation of such certificates 
and transfers, such action shall constitute a waiver of any further 
claim to certification under such regulations.
    (b) In the cases of cats and dogs arriving at Canadian border ports, 
Customs officers and employees are hereby authorized and directed to 
make the examination required by such regulations of the Department of 
Agriculture. Customs officers and employees are also authorized and 
directed to make such examinations at the ports of New York and Boston, 
provided the dog or cat is brought into the United States by a 
passenger. At all airports, Customs officers shall make the examination 
of dogs and cats, whether or not accompanied by the owners, if there is 
no inspector of the Department of Agriculture stationed there or on duty 
at the time of arrival.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 68-154, 33 FR 8730, June 
14, 1968; T.D. 78-99, 43 FR 13060, Mar. 29, 1978; T.D. 87-75, 52 FR 
20066, May 29, 1987; T.D. 89-1, 53 FR 51250, Dec. 21, 1988]



Sec. 10.71  Purebred animals; bond for production of evidence; deposit 
of estimated duties; stipulation.

    (a) The animal may be released from Customs custody upon the 
furnishing by the importer of a bond on Customs Form 301, containing the 
bond conditions set forth in Sec. 113.62 of this chapter for the 
production within 6 months of (1) a certificate of pure breeding issued 
by the Department of Agriculture, and (2) the declaration required by 
Sec. 10.70(a) submitted in letter form if such declaration was not 
filed at the time of entry. The release of the animal from customs 
custody requires the presentation of the pedigree certificate and 
evidence of transfer of ownership in accordance with the regulations of 
the Department of Agriculture mentioned in Sec. 10.70(b).
    (b) Charges against the bond shall be canceled only upon the 
production of the required evidence or on payment of duties.
    (c) In cases where the pedigree certificate and evidence of transfer 
of ownership have been presented in accordance with the regulations of 
the Department of Agriculture, the importer, if he so elects, may, in 
lieu of giving a bond, deposit estimated duties and file a stipulation 
with the port director within 10 days after the date of entry to produce 
the declaration and certificate of pure breeding within 6 months from 
the date of entry, whereupon the liquidation of the entry shall be 
suspended. (See Sec. 113.42 of this chapter.)
    (d) If the pedigree certificate and evidence of transfer of 
ownership were not presented in accordance with such regulations of the 
Department of Agriculture, a deposit of estimated duties, in addition to 
the regular entry bond, shall be required.
    (e) When a passenger arriving in the United States with one or more 
dogs or cats and with the required certificates of pedigree and 
transfers of ownership in his possession furnishes a properly executed 
declaration as required by Sec. 10.70(a) along with an application to 
the Department of Agriculture on ANH Form 17-338 for a certificate of 
pure breeding, the entry of the animal(s) as duty-free under subheading 
0106.00.50, Harmonized Tariff Schedule of the

[[Page 133]]

United States (HTSUS), may be made on the passenger's baggage 
declaration if the value of the animals does not exceed $500. In such 
case the entry shall be supported by a bond on Customs Form 301, 
containing the bond conditions set forth in Sec. 113.62 of this chapter 
for the production within 6 months of a certificate of pure breeding. 
The bond shall be without surety or cash deposit unless the port 
director on the basis of information before him finds that a bond with 
surety or a cash deposit is necessary to protect the revenue.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 68-79, 33 FR 4461, Mar. 
13, 1968; T.D. 68-154, 33 FR 8731, June 14, 1968; T.D. 74-227, 39 FR 
32015, Sept. 4, 1974; T.D. 78-99 43 FR 13060, Mar. 29, 1978; T.D. 84-
213, 49 FR 41166, Oct. 19, 1984; T.D. 87-75, 52 FR 26142, July 13, 1987; 
T.D. 89-1, 53 FR 51250, Dec. 21, 1988; T.D. 93-66, 58 FR 44130, Aug. 19, 
1993]



Sec. Sec. 10.72-10.73  [Reserved]



Sec. 10.74  Animals straying across boundary for pasturage; offspring.

    When domestic animals for which free entry is to be claimed under 
subheading 9801.00.90, Harmonized Tariff Schedule of the United States, 
have strayed across the boundary line, they may be returned, together 
with their offspring, without entry if brought back within 30 days; 
otherwise entry shall be required. The owner of any such animal shall 
report its return to the nearest Customs office and hold it for such 
inspection and treatment as may be deemed necessary by a representative 
of the Animal and Plant Health Inspection Service of the Department of 
Agriculture. Any such arrival found not to have been so reported or held 
shall be subject to seizure and forfeiture pursuant to 18 U.S.C. 545.

[T.D. 87-75, 52 FR 20067, May 29, 1987, as amended by T.D. 89-1, 53 FR 
51250, Dec. 21, 1988]



Sec. 10.75  Wild animals and birds; zoological collections.

    When wild animals or birds are claimed to be free of duty under 
subheading 9810.00.70, Harmonized Tariff Schedule of the United States 
(HTSUS), (19 U.S.C. 1202), the port director may, at his discretion, 
require appropriate proof that the animals or birds were specially 
imported pursuant to negotiations conducted prior to importation for the 
delivery of animals or birds of a named species meeting agreed 
specifications of reasonable particularity and that they are intended at 
the time of importation for public exhibition in a collection maintained 
for scientific or educational purposes and not for sale or for use in 
connection with any enterprise conducted for profit. The fact that an 
animal or bird may have been sent on approval shall not preclude free 
entry under subheading 9810.00.70, HTSUS, when it is actually accepted 
as a part of the zoological collection and so exhibited.

[T.D. 85-123, 50 FR 29953, July 23, 1985, as amended by T.D. 89-1, 53 FR 
51250, Dec. 21, 1988; T.D. 97-82, 62 FR 51769, Oct. 3, 1997]



Sec. 10.76  Game animals and birds.

    (a) The following classes of live game animals and birds may be 
admitted free of duty for stocking purposes under the provisions of 
subheading 9817.00.70 without reference to the United States Customs 
Service, if the requirements of the Fish and Wildlife Service, 
Department of the Interior, have been complied with.

                                 animals

    1. Cervidae, commonly known as deer and elk.
    2. Leporidae, commonly known as rabbits.
    3. Sciuridae, commonly known as squirrels.

                                  birds

    1. Anatidae, commonly known as ducks and geese.
    2. Gallinae, commonly known as turkeys, grouse, pheasants, 
partridges, and quail.
    3. Otididae, commonly known as bustards.
    4. Tinamidae, commonly known as tinamous.

    (b) Application for the free entry of other live animals or birds 
under subheading 9817.00.70, Harmonized Tariff Schedule of the United 
States shall be referred to the United States Customs Service for 
consideration. Animals imported for fur-farming purposes shall not be 
admitted free of duty under that paragraph.
    (c) [Reserved]
    (d) Game animals and birds killed in foreign countries by residents 
of the United States, if not imported for sale or other commercial 
purposes, may be

[[Page 134]]

admitted free of duty without entry, if the person has no merchandise 
requiring a written declaration upon the filing of a declaration on U.S. 
Fish and Wildlife Service Form 3-177, Declaration for Importation or 
Exportation of Fish or Wildlife. No bond or cash deposit to insure the 
destruction or exportation of the plumage of such birds shall be 
required.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 82-145, 47 FR 35475, 
Aug. 16, 1982; T.D. 86-118, 51 FR 22515, June 20, 1986; T.D. 89-1, 53 FR 
51250, Dec. 21, 1988; T.D. 90-78, 55 FR 40166, Oct. 2, 1990]



Sec. 10.77  [Reserved]

                     Products of American Fisheries



Sec. 10.78  Entry.

    (a) No entry shall be required for fish or other marine products 
taken on the high seas by vessels of the U.S. or by residents of the 
U.S. in undocumented vessels owned in the U.S. when such fish or other 
products are brought into port by the taking vessel or are transferred 
at sea to another fishing vessel of the same fleet and brought into 
port.
    (b) An American fishery, within the meaning of Subchapter XV of 
Chapter 98, Harmonized Tariff Schedule of the United States, is defined 
as a fishing enterprise conducted under the American flag by vessels of 
the United States on the high seas or in foreign waters in which such 
vessels have the right by treaty or otherwise, to take fish or other 
marine products and may include a shore station operated in conjunction 
with such vessels by the owner or master thereof.
    (c) The employment of citizens of a foreign country by an American 
fishery is permissible but the purchase by an American fishery of fish 
or other marine products taken by citizens of a foreign country on the 
high seas or in foreign waters will subject such fish or other marine 
products to treatment as foreign merchandise.
    (d) Products of an American fishery shall be entitled to free entry 
although prepared, preserved, or otherwise changed in condition, 
provided the work is done at sea by the master or crew of the fishery or 
by persons employed by and under the supervision of the master or owner 
of the fishery. Fish (except cod, haddock, hake, pollock, cusk, 
mackerel, and swordfish) the product of an American fishery landed in a 
foreign country and there not further advanced than beheaded, 
eviscerated, packed in ice, frozen and with fins removed, shall be 
entitled to free entry, whether or not such processing is done by the 
American fishery. Products of an American fishery prepared or preserved 
on the treaty coasts of Newfoundland, Magdalen Islands, or Labrador, as 
such coasts are defined in the Convention of 1818 between the United 
States and Great Britain, shall be entitled to free entry only if the 
preparation or preservation is done by an American fishery.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 87-75, 52 FR 20067, May 
29, 1987; T.D. 89-1, 53 FR 51250, Dec. 21, 1988]



Sec. 10.79  [Reserved]

                          Salt For Curing Fish



Sec. 10.80  Remission of duty; withdrawal; bond.

    Imported salt in bond may be used in curing fish taken by vessels 
licensed to engage in the fisheries, and in curing fish in the shores of 
the navigable waters of the U.S., whether such fish are taken by 
licensed or unlicensed vessels, and upon proof that the sale has been 
used for either of such purposes, the duties on the same shall be 
remitted. (Section 313(e), Tariff Act of 1930, 19 U.S.C. 1313(e)). 
Imported salt entered for warehouse may be withdrawn under bond for use 
in curing fish. Upon proof that the salt has been so used, the duties 
thereon shall be remitted. In no case shall the quantity of salt 
withdrawn exceed the reasonable requirements of the case. Withdrawal 
shall be made on Customs Form 7501. Each withdrawal shall contain the 
statement prescribed for withdrawals in Sec. 144.32 of this chapter. 
When the withdrawal is made by a person other than the importer of 
record, a bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter for the production of proof of

[[Page 135]]

proper use shall be filed. Upon acceptance of the bond, a withdrawal 
permit shall be issued on Customs Form 7501.

[T.D. 89-1, 53 FR 51251, Dec. 21, 1988, as amended by T.D 95-81, 60 FR 
52295, Oct. 6, 1995]



Sec. 10.81  Use in any port.

    (a) Salt withdrawn under bond for use in curing fish on the shores 
of navigable waters may be used for such purpose at any port, but the 
evidence of use in such cases shall be submitted through the director of 
the port where the salt was used.
    (b) If desired, salt to be used in curing fish on shore at another 
port than that in which it is warehoused in bond may be withdrawn under 
a transportation entry and shipped in bond to the other port at which it 
is to be used, where it may be entered on Customs Form 7501 which shall 
show withdrawal of the salt for use in curing fish. Thereupon, and upon 
the filing of a bond on Customs Form 301, containing the bond conditions 
set forth in Sec. 113.62 of this chapter, such salt may be used without 
being sent to a bonded warehouse or public store. In such a case the 
proof of use shall be filed at the latter port.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 84-213, 49 FR 41166, 
Oct. 19, 1984; T.D. 87-75, 52 FR 20067, May 29, 1987; T.D 95-81, 60 FR 
52295, Oct. 6, 1995]



Sec. 10.82  [Reserved]



Sec. 10.83  Bond; cancellation; extension.

    (a) If it shall appear to the satisfaction of the port director 
holding the bond referred to in Sec. 10.80, that the entire quantity of 
salt covered by the bond has been duly accounted for, either by having 
been used in curing fish or by the payment of duty, the port director 
may cancel the charges against the bond. The port director may require 
additional evidence in corroboration of the proof of use produced.
    (b) On application of the person making the withdrawal, the period 
of the bond may be extended 1 year so as to allow the salt to be used 
during the time of extension in curing fish with the same privileges as 
if used during the original period.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 87-75, 52 FR 20067, May 
29, 1987]

                           Automotive Products



Sec. 10.84  Automotive vehicles and articles for use as original equipment 
in the manufacture of automotive vehicles.

    (a)(1) Certain motor vehicles and motor vehicle equipment are 
eligible for duty-free entry as proclaimed by the President under the 
Automotive Products Trade Act of 1965. The articles designated for such 
duty-free treatment are defined in General Note 3(c)(iii), HTSUS (19 
U.S.C. 1202). Specifically, such articles are those designated [as 
``Free (B)''] in the ``Special'' subcolumn in Chapter 87, HTSUS, and 
must qualify as ``Canadian articles'' as defined in General Note 
3(c)(iii)(A)(1), HTSUS. To claim exemption from duty under the 
Automotive Products Trade Act of 1965, an importer must establish, to 
the satisfaction of the appropriate Customs officer, that the article in 
question qualifies as a ``Canadian article'' for purposes of General 
Note 3(c)(iii)A)(1), HTSUS. The Customs officer may accept as 
satisfactory evidence a certificate executed by the exporter as set 
forth in paragraph (b) of this section, subject to any verification he 
may deem necessary. Alternatively, the Customs officer may determine 
that under the circumstances of the importation a certificate is 
unnecessary.
    (2) Under the United States-Canada Free-Trade Agreement and 
implementing legislation (Pub. L. 100-449, 102 Stat. 1851) a 
manufacturer of motor vehicles may elect to average, over its 12-month 
financial year, its calculation of the value-content requirement for 
vehicles in establishing its eligibility for tariff preference. 
Requirements for averaging are set forth in Sec. 10.310 and 10.311.
    (b)(1) When all materials used at any stage in the production of the 
imported article are wholly obtained or produced in Canada or the United 
States, or both, a certificate in the following form may be accepted as 
evidence that the commodity is a ``Canadian article'':

    All materials contained in the product covered by the ---------- 
(Describe the invoice, bill of lading, or other document or statement 
identifying the shipment) annexed or

[[Page 136]]

appended to this certificate of Canadian origin at the time it was 
subscribed were wholly obtained or produced in Canada or the United 
States, or both. No materials other than those which were wholly 
obtained or produced in Canada or the United States, or both, were 
incorporated into this product or any of its components at any stage of 
production or in the production of any intermediate product used at any 
stage in the chain of production in Canada or the United States, or 
both.

    (2) When any material used at any stage in the production of an 
imported article or any of its components is not wholly obtained or 
produced in Canada or the United States, or both, a certificate in the 
following form may be accepted as evidence that the commodity is 
nevertheless a ``Canadian article'':

    The product covered by the ---------- (Describe the invoice, bill of 
lading, or other document or statement identifying the shipment) annexed 
or appended to this certificate of Canadian origin at the time it was 
subscribed is an originating good so as to be a Canadian article. There 
were used in its production in Canada ---------- (Description sufficient 
for tariff classification of the materials, and number of units) of 
third country materials of which the price paid was ---------- per unit 
of quantity, plus ---------- which represents all costs incurred in 
transporting the materials to the location of the producer and the 
duties, taxes, and brokerage fees on the materials, if such costs were 
not included in the price paid.

    (3) If such Customs officer is satisfied that the revenue will be 
protected adequately thereby, he may accept in lieu of the certificate 
specified in paragraph (b)(2) of this section a certificate in the 
following form when the merchandise covered thereby has been produced 
with third country material but is an originating good under a specific 
rule of origin for the merchandise:

    The product covered by the ---------- (Describe the invoice, bill of 
lading, or other document or statement identifying the shipment) annexed 
or appended to this certificate of Canadian origin at the time it was 
subscribed is an originating good so as to be a Canadian article. There 
were or may have been used in its production in Canada or the United 
States, or both, materials of a third country.
    It is impractical to ascertain the exact number of units of third 
country material, if any, used in its production or the price paid (and 
other costs required to be included in the price paid) of such materials 
but to the best of (my) (our) (its) knowledge the materials are 
described (sufficient for tariff classification purposes) as follows: --
--------.

    (4) The certificates described in paragraphs (b)(2) and (b)(3) of 
this section shall not be accepted if the statements therein make it 
evident that the importation is not a ``Canadian article'' within the 
meaning of General Note 3(c), HTSUS.
    (5) If more than one kind of article is covered by a certificate 
provided for in paragraph (b) (1), (2), or (3) of this section, the 
information required by the certificate shall be shown with respect to 
each kind. When more than one kind of material, other than originating 
material, is used in the production of an article covered by such a 
certificate, the certificate shall state the number of units, a 
description sufficient for tariff classification purposes, the price 
paid, and, if not included in the price paid, the costs incurred in 
transporting the materials to the location of the producer and duties, 
taxes and brokerage fees paid in Canada and/or the United States on the 
material, per unit of each kind of materials.
    (6) A certificate conforming to paragraph (b) (1), (2), or (3) of 
this section shall be accepted as evidence of the facts alleged therein 
only if:
    (i) There is annexed thereto a copy of the commercial invoice or 
bill of lading covering the articles or other documentary evidence which 
identifies the article to which the certificate pertains,
    (ii) The certificate is signed by the manufacturer or producer of 
the article to which it pertains, or by the person who exported the 
articles from Canada, and
    (iii) It clearly appears that such copy or other documentary 
evidence was annexed to the certificate when it was signed.
    (c) In lieu of the certification in paragraph (b) (1), (2), or (3) 
of this section, a manufacturer of motor vehicles who claims a 
preference under the United States-Canada Free-Trade Agreement and 
elects to average pursuant to Sec. 10.310(a), shall be subject to the 
requirements of Sec. Sec. 10.301 to 10.311 of this part.
    (d) When an importer makes an entry, or withdrawal from warehouse, 
for consumption of articles for use as

[[Page 137]]

``original motor-vehicle equipment'' as that term is defined in General 
Note 3(c)(iii), HTSUS, he shall file in connection therewith his 
declaration that the articles are being imported for use as original 
equipment in the manufacture in the United States of the kinds of motor 
vehicles specified in the General Note and furnish the name and address 
of the motor vehicle manufacturer. A copy of the written order, 
contract, or letter of intent shall be attached to the importer's 
declaration except that if the port director is satisfied that a copy of 
the written order, contract, or letter of intent will be made available 
by the importer or ultimate consignee for inspection by customs 
officials upon request during a period of 3 years from the date of such 
entry or withdrawal from warehouse, the production of such documents 
will not be required. Proof of use need not be furnished.
    (e) If, after a Canadian article has been accorded the status of 
original motor-vehicle equipment, it is decided to divert the article 
from its intended use in the manufacture in the United States of motor 
vehicles, the importer or other person deciding to divert the article 
from such intended use shall give notice in writing of the decision to 
the director of the port where entry was made or where the offices of 
the importer are located and either make arrangements for its 
destruction or exportation under Customs supervision or pay duties in 
accordance with General Note 3(c)(iii)(B)(2), HTSUS. If such article is 
not destroyed or exported under Customs supervision or the duties paid, 
the article, or its value, shall be subject to forfeiture.

[T.D. 89-3, 53 FR 51765, Dec. 23, 1988, as amended by T.D. 92-8, 57 FR 
2453, Jan. 22, 1992; T.D. 93-66, 58 FR 44130, Aug. 19, 1993]

                   Master Records, And Metal Matrices



Sec. 10.90  Master records and metal matrices.

    (a) Consumption entries covering importations under subheading 
8524.99.20, HTSUS, shall be filed at a port in the Customs district in 
which the factory where the articles will be used is located.
    (b) The invoice filed with the entry shall contain or be supported 
by a detailed statement of the cost of production, in the country where 
made, of each master record or metal matrix covered thereby.
    (c) A bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter shall be filed for importations 
under this section.
    (d) Entries already filed and future entries shall be liquidated in 
due course without the assessment of duty, but liability on bonds given 
with the entries shall be discontinued with respect to any article 
covered thereby only upon payment of liquidated damages in an amount 
equal to the duties which would have accrued had the master records or 
metal matrices been imported for use otherwise than in the manufacture 
of sound records for export purposes, or upon satisfactory proof that 
the master records or metal matrices obtained therefrom have been 
exported or destroyed under Customs supervision, and that all sound 
records made with the use of such articles have been exported.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 84-213, 49 FR 41166, 
Oct. 19, 1984; T.D. 87-75, 52 FR 20067, May 29, 1987; T.D. 89-1, 53 FR 
51251, Dec. 21, 1988; T.D. 90-78, 55 FR 40166, Oct. 2, 1990; T.D. 97-82, 
62 FR 51769, Oct. 3, 1997]

                               Prototypes



Sec. 10.91  Prototypes used exclusively for product development and 
testing.

    (a) Duty-free entry; declaration of use; extension of liquidation--
(1) Entry or withdrawal for consumption. Articles defined as 
``prototypes'' and meeting the other requirements prescribed in 
paragraph (b) of this section may be entered or withdrawn from warehouse 
for consumption, duty-free, under subheading 9817.85.01, Harmonized 
Tariff Schedule of the United States (HTSUS), on CBP Form 7501 or an 
electronic equivalent. A separate entry or withdrawal must be made for a 
qualifying prototype article each time the article is imported/
reimported to the United States.
    (2) Importer declaration. (i) Entry accepted as declaration. Entry 
or withdrawal from warehouse for consumption under HTSUS subheading 
9817.85.01

[[Page 138]]

may be accepted by the port director as an effective declaration that 
the articles will be used solely for the purposes stated in the 
subheading.
    (ii) Proof (declaration) of actual use. If it is believed the 
circumstances so warrant, the port director may request the submission 
of proof of actual use, executed and dated by the importer. The title of 
the party executing the proof of actual use must be set forth. If proof 
of actual use is requested, the importer must provide it within three 
years after the date the article is entered or withdrawn from warehouse 
for consumption. Liquidation of the related entry may be extended until 
the requested proof or declaration of actual use is received or until 
the three-year period from the date of entry allowed for the receipt of 
such proof has expired. While requested proof of use must be given to 
CBP within three years of the date of entry, the prototype may continue 
to be used thereafter for the purposes enumerated in HTSUS subheading 
9817.85.01. If requested proof of use is not timely received, the entry 
will be liquidated as dutiable under the tariff provision that would 
otherwise apply to the imported article. While there is no particular 
form for this declaration, it may either be submitted in writing, or 
electronically as authorized by CBP, and must include the following:
    (A) A description of the use that is being and/or that has been made 
of the articles set forth in sufficient detail so as to enable the port 
director to determine whether the articles have been entitled to entry 
as claimed;
    (B) A statement that the articles have not and are not to be put to 
any other use after the articles have been entered or withdrawn from 
warehouse for consumption and prior to the completion of their use under 
HTSUS 9817.85.01 (also see paragraphs (c) and (d) of this section 
concerning the disposition(s) to which the articles may be put following 
their use under HTSUS subheading 9817.85.01); and
    (C) A statement that the articles or any parts of the articles have 
not been and are not intended to be sold, or incorporated into other 
products that are sold, after the articles have been entered or 
withdrawn from warehouse for consumption and prior to the completion of 
their use as provided in HTSUS subheading 9817.85.01 ( see paragraph 
(b)(2)(ii) of this section).
    (b) Articles classifiable as prototypes-- (1) Prototypes defined. In 
accordance with U.S. Note 6(a) to subchapter XVII of chapter 98, HTSUS, 
applicable to subheading 9817.85.01, the term ``prototypes'' means 
originals or models of articles pertaining to any industry that:
    (i) Are either in the preproduction, production or postproduction 
stage and are to be used exclusively for development, testing, product 
evaluation, or quality control purposes (not including automobile racing 
for purse, prize or commercial competition); and
    (ii) In the case of originals or models of articles that are either 
in the production or postproduction stage, are associated with a design 
change from current production (including a refinement, advancement, 
improvement, development or quality control in either the product itself 
or the means of producing the product).
    (2) Additional requirements. In accordance with U.S. Note 6(b) and 
(c) to subchapter XVII of chapter 98, HTSUS, applicable to subheading 
9817.85.01, the following additional restrictions apply to articles that 
may be classified as prototypes:
    (i) Importations limited. Prototypes may be imported pursuant to 
this section only in limited noncommercial quantities in accordance with 
industry practice.
    (ii) Sale prohibited after entry and prior to use. Prototypes or 
parts of prototypes may not be sold, or be incorporated into other 
products that are sold into the commerce of the United States, after the 
prototypes have been entered or withdrawn from warehouse for consumption 
under HTSUS subheading 9817.85.01, except that, after having been used 
for the purposes for which they were entered or withdrawn from warehouse 
under HTSUS subheading 9817.85.01, such prototypes or any part(s) of the 
prototypes may be sold as scrap, waste, or for recycling, as prescribed 
in paragraph (c) of this section.
    (iii) Articles subject to laws of another agency. Articles that are 
subject to licensing requirements, or that must

[[Page 139]]

comply with laws, rules or regulations administered by an agency other 
than CBP before being imported, may be entered as prototypes pursuant to 
this section if they meet all applicable provisions of law and otherwise 
meet the definition of prototypes in paragraph (b)(1) of this section.
    (iv) Articles excluded from being prototypes. Articles that are in 
fact subject at the time of entry to quantitative restrictions, 
antidumping orders or countervailing duty orders are excluded from being 
classified as prototypes under this section.
    (c) Sale of prototype following use. (1) Sale. Prototypes or any 
part(s) of prototypes, after having been used for the purposes for which 
they were entered or withdrawn under HTSUS subheading 9817.85.01, may 
only be sold as scrap, waste, or for recycling. This includes a 
prototype or any part thereof that is incorporated into another product, 
as scrap, waste, or recycled material. If sold as scrap, waste, or for 
recycling, applicable duty must be paid on the prototypes or parts as 
provided in paragraph (c)(3) of this section, at the rate of duty in 
effect for such scrap, waste, or recycled materials at the time the 
prototypes were entered or withdrawn for consumption.
    (2) Notice of sale required. If, after a prototype has been used for 
the purposes contemplated in HTSUS subheading 9817.85.01, the prototype 
or any part(s) of the prototype (including a prototype or any part that 
is incorporated into another product) is sold as scrap, waste, or for 
recycling, the importer must provide notice of such sale to the port 
director where the entry or withdrawal of the prototype was made. A 
notice, in the manner authorized in paragraph (c)(3) of this section, 
must be submitted in connection with the sale, whether or not duty is 
payable. The notice should not be submitted prior to the submission of 
proof of actual use, should such proof of actual use be requested by the 
port director ( see paragraph (a)(2)(ii) of this section).
    (3) Form and content of notice; tender of duty. While no particular 
form is required for the notice of sale, a consumption entry (CBP Form 
7501), appropriately modified, or an electronic equivalent as authorized 
by CBP, may be used for this purpose. The notice may be a blanket notice 
covering all those sales described in paragraph (c)(2) of this section 
that occur over a quarterly (3-month) calendar period. Such notice must 
be filed within 10 business days of the end of the related quarterly 
period in which the sale(s) occurred. If an article sold is dutiable, 
the payment of any duty due must be forwarded together with the notice 
(see paragraph (c)(1) of this section). If the notice is filed 
electronically, payment of any duty owed will be handled through the 
Automated Clearinghouse ( see Sec. 24.25 of this chapter). The notice 
of sale must be executed by the importer, or other person having 
knowledge of the facts surrounding the sale, and must include the 
following:
    (i) The identity of the prototype; the consumption entry number 
under which it was imported; a copy of the declaration of actual use, if 
proof of actual use was requested under paragraph (a)(2)(ii) of this 
section; and a detailed description of the condition of the prototype 
following use for the intended permissible purposes, including any 
damage, degradation or deterioration to the article resulting from such 
use and/or otherwise resulting to the article from any other cause prior 
to its sale for scrap, waste, or recycling;
    (ii) The name and address of the party to whom the article was sold, 
and (if known) the use to which the party intends to put the article;
    (iii) The HTSUS subheading number for scrap, waste, or recycled 
material, as applicable, claimed in connection with the sale of the 
prototype, together with the corresponding rate of duty in effect at the 
time the prototype was originally imported for consumption;
    (iv) The value of the prototype article (if dutiable and the duty 
owed is based upon value) ( see paragraph (e)(2) of this section); and
    (v) The title of the party executing the declaration and the date of 
execution.
    (d) Prototypes not sold following use. As to those prototypes or 
parts of prototypes that, after having been used as prescribed under 
HTSUS subheading 9817.85.01, are disposed of otherwise than by sale ( 
see paragraph (c)(1) of this section), there is no requirement

[[Page 140]]

that the importer notify CBP of any such alternative disposition. Nor 
are there any dutiable consequences that ensue from any disposition of 
the merchandise after the merchandise's use under HTSUS subheading 
9817.85.01 other than sale to the extent authorized under paragraph 
(c)(1) of this section.
    (e) Recordkeeping; retention and production--(1) Recordkeeping. The 
importer must be prepared to submit to the CBP officer, if requested, 
any information, including any supporting documents, reports and 
records, as was necessary for the preparation of the declaration of use, 
if the declaration of use was requested under paragraph (a)(2)(ii) of 
this section, and the notice of sale, if applicable under paragraph 
(c)(3) of this section. The notices, together with any related 
supporting evidence, may be subject to such verification as the port 
director reasonably deems necessary. Supporting documentary evidence 
must be made available to the CBP officer, upon request, for a period of 
five years (see Sec. 163.4(a) of this chapter) from the date of filing 
in complete and proper form, the declaration of use, if requested, and, 
if applicable, the notice of sale. The supporting records must be made 
available to the CBP officer upon request in accordance with Sec. 163.6 
of this chapter.
    (i) Documents supporting the proof (declaration) of actual use must:
    (A) Establish that the identity and description of the prototype 
article is the same article that the consumption entry was made for 
under subheading 9817.85.01, HTSUS; and
    (B) Describe the circumstances of the use of the article; the 
operations, testing, review, manipulation, experimentation, and/or other 
exercises that are being and/or that have been conducted in connection 
with the prototype; and the location, such as the plant or production 
facility, where these activities occurred, sufficient to demonstrate 
that the purposes enumerated in HTSUS subheading 9817.85.01 are taking 
and/or have actually taken place.
    (ii) Documents supporting the notice of sale must establish that:
    (A) The identity of the prototype sold is the same article for which 
a consumption entry was made under subheading 9817.85.01 HTSUS when it 
was imported, and that the article was in the condition described in the 
notice of sale;
    (B) The article was sold to the party identified in the notice of 
sale;
    (C) The HTSUS subheading number for scrap, waste, or recycled 
material, as applicable, claimed in connection with the sale of the 
prototype is accurate;
    (D) The date that the prototype was originally imported for 
consumption, and the corresponding rate of duty in effect at the time 
for the applicable HTSUS subheading; and
    (E) The value of the prototype article (if dutiable and the duty 
owed is based upon value) ( see paragraph (e)(2) of this section) as 
claimed in the notice of sale is accurate.
    (2) Relevant value for used prototype or parts sold. For purposes of 
this section, with respect to any duty owed on prototypes or parts of 
prototypes that are sold as scrap, or waste, or for recycling, where the 
duty owed is based upon value, the relevant value is the market value of 
the prototypes or parts, based upon their character and condition 
following use for the purposes prescribed in HTSUS subheading 
9817.85.01. The relevant value should take into consideration any 
damage, degradation or deterioration to the prototypes or parts 
resulting from their use as a prototype and/or otherwise resulting to 
the articles from any other cause prior to their sale as scrap, waste, 
or for recycling. The market value will generally be measured by the 
selling price. Should a prototype or part of a prototype become a 
component of another product that is sold as scrap, waste, or recycled 
material, the relevant market value would be that portion of the selling 
price attributable to the component (prototype or part) as provided in 
this paragraph.
    (f) Articles admitted under TIB--(1) Duty-free entry available. 
Under the procedure presented in paragraph (f)(2) of this section, an 
entry of an article made under a temporary importation bond (TIB) solely 
for testing, experimental or review purposes under HTSUS subheading 
9813.00.30 may be converted into a duty-free entry under

[[Page 141]]

HTSUS subheading 9817.85.01, if the following conditions exist:
    (i) The article meets the definition for ``prototypes'' in paragraph 
(b) of this section (U.S. Note 6(a) to subchapter XVII, chapter 98, 
HTSUS); and
    (ii) The TIB entry for the article was in effect and had not been 
closed, and the TIB period for the article had not expired, as of 
November 9, 2000.
    (2) Procedure for converting TIB entry to duty-free entry--(i) 
Importer request. The importer must submit a written request, or an 
electronic equivalent as authorized by CBP, that a TIB entry made under 
HTSUS subheading 9813.00.30, which was in effect and had not been 
closed, and for which the TIB period had not expired, as of November 9, 
2000, be converted instead into a duty-free consumption entry under 
HTSUS subheading 9817.85.01.
    (ii) Action by CBP. CBP will convert the TIB entry under HTSUS 
subheading 9813.00.30 to a duty-free entry under HTSUS subheading 
9817.85.01, provided that the port director is satisfied that the 
conditions set forth in paragraphs (f)(1)(i) and (f)(1)(ii) of this 
section have been met. When the TIB entry is converted, the bond will be 
cancelled and the entry closed. Once the conversion is complete, the 
port director will provide a courtesy acknowledgment to this effect to 
the importer in writing or electronically.

[CBP Dec. 04-36, 69 FR 63449, Nov. 2, 2004]



Sec. Sec. 10.92-10.97  [Reserved]

                            Fluxing Material



Sec. 10.98  Copper-bearing fluxing material.

    (a) For the purpose of this section, ores usable as a flux or 
sulphur reagent, mentioned in the provision for such ores in subheading 
2603.00.00, Harmonized Tariff Schedule of the United States, shall 
include only ores which contain by weight not over 15 percent copper.
    (b) [Reserved]
    (c) There shall be filed in connection with the entry of such 
copper-bearing ores, either for consumption or warehouse, a declaration 
of the importer that the material is to be used for fluxing purposes 
only. In the case of a consumption entry, the estimated tax shall be 
deposited at the time of entry. Liquidation of entries shall be 
suspended pending proof of use for fluxing purposes as hereinafter 
provided.
    (d) Samples of the material shall be taken in accordance with the 
commercial method in effect at the plant if to be used in a bonded 
smelting warehouse, or in accordance with Sec. Sec. 151.52 through 
151.55 of this chapter if entered for consumption, and the copper 
content thereof shall be determined by the Government chemist in 
accordance with the assay.
    (e) The management of the smelting or converting plant shall file 
with the appropriate Customs officer at the port or ports where the 
entries are to be liquidated, a statement based on its records of 
operation for each quarterly period showing for each furnace or 
converter the total quantity of material charged during each month or 
part thereof of each quarter, the total quantity of material used for 
fluxing purposes, and the quantity of imported ores used for fluxing 
purposes for which free entry was claimed under the above-mentioned 
provision, together with the copper content of such imported ores 
computed in accordance with the Government assay. If the quantity of 
ores used for fluxing purposes in any furnace or converter during any 
month or part thereof of any quarter is in excess of 25 percent of the 
charge of such furnace or converter, the quarterly statement shall be 
accompanied by an explanation of the necessity for using such quantity 
for fluxing purposes.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 73-175, 38 FR 17445, 
July 2, 1973; T.D. 87-75, 52 FR 20067, May 29, 1987; T.D. 89-1, 53 FR 
51251, Dec. 21, 1988]

                              Ethyl Alcohol



Sec. 10.99  Importation of ethyl alcohol for nonbeverage purposes.

    (a) If claim is made by an importer other than the United States or 
a governmental agency thereof for the classification of ethyl alcohol of 
an alcoholic strength by volume of 80 percent volume or higher under 
subheading 2207.10.60, Harmonized Tariff Schedules of the United States, 
the importer or

[[Page 142]]

his agent shall file in connection with the entry a declaration that the 
alcohol is to be used for nonbeverage purposes only and whether the 
alcohol is to be used for fuel purposes. Customs shall release the 
alcohol for transfer, under internal revenue bond, to a distilled 
spirits plant upon deposit of estimated duty, if any, and without the 
payment of the internal revenue tax upon receipt of a transfer record 
for bulk spirits. In addition, a package gauge record must be submitted 
to Customs if the alcohol is in packages, as specified in subpart I of 
part 251, Bureau of Alcohol, Tobacco and Firearms (BATF) Regulations (27 
CFR part 251, subpart I). The transfer shall be accomplished in 
accordance with subpart L of Part 251, Bureau of Alcohol, Tobacco and 
Firearms Regulations (27 CFR part 251, subpart L).
    (b) An appropriate BATF permit shall be filed with Customs in 
connection with the withdrawal of ethyl alcohol from Customs custody by 
the United States or any governmental agency thereof for its own use for 
nonbeverage purposes. Such permit shall be filed before release under 
the entry without the deposit of estimated duties, if any, and internal 
revenue tax, or before release in accordance with the provisions of 
Sec. 141.102(d) of this chapter. (See subpart M of part 251, Bureau of 
Alcohol, Tobacco and Firearms Regulations (27 CFR part 251, subpart M)).
    (c) The procedures for the withdrawal free of tax on the entry of 
ethyl alcohol for nonbeverage purposes from the Virgin Islands are found 
in subpart O of part 250, Bureau of Alcohol, Tobacco and Firearms 
Regulations (27 CFR part 250, subpart O).

[T.D. 89-65, 54 FR 28413, July 6, 1989]

                  United States Government Importations



Sec. 10.100  Entry, examination, and tariff status.

    Except as otherwise provided for in Sec. Sec. 10.101, 10.102, 
10.104, 141.83(d)(8), 141.102(d), or elsewhere in this chapter, 
importations made by or for the account of any agency or office of the 
United States Government are subject to the usual Customs entry and 
examination requirements. In the absence of express exemptions from 
duty, such as are contained in subheadings 9808.00.10, 9808.00.20, 
9808.00.30, 9808.00.40, 9808.00.50, 9808.00.60, 9808.00.70, or other 
subheadings in the Harmonized Tariff Schedule of the United States (19 
U.S.C. 1202) providing for free entry, such importations are also 
subject to duty.

[T.D. 77-23, 42 FR 2310, Jan. 11, 1977, as amended by T.D. 89-1, 53 FR 
51251, Dec. 21, 1988; T.D. 97-82, 62 FR 51769, Oct. 3, 1997]



Sec. 10.101  Immediate delivery.

    (a) Shipments entitled to immediate delivery. Shipments 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, shall be regarded for purposes of these regulations 
as shipments the immediate delivery of which is necessary within the 
purview of section 448(b), Tariff Act of 1930, as amended (19 U.S.C. 
1448(b)).
    (b) Immediate delivery applications. The shipments described in the 
preceding paragraph may be released upon the filing of immediate 
delivery applications on Customs Form 3461 as set forth in subpart A of 
part 142 of this chapter. Such applications may be limited to particular 
shipments or may cover all shipments imported by the Government agency 
making the application. They may be approved for specific periods of 
time or for indefinite periods of time, provided in either case they are 
supported by carrier's certificates and stipulations as provided for in 
paragraph (c) of this section.
    (c) Carrier's certificates and stipulations. Before the release of a 
shipment under an immediate delivery permit, evidence of the right of 
the applicant to make entry for the articles shall be furnished the port 
director in accordance with the provisions of Sec. Sec. 141.11 and 
141.12 of this chapter.
    (d) Bond. No bond shall be required in support of an immediate 
delivery application provided for in this section if a stipulation in 
the form as set forth below is filed with the port director in 
connection with the application:

I, --------, -------- (Title), a duly authorized representative of the__
________________________________________________________________________

[[Page 143]]

(Name of United States 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 all other laws and regulations, relating to the release 
and entry of merchandise will be observed and complied with in all 
respects.
________________________________________________________________________
                                                             (Signature)

    (e) Timely entries required. If proper entries for consumption for 
importations released under these regulations are not filed within a 
reasonable time, appropriate steps shall be taken to insure the prompt 
filing of such entries.

[T.D. 77-23, 42 FR 2310, Jan. 11, 1977, as amended by T.D. 87-75, 52 FR 
20067, May 29, 1987]



Sec. 10.102  Duty-free entries.

    (a) Invoice or declaration. No invoice or other declaration of the 
shipper shall be required for shipments expressly exempt from duty as 
provided in subheadings 9808.00.10, 9808.00.20, 9808.00.30, 9808.00.40, 
9808.00.50, 9808.00.60, 9808.00.70, or other subheadings in the 
Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. 1202) 
providing for free entry. However, the importing Government agency or 
office shall present any invoice, memorandum invoice, or bill pertaining 
to the merchandise in its possession or available to it, or, if no such 
invoice or bill is available, a pro forma invoice prepared in accordance 
with Sec. 141.85 of this chapter, setting forth adequate information 
for examination and determination of the dutiable status of the 
merchandise. In addition, the port director shall only admit articles 
free of duty under subheadings 9808.00.30, 9808.00.40, 9808.00.50, HTSUS 
(19 U.S.C. 1202), upon the receipt of a certificate executed in the 
manner and form described in paragraph (b) of this section.
    (b) Certification. One of the following certificates executed by a 
duly authorized officer or official of the appropriate Government agency 
or office is required for free entry of articles under subheadings 
9808.00.30, 9808.00.40, or 9808.00.50, HTSUS (19 U.S.C. 1202). The 
certificates may be printed, stamped, or typewritten on the Customs 
entry or withdrawal form, Customs Form 7501, or on a separate paper 
attached to the entry or withdrawal form filed by the Government agency 
or office, provided the certification is clearly and unmistakably 
identified with the articles covered by the entry or withdrawal.
    (1) Articles for military departments, subheading 9808.00.30, HTSUS. 
I certify that the procurement of this material constituted an emergency 
purchase of war material abroad by the Department of the (name of 
military department), and it is accordingly requested that such material 
be admitted free of duty pursuant to subheading 9808.00.30, HTSUS.

________________________________________________________________________
 (Name)
________________________________________________________________________
(Title), who has been designated to execute free-entry certificates for 
the above-named department.
________________________________________________________________________
(Grade or Rank) (Organization)

    (2) Articles for the Defense Logistics Agency, subheading 
9808.00.40, HTSUS. Pursuant to subheading 9808.00.40, HTSUS, I hereby 
certify that the above-described materials are strategic and critical 
materials procured under the Strategic and Critical Materials Stock 
Piling Act (50 U.S.C. 98e).

________________________________________________________________________
 (Name)
________________________________________________________________________
(Title), Defense Logistics Agency, who has been duly authorized to 
execute the above certificate.

    (3) Articles for the Department of Energy, subheading 9808.00.50, 
HTSUS. I certify to the Secretary of the Treasury that the above-
described materials are source materials purchased abroad, the 
admittance of which is necessary in the interest of the common defense 
and security, in accordance with subheading 9808.00.50, HTSUS.

________________________________________________________________________
 (Name)
________________________________________________________________________
(Title), who has been authorized to execute free-entry certificates for 
the Department of Energy.

    (c) Release of shipments. Shipments for which free entry has been or 
will be claimed under subheading 9808.00.30, 9808.00.40, 9808.00.50, 
HTSUS (19 U.S.C. 1202), shall be released after only such examination as 
is necessary to identify them.

[[Page 144]]

    (d) Entry in Government name. All materials for which free entry is 
claimed under subheading 9808.00.30, 9808.00.40, 9808.00.50, HTSUS (19 
U.S.C. 1202), shall be entered, or withdrawn from warehouse, for 
consumption in the name of the Government department whose 
representative executes the certificate set forth in Sec. 10.102(b) 
unless exemption from this requirement is specifically authorized by the 
port director.

[T.D. 77-23, 42 FR 2311, Jan. 11, 1977, as amended by T.D. 85-123, 50 FR 
29953, July 23, 1985; T.D. 89-1, 53 FR 51251, Dec. 21, 1988; T.D. 93-44, 
58 FR 34523, June 28, 1993; T.D 95-81, 60 FR 52295, Oct. 6, 1995]



Sec. 10.103  American goods returned.

    (a) Certificate required. Articles entered, or withdrawn from 
warehouse, for consumption in the name of an agency or office of the 
United States Government (with the exception of military scrap belonging 
to the Department of Defense) may be admitted free of duty under 
subheading 9801.00.10, Harmonized Tariff Schedule of the United States 
(HTSUS) (19 U.S.C. 1202), upon the filing of a certificate on the 
letterhead of the agency or office in the following form in lieu of 
other entry documentation:

    I hereby certify:
    1. That the following articles imported in the --------------------
---- (Name of Carrier) at the port of ------------------------ (Port) on 
------------ (Date) consist of returned products which are the growth, 
produce, or manufacture of the United States, and have been returned to 
the United States without having been advanced in value or improved in 
condition by any process of manufacture or other means, and that no 
drawback has been or will be claimed on such articles, and that the 
articles currently belonging to and are for the further use of --------
---------------- (Agency or Office)

------------------------------------------------------------------------
                                                 General description of
 Number of containers    Bill of lading No.\1\          articles
------------------------------------------------------------------------
 
 
 
------------------------------------------------------------------------
 \1\ If shipment arrives in the United States on a commercial carrier.

    2. That the shipment does not contain military scrap.
    3. That the shipment is entitled to entry under subheading 
9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS) free 
of duty.
    4. That I am a military installation transportation officer having 
knowledge of the facts involved in this certificate.
 or
    I am an officer or official authorized by ---------------- (Agency 
or Office) (Whichever is applicable) to execute this certificate.
________________________________________________________________________
 (Name)
________________________________________________________________________

            (Rank and branch of service or Agency or Office)

    (b) Combined certificate when articles are intermingled. When 
articles claimed to be free under subheading 9801.00.10 and other 
articles claimed to be free under subheadings 9808.00.30, 9808.00.40, 
9808.00.50, HTSUS (19 U.S.C. 1202), are intermingled in a single 
shipment in a manner which precludes separation for the purpose of 
making claims for free entry under the separate categories, all the 
articles may be covered by a combined certificate which follows the 
requirements of Sec. 10.102(b) and paragraph (a) of this section.
    (c) Execution of certificate. The certificate required by paragraph 
(a) of this section may be executed by any military installation 
transportation officer having knowledge of the facts or by any other 
officer or official specifically designated or authorized to execute 
such certificates by the importing Government agency or office. If the 
merchandise arrived on a commercial carrier, the entry shall be 
supported by evidence of the right to make it.

[T.D. 77-23, 42 FR 2311, Jan. 11, 1977, as amended by T.D. 89-1, 53 FR 
51251, Dec. 21, 1988]



Sec. 10.104  Temporary importation entries for United States Government 
agencies.

    The entry of articles brought into the United States temporarily by 
an agency or office of the United States Government and claimed to be 
exempt from duty under Chapter 98, Subchapter XIII, Heading 9813, 
Harmonized Tariff Schedule of the United States (HTSUS), shall be made 
on Customs Form 7501. No bond shall be required if the agency or office 
files a stipulation in the form set forth in Sec. 141.102(d) of this 
chapter. In those cases in which

[[Page 145]]

the provisions of Chapter 98, Subchapter XIII, HTSUS (19 U.S.C. 1202), 
are not met, however, the port director will proceed as if a bond had 
been filed to cover the particular importation. Articles temporarily 
imported by a Government agency or office under this section are 
entitled to immediate delivery under the procedures set forth in Sec. 
10.101.

[T.D. 77-23, 42 FR 2311, Jan. 11, 1977, as amended by T.D. 89-1, 53 FR 
51251, Dec. 21, 1988]

                                  Wheat



Sec. 10.106  [Reserved]

                         Rescue and Relief Work



Sec. 10.107  Equipment and supplies; admission.

    (a) There shall be admitted without entry and without the payment of 
duty or any tax imposed upon or by reason of importation of any article 
described in section 322(b), Tariff Act of 1930, as amended, subject to 
compliance with the following conditions:
    (1) Before importation or as soon thereafter as possible, and in 
every case before the expiration of 10 days after importation, a report 
shall be made to the nearest Customs officer by the person in charge of 
sending the article from the foreign country, or by the person for whose 
account it was brought into the United States, stating the character, 
quantity, destination, and use to be made of the article.
    (2) If practicable, the article shall be exported under Customs 
supervision. In any other case a report shall be made by the person in 
charge of the exportation as soon as possible after exportation to the 
Customs officer to whom the arrival was reported, stating the character, 
quantity, and circumstances of the exportation.
    (b) In the case of each article admitted under paragraph (a) of this 
section, the port director shall satisfy himself as to whether the 
article was exported within a reasonable time, or that it has been 
properly expended or destroyed. If an article is so far destroyed, in 
connection with a use contemplated for it by section 322 (b) that it has 
only a salvage value, it shall not be required to be exported.
    (c) Any article admitted under paragraph (a) of this section which 
is used in the United States otherwise than for a purpose contemplated 
for it by section 322(b), or which is not exported within 90 days after 
its arrival in the United States, or within such longer time as may be 
specially authorized by the port director or Headquarters, U.S. Customs 
Service, shall be seized and forfeited to the United States.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 89-1, 53 FR 51252, Dec. 
21, 1988]

              Products Exported Under Lease and Reimported



Sec. 10.108  Entry of reimported articles exported under lease.

    Free entry shall be accorded under subheading 9801.00.20, Harmonized 
Tariff Schedule of the United States (HTSUS), whenever it is established 
to the satisfaction of the port director that the article for which free 
entry is claimed was duty paid on a previous importation or was 
previously entered free of duty pursuant to the Caribbean Basin Economic 
Recovery Act or Title V of the Trade Act of 1974, is being reimported 
without having been advanced in value or improved in condition by any 
process of manufacture or other means, was exported from the United 
States under a lease or similar use agreement, and is being reimported 
by or for the account of the person who imported it into, and exported 
it from, the United States.

[T.D. 94-40, 59 FR 17474, Apr. 13, 1994]

           Strategic Materials Obtained by Barter or Exchange



Sec. 10.110  [Reserved]

          Late Filing of Free Entry and Reduced Duty Documents



Sec. 10.112  Filing free entry documents or reduced duty documents after 
entry.

    Whenever a free entry or a reduced duty document, form, or statement 
required to be filed in connection with the entry is not filed at the 
time of the entry or within the period for which a bond was filed for 
its production, but failure to file it was not due to willful

[[Page 146]]

negligence or fraudulent intent, such document, form, or statement may 
be filed at any time prior to liquidation of the entry or, if the entry 
was liquidated, before the liquidation becomes final. See Sec. 
113.43(c) of this chapter for satisfaction of the bond and cancellation 
of the bond charge.

[T.D. 74-227, 39 FR 32015, Sept. 4, 1974]

  Instruments and Apparatus for Educational and Scientific Institutions



Sec. 10.114  General provisions.

    The consolidated regulations of the Commerce and Treasury 
Departments relating to the entry of instruments and apparatus for 
educational and scientific institutions are contained in 15 CFR part 
301.

[T.D. 82-224, 47 FR 53727, Nov. 29, 1982]



Sec. Sec. 10.115-10.119  [Reserved]

                      Visual or Auditory Materials



Sec. 10.121  Visual or auditory materials of an educational, scientific, 
or cultural character.

    (a) Where photographic film and other articles described in 
subheading 9817.00.40, Harmonized Tariff Schedule of the United States 
(HTSUS), are claimed to be free of duty under subheading 9817.00.40, 
HTSUS, there shall be filed in connection with the entry covering such 
articles a document issued by the U.S. Information Agency certifying 
that it has determined that the articles are visual or auditory 
materials of an educational, scientific, or cultural character within 
the meaning of the Agreement for Facilitating the International 
Circulation of Visual and Auditory Materials of an Educational, 
Scientific, and Cultural Character as required by U.S. Note 1, 
Subchapter XVII, chapter 98, HTSUS.
    (b) Articles entered under subheading 9817.00.40, Harmonized Tariff 
Schedule of the United States (HTSUS), shall be released from Customs 
custody prior to submission of the document required in paragraph (a) of 
this section only upon the deposit of estimated duties with the port 
director. Liquidation of an entry covering merchandise which has been 
released under this procedure shall be suspended for a period of 90 days 
from the date of entry or until the required document is submitted, 
whichever occurs first. In the event that the director of the port of 
entry does not receive the required document within the 90-day period, 
the merchandise shall be immediately classified and liquidated in the 
ordinary course, without regard to subheading 9817.00.40, HTSUS.

[T.D. 67-185, 32 FR 11641, Aug. 11, 1967, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988; T.D. 90-78, 55 FR 40166, Oct. 2, 1990]

                 Rate of Duty Dependent Upon Actual Use



Sec. 10.131  Circumstances in which applicable.

    The provisions of Sec. Sec. 10.131 through 10.139 are applicable in 
those circumstances in which the rate of duty applicable to merchandise 
is dependent upon actual use, unless there is a specific provision in 
this part which governs the treatment of the merchandise. However, 
specific marking or certification requirements, such as those for 
bolting cloths in section 10.58, may be applicable to merchandise 
subject to the provisions of sections 10.131-10.139.

[T.D. 71-139, 36 FR 10726, June 2, 1971, as amended by T.D. 86-118, 51 
FR 22515, June 20, 1986]



Sec. 10.132  [Reserved]



Sec. 10.133  Conditions required to be met.

    When the tariff classification of any article is controlled by its 
actual use in the United States, three conditions must be met in order 
to qualify for free entry or a lower rate of duty unless the language of 
the particular subheading of the Harmonized Tariff Schedule of the 
United States applicable to the merchandise specifies other conditions. 
The conditions are that:
    (a) Such use is intended at the time of importation.
    (b) The article is so used.
    (c) Proof of use is furnished within 3 years after the date the 
article is entered or withdrawn from warehouse for consumption.

[T.D. 71-139, 36 FR 10726, June 2, 1971, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988]

[[Page 147]]



Sec. 10.134  Declaration of intent.

    A showing of intent by the importer as to the actual use of imported 
merchandise shall be made by filing with the entry for consumption or 
for warehouse a declaration as to the intended use of the merchandise, 
or by entering the proper subheading of an actual use provision of the 
Harmonized Tariff Schedule of the United States (HTSUS) and the reduced 
or free rate of duty on the entry form. Entry made under an actual use 
provision of the HTSUS may be construed as a declaration that the 
merchandise is entered to be used for the purpose stated in the HTSUS, 
provided the port director is satisfied the merchandise will be so used. 
However, the port director shall require a written declaration to be 
filed if he is not satisfied that merchandise entered under an actual 
use provision will be used for the purposes stated in the HTSUS.

[T.D. 71-139, 36 FR 10726, June 2, 1971, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988]



Sec. 10.135  Deposit of duties.

    When the requirement of Sec. 10.134 has been met the merchandise 
may be entered or withdrawn from warehouse for consumption without 
deposit of duty when proof of use will result in free entry, or with 
deposit of duty at the lower rate when proof of use will result in a 
lower rate of duty.

[T.D. 71-139, 36 FR 10726, June 2, 1971, as amended by T.D. 84-213, 49 
FR 41166, Oct. 19, 1984]



Sec. 10.136  Suspension of liquidation.

    Liquidation of an entry covering merchandise for which a declaration 
of intent has been made pursuant to Sec. 10.134 and any required 
deposit of duties made, shall be suspended until proof of use is 
furnished or the 3-year period allowed for production thereof has 
expired.

[T.D. 71-139, 36 FR 10726, June 2, 1971]



Sec. 10.137  Records of use.

    (a) Maintenance by importer. The importer shall maintain accurate 
and detailed records showing the use or other disposition of the 
imported merchandise. The burden shall be on the importer to keep 
records so that the claim of actual use can be readily established.
    (b) Retention of records. The importer shall retain records of use 
or disposition for a period of 3 years from the date of liquidation of 
the entry.
    (c) Examination of records. The rec- ords required to be kept by 
paragraph (a) of this section shall be available at all times for 
examination and inspection by an authorized Customs officer.

[T.D. 71-139, 36 FR 10726, June 2, 1971]



Sec. 10.138  Proof of use.

    Within 3 years from the date of entry or withdrawal from warehouse 
for consumption, the importer shall submit in duplicate in support of 
his claim for free entry or for a reduced rate of duty a certificate 
executed by (1) the superintendent or manager of the manufacturing 
plant, or (2) the individual end-user or other person having knowledge 
of the actual use of the imported article. The certificate shall include 
a description of the processing in sufficient detail to show that the 
use contemplated by the law has actually taken place. A blanket 
certificate covering all purchases of a given type of merchandise from a 
particular importer during a given period, or all such purchases with 
specified exceptions, may be accepted for this purpose, provided the 
importer shall furnish a statement showing in detail, in such manner as 
to be readily identified with each entry, the merchandise which he sold 
to such manufacturer or end-user during such period.

[T.D. 71-139, 36 FR 10727, June 2, 1971]



Sec. 10.139  Liquidation.

    (a) In general. Upon satisfactory proof of timely use of the 
merchandise for the purpose specified by law, the entry shall be 
liquidated free of duty or at the lower rate of duty specified by law. 
When such proof is not filed within 3 years from the date of entry or 
withdrawal from warehouse for consumption, the entry shall be liquidated 
dutiable under the appropriate subheading of the Harmonized Tariff 
Schedule of the United States.
    (b) Exception for blackstrap molasses. An entry covering blackstrap 
molasses,

[[Page 148]]

as hereinafter defined, may be accepted and liquidated with duty at the 
lower rate after the filing of the declaration of intent required by 
Sec. 10.134 and the deposit of estimated duties required by Sec. 
10.135 without compliance with Sec. Sec. 10.136, 10.137, and 10.138. 
Blackstrap molasses is ``final'' molasses practically free from sugar 
crystals, containing not over 58 percent total sugars and having a ratio 
of

total sugarsx100/Brix


not in excess of 71. In the event of doubt, an ash determination may be 
made. An ash content of not less than 7 percent indicates a blackstrap 
molasses within the meaning of this paragraph.

[T.D. 71-139, 36 FR 10727, June 2, 1971, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988]

             Importations Not Over $200 and Bona Fide Gifts



Sec. 10.151  Importations not over $200.

    Subject to the conditions in Sec. 10.153 of this part, the port 
director shall pass free of duty and tax any shipment of merchandise, as 
defined in Sec. 101.1 of this chapter, imported by one person on one 
day having a fair retail value, as evidenced by an oral declaration or 
the bill of lading (or other document filed as the entry) or manifest 
listing each bill of lading, in the country of shipment not exceeding 
$200, unless he has reason to believe that the shipment is one of 
several lots covered by a single order or contract and that it was sent 
separately for the express purpose of securing free entry therefor or of 
avoiding compliance with any pertinent law or regulation. Merchandise 
subject to this exemption shall be entered under the informal entry 
procedures (see subpart C, part 143, and Sec. Sec. 128.24, 145.31, 
148.12, and 148.62, of this chapter).

[T.D. 94-51, 59 FR 30293, June 13, 1994, as amended by T.D. 95-31, 60 FR 
18990, Apr. 14, 1995; T.D. 95-31, 60 FR 37875, July 24, 1995; T.D. 97-
82, 62 FR 51769, Oct. 3, 1997]



Sec. 10.152  Bona-fide gifts.

    Subject to the conditions in Sec. 10.153 of this part, the port 
director shall pass free of duty and tax any article sent as a bona-fide 
gift from a person in a foreign country to a person in the United 
States, provided that the aggregate fair retail value in the country of 
shipment of such articles received by one person on one day does not 
exceed $100 or, in the case of articles sent from a person in the Virgin 
Islands, Guam, and American Samoa, $200. Articles subject to this 
exemption shall be entered under the informal entry procedures (see 
subpart C, part 143, and Sec. Sec. 145.32, 148.12, 148.51, and 148.64, 
of this chapter). An article is ``sent'' for purposes of this section if 
it is conveyed in any manner other than on the person or in the 
accompanied or unaccompanied baggage of the donor or donee.

[T.D. 94-51, 59 FR 30293, June 13, 1994]



Sec. 10.153  Conditions for exemption.

    Customs officers shall be further guided as follows in determining 
whether an article or parcel shall be exempted from duty and tax under 
Sec. 10.151 or Sec. 10.152:
    (a) A ``bona fide gift'' for purposes of Sec. 10.152 is an article 
formerly owned by a donor (may be a commercial firm) who gave it 
outright in its entirety to a donee without compensation or promise of 
compensation. It does not include articles acquired by purchase, barter, 
promissory exchange, or similar transaction, nor does it include 
articles said to be ``given'' in conjunction with a purchase, barter, 
promissory exchange, or similar transaction, such as a so-called bonus 
article.
    (b) A parcel addressed to a person in the United States from an 
individual in a foreign country which contains a gift should be clearly 
marked on the outside to indicate that it contains a gift. Such marking 
is not conclusive evidence of a gift nor is the absence of such marking 
conclusive evidence that an article is not a gift. Ordinarily an article 
not exceeding $100 in fair retail value in the country of shipment sent 
from a person in a foreign country to a person in the United States 
($200, in the case of an article sent from a person in the Virgin 
Islands, Guam, and American Samoa) will be recognizable as a gift from 
the nature of the article and obvious facts surrounding the shipment.

[[Page 149]]

    (c) A parcel addressed to a person in the United States from a 
business firm in a foreign country would ordinarily not contain a gift 
from a donor in the foreign country. When such a parcel in fact contains 
an article entitled to free entry under Sec. 10.152, the parcel should 
be clearly marked to indicate that it contains such a gift and a 
statement to this effect should be enclosed in the parcel.
    (d) Consolidated shipments addressed to one consignee shall be 
treated for purposes of Sec. Sec. 10.151 and 10.152 as one importation. 
The foregoing shall not apply to shipments of bona fide gifts 
consolidated abroad for shipment to the United States when:
    (1) The consolidation for shipment to the United States is in a 
cargo van or similar containerization which is consigned to a common 
carrier, freight forwarder, freight handler, or other public service 
agency for distribution of the gift packages;
    (2) The separate gifts not exceeding $100 in fair retail value in 
the country of shipment ($200, in the case of articles sent from persons 
in the Virgin Islands, Guam, and American Samoa) included in the 
consolidated shipment are before shipment individually wrapped and 
addressed to the donee in the United States;
    (3) Each gift package is marked on the outside to indicate that it 
contains a gift not exceeding $100 in fair retail value in the country 
of shipment ($200, in the case of packages sent from persons in the 
Virgin Islands, Guam, and American Samoa); and
    (4) Each gift package is separately listed in the name of the 
addressee-donee on a packing list, manifest, bill of lading, or other 
shipping document.
    (e) No alcoholic beverage, perfume containing alcohol (except where 
the aggregate fair retail value in the country of shipment of all 
merchandise contained in the shipment does not exceed $5), cigars, or 
cigarettes shall be exempted from the payment of duty and tax under 
Sec. 10.151 or Sec. 10.152.
    (f) The exemptions provided for in Sec. 10.151 or Sec. 10.152 are 
not to be allowed in respect of any shipment containing one or more 
gifts having an aggregate fair retail value in the country of shipment 
in excess of $100 ($200, in the case of articles sent from persons in 
the Virgin Islands, Guam, and American Samoa), except as indicated in 
paragraph (d) of this section. For example, an article ordinarily 
subject to an ad valorem rate of duty but sent as a gift, if the fair 
retail value exceeds the $100 (or $200) exemption, would be subject to a 
duty based upon its value under the provisions of section 402 or 402(a), 
Tariff Act of 1930, as amended (19 U.S.C. 1401a or 1402), even though 
the dutiable value is less than the $100 (or $200) exemption.
    (g) The exemption referred to in Sec. 10.151 is not to be allowed 
in the case of any merchandise of a class or kind provided for in any 
absolute or tariff-rate quota, whether the quota is open or closed. In 
the case of merchandise of a class or kind provided for in a tariff-rate 
quota, the merchandise is subject to the rate of duty in effect on the 
date of entry.

[T.D. 73-175, 38 FR 17445, July 2, 1973, as amended by T.D. 75-185, 40 
FR 31753, July 29, 1975; T.D. 78-394, 43 FR 49787, Oct. 25, 1978; T.D. 
85-123, 50 FR 29953, July 23, 1985; T.D. 94-51, 59 FR 30293, June 13, 
1994]

                    Generalized System of Preferences



Sec. 10.171  General.

    (a) Statutory authority. Title V of the Trade Act of 1974 as amended 
(19 U.S.C. 2461-2467) authorizes the President to establish a 
Generalized System of Preferences (GSP) to provide duty-free treatment 
for eligible articles imported directly from designated beneficiary 
developing countries. Beneficiary developing countries and articles 
eligible for duty-free treatment are designated by the President by 
Executive order in accordance with sections 502(a)(1) and 503(a) of the 
Trade Act of 1974 as amended (19 U.S.C. 2462(a)(1), 2463(a)).
    (b) Country defined. For purposes of Sec. Sec. 10.171 through 
10.178, except as otherwise provided in Sec. 10.176(a), the term 
``country'' means any foreign country, any overseas dependent territory 
or possession of a foreign country, or the Trust Territory of the 
Pacific Islands. In the case of an association of countries which is a 
free trade area or customs union or which is contributing to

[[Page 150]]

comprehensive regional economic integration among its members through 
appropriate means, including but not limited to, the reduction of 
duties, the President may by Executive order provide that all members of 
such association other than members which are barred from designation 
under section 502(b) of the Trade Act of 1974 (19 U.S.C. 2462(b)) shall 
be treated as one country for purposes of Sec. Sec. 10.171 through 
10.178.

[T.D. 76-2, 40 FR 60047, Dec. 31, 1975, as amended by T.D. 80-271, 45 FR 
75641, Nov. 17, 1980; T.D. 00-67, 65 FR 59675, Oct. 5, 2000]



Sec. 10.172  Claim for exemption from duty under the Generalized System 
of Preferences.

    A claim for an exemption from duty on the ground that the 
Generalized System of Preferences applies shall be allowed by the port 
director only if he is satisfied that the requirements set forth in this 
section and Sec. Sec. 10.173 through 10.178 have been met. If duty-free 
treatment is claimed at the time of entry, a written claim shall be 
filed on the entry document by placing the symbol ``A'' as a prefix to 
the subheading of the Harmonized Tariff Schedule of the United States 
for each article for which such treatment is claimed.

[T.D. 76-2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 77-36, 42 FR 
5041, Jan. 27, 1977; T.D. 89-1, 53 FR 51252, Dec. 21, 1988; T.D. 94-47, 
59 FR 25569, May 17, 1994; T.D. 99-27, 64 FR 13675, Mar. 22, 1999]



Sec. 10.173  Evidence of country of origin.

    (a) Shipments covered by a formal entry--(1) Merchandise not wholly 
the growth, product, or manufacture of a beneficiary developing country. 
(i) Declaration. In a case involving merchandise covered by a formal 
entry which is not wholly the growth, product, or manufacture of a 
single beneficiary developing country, the exporter of the merchandise 
or other appropriate party having knowledge of the relevant facts shall 
be prepared to submit directly to the port director, upon request, a 
declaration setting forth all pertinent detailed information concerning 
the production or manufacture of the merchandise. When requested by the 
port director, the declaration shall be prepared in substantially the 
following form:

                             GSP DECLARATION

 I,_____________________________________________________________________
(name), hereby declare that the articles described below were produced 
or manufactured in ---------------- (country) by means of processing 
operations performed in that country as set forth below and were also 
subjected to processing operations in the other country or countries 
which are members of the same association of countries as set forth 
below and incorporate materials produced in the country named above or 
in any other country or countries which are members of the same 
association of countries as set forth below:

----------------------------------------------------------------------------------------------------------------
                                                 Processing operations performed      Materials produced in a
                                                           on articles            beneficiary developing country
                                                ---------------------------------     or members of the same
                                                                                            association
                                 Description of                                  -------------------------------
  Number and date of invoices     articles and    Description of                  Description of
                                    quantity        processing     Direct costs      material,
                                                  operations and   of processing    production     Cost or value
                                                    country of      operations     process, and     of material
                                                    processing                      country of
                                                                                    production
----------------------------------------------------------------------------------------------------------------
                                ...............  ...............  ..............  ..............  ..............
                                ...............  ...............  ..............  ..............  ..............
                                ...............  ...............  ..............  ..............  ..............
                                ...............  ...............  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------

Date____________________________________________________________________
Address_________________________________________________________________
Signature_______________________________________________________________
Title___________________________________________________________________

    (ii) Retention of records and submission of declaration. The 
information necessary for preparation of the declaration shall be 
retained in the files of the party responsible for its preparation and 
submission for a period of 5 years. In the event that the port director 
requests submission of the declaration during the 5-year period, it 
shall be

[[Page 151]]

submitted by the appropriate party directly to the port director within 
60 days of the date of the request or such additional period as the port 
director may allow for good cause shown. Failure to submit the 
declaration in a timely fashion will result in a denial of duty-free 
treatment.
    (2) Merchandise wholly the growth, product, or manufacture of a 
beneficiary developing country. In a case involving merchandise covered 
by a formal entry which is wholly the growth, product, or manufacture of 
a single beneficiary developing country, a statement to that effect 
shall be included on the commercial invoice provided to Customs.
    (b) Shipments covered by an informal entry. Although the filing of 
the declaration provided for in paragraph (a)(1)(i) of this section will 
not be required for a shipment covered by an informal entry, the port 
director may require such other evidence of country of origin as deemed 
necessary.
    (c) Verification of documentation. Any evidence of country of origin 
submitted under this section shall be subject to such verification as 
the port director deems necessary. In the event that the port director 
is prevented from obtaining the necessary verification, the port 
director may treat the entry as dutiable.

[T.D. 94-47, 59 FR 25569, May 17, 1994]



Sec. 10.174  Evidence of direct shipment.

    (a) Documents constituting evidence of direct shipment. The port 
director may require that appropriate shipping papers, invoices, or 
other documents be submitted within 60 days of the date of entry as 
evidence that the articles were ``imported directly'', as that term is 
defined in Sec. 10.175. Any evidence of direct shipment required by the 
port director shall be subject to such verification as he deems 
necessary.
    (b) Waiver of evidence of direct shipment. The port director may 
waive the submission of evidence of direct shipment when he is otherwise 
satisfied, taking into consideration the kind and value of the 
merchandise, that the merchandise clearly qualifies for treatment under 
the Generalized System of Preferences.

[T.D. 76-2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 77-27, 42 FR 
3162, Jan. 17, 1977]



Sec. 10.175  Imported directly defined.

    Eligible articles shall be imported directly from a beneficiary 
developing country to qualify for treatment under the Generalized System 
of Preferences. For purposes of Sec. Sec. 10.171 through 10.178 the 
words ``imported directly'' mean:
    (a) Direct shipment from the beneficiary country to the United 
States without passing through the territory of any other country; or
    (b) If the shipment is from a beneficiary developing country to the 
U.S. through the territory of any other country, the merchandise in the 
shipment does not enter into the commerce of any other country while en 
route to the U.S., and the invoice, bills of lading, and other shipping 
documents show the U.S. as the final destination; or
    (c) If shipped from the beneficiary developing country to the United 
States through a free trade zone in a beneficiary developing country, 
the merchandise shall not enter into the commerce of the country 
maintaining the free trade zone, and
    (1) The eligible articles must not undergo any operation other than:
    (i) Sorting, grading, or testing,
    (ii) Packing, unpacking, changes of packing, decanting or repacking 
into other containers,
    (iii) Affixing marks, labels, or other like distinguishing signs on 
articles or their packing, if incidental to operations allowed under 
this section, or
    (iv) Operations necessary to ensure the preservation of merchandise 
in its condition as introduced into the free trade zone.
    (2) Merchandise may be purchased and resold, other than at retail, 
for export within the free trade zone.
    (3) For the purposes of this section, a free trade zone is a 
predetermined area or region declared and secured by or under 
governmental authority, where certain operations may be performed with 
respect to articles, without such

[[Page 152]]

articles having entered into the commerce of the country maintaining the 
free trade zone; or
    (d) If the shipment is from any beneficiary developing country to 
the U.S through the territory of any other country and the invoices and 
other documents do not show the U.S as the final destination, the 
articles in the shipment upon arrival in the U.S. are imported directly 
only if they:
    (1) Remained under the control of the customs authority of the 
intermediate country;
    (2) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
latter's sales agent; and
    (3) Were not subjected to operations other than loading and 
unloading, and other activities necessary to preserve the articles in 
good condition; or
    (e)(1) Shipment to the U.S. from a beneficiary developing country 
which is a member of an association of countries treated as one country 
under section 507(2), Trade Act of 1974, as amended (19 U.S.C. 2467(2)), 
through the territory of a former beneficiary developing country whose 
designation as a member of the same association for GSP purposes was 
terminated by the President pursuant to section 502(d), Trade Act of 
1974, as amended (19 U.S.C. 2462(d)), provided the articles in the 
shipment did not enter into the commerce of the former beneficiary 
developing country except for purposes of performing one or more of the 
operations specified in paragraph (c)(1) of this section and except for 
purposes of purchase or resale, other than at retail, for export.
    (2) The designation of the following countries as members of an 
association of countries for GSP purposes has been terminated by the 
President pursuant to section 502(d) of the Trade Act of 1974 (19 U.S.C. 
2462(d)):

The Bahamas
Brunei Darussalam
Malaysia
Singapore

[T.D. 76-2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 83-144, 48 FR 
29684, June 28, 1983; T.D. 84-237, 49 FR 47992, Dec. 7, 1984; T.D. 86-
107, 51 FR 20816, June 9, 1986; T.D. 92-6, 57 FR 2018, Jan. 17, 1992; 
T.D. 94-47, 59 FR 25569, May 17, 1994; T.D. 95-30, 60 FR 18543, Apr. 12, 
1995; T.D. 00-67, 65 FR 59675, Oct. 5, 2000]



Sec. 10.176  Country of origin criteria.

    (a) Merchandise produced in a beneficiary developing country or any 
two or more countries which are members of the same association of 
countries--(1) General. Except as otherwise provided in this section, 
any article which either is wholly the growth, product, or manufacture 
of, or is a new or different article of commerce that has been grown, 
produced, or manufactured in, a beneficiary developing country may 
qualify for duty-free entry under the Generalized System of Preferences 
(GSP). No article will be considered to have been grown, produced, or 
manufactured in a beneficiary developing country by virtue of having 
merely undergone simple (as opposed to complex or meaningful) combining 
or packaging operations or mere dilution with water or mere dilution 
with another substance that does not materially alter the 
characteristics of the article. Duty-free entry under the GSP may be 
accorded to an article only if the sum of the cost or value of the 
materials produced in the beneficiary developing country or any two or 
more countries that are members of the same association of countries and 
are treated as one country under section 507(2) of the Trade Act of 
1974, as amended (19 U.S.C. 2467(2)), plus the direct costs of 
processing operations performed in the beneficiary developing country or 
member countries, is not less than 35 percent of the appraised value of 
the article at the time it is entered.
    (2) Combining, packaging, and diluting operations. No article which 
has undergone only a simple combining or packaging operation or a mere 
dilution in a beneficiary developing country within the meaning of 
paragraph (a)(1) of this section will be entitled to duty-free treatment 
even though the processing operation causes the article to meet the 
value requirement set forth in that

[[Page 153]]

paragraph. For purposes of this section:
    (i) Simple combining or packaging operations and mere dilution 
include, but are not limited to, the following:
    (A) The addition of batteries to devices;
    (B) Fitting together a small number of components by bolting, 
glueing, soldering, etc.;
    (C) Blending foreign and beneficiary developing country tobacco;
    (D) The addition of substances such as anticaking agents, 
preservatives, wetting agents, etc.;
    (E) Repacking or packaging components together;
    (F) Reconstituting orange juice by adding water to orange juice 
concentrate; and
    (G) Diluting chemicals with inert ingredients to bring them to 
standard degrees of strength;
    (ii) Simple combining or packaging operations and mere dilution will 
not be taken to include processes such as the following:
    (A) The assembly of a large number of discrete components onto a 
printed circuit board;
    (B) The mixing together of two bulk medicinal substances followed by 
the packaging of the mixed product into individual doses for retail 
sale;
    (C) The addition of water or another substance to a chemical 
compound under pressure which results in a reaction creating a new 
chemical compound; and
    (D) A simple combining or packaging operation or mere dilution 
coupled with any other type of processing such as testing or fabrication 
(for example, a simple assembly of a small number of components, one of 
which was fabricated in the beneficiary developing country where the 
assembly took place); and
    (iii) The fact that an article has undergone more than a simple 
combining or packaging operation or mere dilution is not necessarily 
dispositive of the question of whether that processing constitutes a 
substantial transformation for purposes of determining the country of 
origin of the article.
    (b) [Reserved]
    (c) Merchandise grown, produced, or manufactured in a beneficiary 
developing country. Merchandise which is wholly the growth, product, or 
manufacture of a beneficiary developing country, or an association of 
countries treated as one country under section 507(2) of the Trade Act 
of 1974 (19 U.S.C. 2467(2)) and Sec. 10.171(b), and manufactured 
products consisting of materials produced only in such country or 
countries, shall normally be presumed to meet the requirements set forth 
in this section.

[T.D. 76-2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 80-271, 45 FR 
75641, Nov. 17, 1980; T.D. 00-67, 65 FR 59675, Oct. 5, 2000]



Sec. 10.177  Cost or value of materials produced in the beneficiary 
developing country.

    (a) ``Produced in the beneficiary developing country'' defined. For 
purposes of Sec. Sec. 10.171 through 10.178, the words ``produced in 
the beneficiary developing country'' refer to the constituent materials 
of which the eligible article is composed which are either:
    (1) Wholly the growth, product, or manufacture of the beneficiary 
developing country; or
    (2) Substantially transformed in the beneficiary developing country 
into a new and different article of commerce.
    (b) Questionable origin. When the origin of an article either is not 
ascertainable or not satisfactorily demonstrated to the port director, 
the article shall not be considered to have been produced in the 
beneficiary developing country.
    (c) Determination of cost or value of materials produced in the 
beneficiary developing country. (1) The cost or value of materials 
produced in the beneficiary developing country includes:
    (i) The manufacturer's actual cost for the materials;
    (ii) When not included in the manufacturer's actual cost for the 
materials, the freight, insurance, packing, and all other costs incurred 
in transporting the materials to the manufacturer's plant;
    (iii) The actual cost of waste or spoilage (material list), less the 
value of recoverable scrap; and
    (iv) Taxes and/or duties imposed on the materials by the beneficiary 
developing country, or an association of

[[Page 154]]

countries treated as one country, provided they are not remitted upon 
exportation.
    (2) Where the material is provided to the manufacturer without 
charge, or at less than fair market value, its cost or value shall be 
determined by computing the sum of:
    (i) All expenses incurred in the growth, production, manufacture or 
assembly of the material, including general expenses;
    (ii) An amount for profit; and
    (iii) Freight, insurance, packing, and all other costs incurred in 
transporting the materials to the manufacturer's plant.

If the pertinent information needed to compute the cost or value of the 
materials is not available, the appraising officer may ascertain or 
estimate the value thereof using all reasonable ways and means at his 
disposal.

[T.D. 76-2, 40 FR 60049, Dec. 31, 1975, as amended by T.D. 86-118, 51 FR 
22515, June 20, 1986]



Sec. 10.178  Direct costs of processing operations performed in the 
beneficiary developing country.

    (a) Items included in the direct costs of processing operations. As 
used in Sec. 10.176, the words ``direct costs of processing 
operations'' means those costs either directly incurred in, or which can 
be reasonably allocated to, the growth, production, manufacture, or 
assembly of the specific merchandise under consideration. Such costs 
include, but are not limited to:
    (1) All actual labor costs involved in the growth, production, 
manufacture, or assembly of the specific merchandise, including fringe 
benefits, on-the-job training, and the cost of engineering, supervisory, 
quality control, and similar personnel;
    (2) Dies, molds, tooling, and depreciation on machinery and 
equipment which are allocable to the specific merchandise;
    (3) Research, development, design, engineering, and blueprint costs 
insofar as they are allocable to the specific merchandise; and
    (4) Costs of inspecting and testing the specific merchandise.
    (b) Items not included in the direct costs of processing operations. 
Those items which are not included within the meaning of the words 
``direct costs of processing operations'' are those which are not 
directly attributable to the merchandise under consideration or are not 
``costs'' of manufacturing the product. These include, but are not 
limited to:
    (1) Profit; and
    (2) General expenses of doing business which are either not 
allocable to the specific merchandise or are not related to the growth, 
production, manufacture, or assembly of the merchandise, such as 
administrative salaries, casualty and liability insurance, advertising, 
and salesmen's salaries, commissions, or expenses.

[T.D. 76-2, 40 FR 60049, Dec. 31, 1975]



Sec. 10.178a  Special duty-free treatment for sub-Saharan African 
countries.

    (a) General. Section 506A of the Trade Act of 1974 (19 U.S.C. 2466a) 
authorizes the President to provide duty-free treatment for certain 
articles otherwise excluded from duty-free treatment under the 
Generalized System of Preferences (GSP) pursuant to section 503(b)(1)(B) 
through (G) of the Trade Act of 1974 (19 U.S.C. 2463(b)(1)(B) through 
(G)) and authorizes the President to designate a country listed in 
section 107 of the African Growth and Opportunity Act (19 U.S.C. 3706) 
as an eligible beneficiary sub-Saharan African country for purposes of 
that duty-free treatment.
    (b) Eligible articles. The duty-free treatment referred to in 
paragraph (a) of this section will apply to any article within any of 
the following classes of articles, provided that the article in question 
has been designated by the President for that purpose and is the growth, 
product, or manufacture of an eligible beneficiary sub-Saharan African 
country and meets the requirements specified or referred to in paragraph 
(d) of this section:
    (1) Watches, except those watches entered after June 30, 1989, that 
the President specifically determines, after public notice and comment, 
will not cause material injury to watch or watch band, strap, or 
bracelet manufacturing and assembly operations in the United States or 
the United States insular possessions;

[[Page 155]]

    (2) Certain electronic articles;
    (3) Certain steel articles;
    (4) Footwear, handbags, luggage, flat goods, work gloves, and 
leather wearing apparel which were not eligible articles for purposes of 
the GSP on January 1, 1995, as the GSP was in effect on that date;
    (5) Certain semimanufactured and manufactured glass products; and
    (6) Any other articles which the President determines to be import-
sensitive in the context of the GSP.
    (c) Claim for duty-free treatment. A claim for the duty-free 
treatment referred to in paragraph (a) of this section must be made by 
placing on the entry document the symbol ``D'' as a prefix to the 
subheading of the Harmonized Tariff Schedule of the United States for 
each article for which duty-free treatment is claimed;
    (d) Origin and related rules. The provisions of Sec. Sec. 10.171, 
10.173, and 10.175 through 10.178 will apply for purposes of duty-free 
treatment under this section. However, application of those provisions 
in the context of this section will be subject to the following rules:
    (1) The term ``beneficiary developing country,'' wherever it 
appears, means ``beneficiary sub-Saharan African country;'
    (2) In the GSP declaration set forth in Sec. 10.173(a)(1)(i), the 
column heading ``Materials produced in a beneficiary developing country 
or members of the same association'' should read ``Material produced in 
a beneficiary sub-Saharan African country or in the U.S.;''
    (3) The provisions of Sec. 10.175(c) will not apply; and
    (4) For purposes of determining compliance with the 35 percent value 
content requirement set forth in Sec. 10.176(a):
    (i) An amount not to exceed 15 percent of the appraised value of the 
article at the time it is entered may be attributed to the cost or value 
of materials produced in the customs territory of the United States, and 
the provisions of Sec. 10.177 will apply for purposes of identifying 
materials produced in the customs territory of the United States and the 
cost or value of those materials; and
    (ii) The cost or value of materials included in the article that are 
produced in more than one beneficiary sub-Saharan African country may be 
applied without regard to whether those countries are members of the 
same association of countries.
    (e) Importer requirements. In order to make a claim for duty-free 
treatment under this section, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the article qualifies for duty-free treatment;
    (2) Must have records that demonstrate that the importer is claiming 
that the article qualifies for duty-free treatment because it is the 
growth of a beneficiary sub-Saharan African country or because it is the 
product of a beneficiary sub-Saharan African country or because it is 
the manufacture of a beneficiary sub-Saharan African country. If the 
importer is claiming that the article is the growth of a beneficiary 
sub-Saharan African country, the importer must have records that 
indicate that the product was grown in that country, such as a record of 
receipt from a farmer whose crops are grown in that country. If the 
importer is claiming that the article is the product of, or the 
manufacture of, a beneficiary sub-Saharan African country, the importer 
must have records that indicate that the manufacturing or processing 
operations reflected in or applied to the article meet the country of 
origin rules set forth in Sec. 10.176(a) and paragraph (d) of this 
section. A properly completed GSP declaration in the form set forth in 
Sec. 10.173(a)(1) is one example of a record that would serve this 
purpose;
    (3) Must establish and implement internal controls which provide for 
the periodic review of the accuracy of the declarations or other records 
referred to in paragraph (e)(2) of this section;
    (4) Must have shipping papers that show how the article moved from 
the beneficiary sub-Saharan African country to the United States. If the 
imported article was shipped through a country other than a beneficiary 
sub-Saharan African country and the invoices and other documents from 
the beneficiary sub-Saharan African country do not show the United 
States as the final destination, the importer also

[[Page 156]]

must have documentation that demonstrates that the conditions set forth 
in Sec. 10.175(d)(1) through (3) were met;
    (5) Must have records that demonstrate the cost or value of the 
materials produced in the United States and the cost or value of the 
materials produced in a beneficiary sub-Saharan African country or 
countries and the direct costs of processing operations incurred in the 
beneficiary sub-Saharan African country that were relied upon by the 
importer to determine that the article met the 35 percent value content 
requirement set forth in Sec. 10.176(a) and paragraph (c) of this 
section. A properly completed GSP declaration in the form set forth in 
Sec. 10.173(a)(1) is one example of a record that would serve this 
purpose; and
    (6) Must be prepared to produce the records referred to in 
paragraphs (e)(1), (e)(2), (e)(4), and (e)(5) of this section within 30 
days of a request from Customs and must be prepared to explain how those 
records and the internal controls referred to in paragraph (e)(3) of 
this section justify the importer's claim for duty-free treatment.

[T.D. 00-67, 65 FR 59675, Oct. 5, 2000]

                        Canadian Crude Petroleum



Sec. 10.179  Canadian crude petroleum subject to a commercial exchange 
agreement between United States and Canadian refiners.

    (a) Crude petroleum (as defined in Chapter 27, Additional U.S. Note 
1, Harmonized Tariff Schedule of the United States (19 U.S.C. 1202)) 
produced in Canada may be admitted free of duty if the entry is 
accompanied by a certificate from the importer establishing that:
    (1) The petroleum is imported pursuant to a commercial exchange 
agreement between United States and Canadian refiners which has been 
approved by the Secretary of Energy;
    (2) An equivalent amount of domestic or duty-paid foreign crude 
petroleum on which the importer has executed a written waiver of 
drawback, has been exported to Canada pursuant to the export license and 
previously has not been used to effect the duty-free entry of like 
Canadian products; and,
    (3) An export license has been issued by the Secretary of Commerce 
for the petroleum which has been exported to Canada.
    (b) The provisions of this section may be applied to:
    (1) Liquidated or reliquidated entries if the required certification 
is filed with the director of the port where the original entry was made 
on or before the 180th day after the date of entry; and
    (2) Articles entered, or withdrawn from warehouse, for consumption, 
pursuant to a commercial exchange agreement.
    (c) Verification of the quantities of crude petroleum exported to or 
imported from Canada under such a commercial exchange agreement shall be 
made in accordance with import verification provided in Part 151, 
Subpart C, Customs Regulations (19 CFR part 151, subpart C).

[T.D. 81-292, 46 FR 58069, Nov. 30, 1981, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988; T.D. 91-82, 56 FR 49845, Oct. 2, 1991]

                 Certain Fresh, Chilled, or Frozen Beef



Sec. 10.180  Certification.

    (a) The foreign official's meat-inspection certificate required by 
U.S. Department of Agriculture regulations (9 CFR 327.4) shall be 
modified to include the certification below when fresh, chilled, or 
frozen beef is to be entered under the provisions of subheadings 
0201.20.10, 0201.30.02, 0202.20.02, 0202.20.10, Harmonized Tariff 
Schedule of the United States (HTSUS). The certification shall be made, 
prior to exportation of the beef, by an official of the government of 
the exporting country and filed with Customs with the entry summary or 
with the entry when the entry summary is filed at the time of entry. The 
requirements of this section shall be in addition to those requirements 
contained in 9 CFR 327.4. Appropriate officials of the exporting country 
should consult with the U.S. Department of Agriculture as to the beef 
grades or standards within their country that satisfy the certification 
requirement. Exporters or importers of beef to be entered under the 
provisions of subheadings 0201.20.10, 0201.30.02,

[[Page 157]]

0202.20.02, 0202.20.10, HTSUS, should consult with the U.S. Department 
of Agriculture prior to exportation in order to insure that the beef 
will satisfy the certification requirements. This certification is 
relevant only to U.S. Customs tariff classification and is not 
applicable to marketing of beef under U.S. Department of Agriculture 
grading standards, a matter within U.S. Department of Agriculture's 
jurisdiction.

                              Certification

    I hereby certify to the best of my knowledge and belief that the 
herein described fresh, chilled, or frozen beef, meets the 
specifications prescribed in regulations issued by the U.S. Department 
of Agriculture (7 CFR 2853.106 (a) and (b)).
    (b) Appropriate officials of the following countries have agreed 
with the U.S. Department of Agriculture as to the grades or standards 
for fresh, chilled, or frozen beef within their respective countries 
which will satisfy the certification requirements of paragraph (a) of 
this section: Canada.

[T.D. 82-8, 47 FR 945, Jan. 8, 1982, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988; T.D. 97-82, 62 FR 51769, Oct. 3, 1997]

        Watches and Watch Movements From U.S. Insular Possessions



Sec. Sec. 10.181-10.182  [Reserved]

                             Civil Aircraft



Sec. 10.183  Duty-free entry of civil aircraft, aircraft engines, ground 
flight simulators, parts, components, and subassemblies.

    (a) Applicability. Except as provided in paragraph (b) of this 
section, this section applies to aircraft, aircraft engines, and ground 
flight simulators, including their parts, components, and subassemblies, 
that qualify as civil aircraft under General Note 6(b) ofthe Harmonized 
Tariff Schedule of the United States (HTSUS) by meeting the following 
requirements:
    (1) The aircraft, aircraft engines, ground flight simulators, or 
their parts, components, and subassemblies, are used as original or 
replacement equipment in the design, development, testing, evaluation, 
manufacture, repair, maintenance, rebuilding, modification, or 
conversion of aircraft; and
    (2) They are either:
    (i) Manufactured or operated pursuant to a certificate issued by the 
Administrator of the Federal Aviation Administration (FAA) under 49 
U.S.C. 44704 or pursuant to the approval of the airworthiness authority 
in the country of exportation, if that approval is recognized by the FAA 
as an acceptable substitute for the FAA certificate;
    (ii) Covered by an application for such certificate, submitted to 
and accepted by the FAA, filed by an existing type and production 
certificate holder pursuant to 49 U.S.C. 44702 and implementing 
regulations (Federal Aviation Administration Regulations, title 14, Code 
of Federal Regulations); or
    (iii) Covered by an application for such approval or certificate 
which will be submitted in the future by an existing type and production 
certificate holder, pending the completion of design or other technical 
requirements stipulated by the FAA (applicable only to the quantities of 
parts, components, and subassemblies as are required to meet the 
stipulation).
    (b) Department of Defense or U.S. Coast Guard use. If purchased for 
use by the Department of Defense or the United States Coast Guard, 
aircraft, aircraft engines, and ground flight simulators, including 
their parts, components, and subassemblies, are subject to this section 
only if they are used as original or replacement equipment in the 
design, development, testing, evaluation, manufacture, repair, 
maintenance, rebuilding, modification, or conversion of aircraft and 
meet the requirements of either paragraph (a)(2)(i) or (a)(2)(ii) of 
this section.
    (c) Claim for admission free of duty. Merchandise qualifying under 
paragraph (a) or paragraph (b) of this section is entitled to duty-free 
admission in accordance with General Note 6, HTSUS, upon meeting the 
requirements of this section. An importer will make a claim for duty-
free admission under this section and General Note 6, HTSUS, by properly 
entering qualifying merchandise under a provision for which the rate of 
duty ``Free (C)'' appears in the ``Special'' subcolumn of the HTSUS and 
by placing the special indicator ``C'' on the entry summary. The fact 
that qualifying merchandise

[[Page 158]]

has previously been exported with benefit of drawback does not preclude 
free entry under this section.
    (d) Importer certification. In making a claim for duty-free 
admission as provided for under paragraph (c) of this section, the 
importer is deemed to certify, in accordance with General Note 6(a)(ii), 
HTSUS, that the imported merchandise is, as described in paragraph (a) 
or paragraph (b) of this section, a civil aircraft or has been imported 
for use in a civil aircraft and will be so used.
    (e) Documentation. Each entry summary claiming duty-free admission 
for imported merchandise in accordance with paragraph (c) of this 
section must be supported by documentation to verify the claim for duty-
free admission, including the written order or contract and other 
evidence that the merchandise entered qualifies under General Note 6, 
HTSUS, as a civil aircraft, aircraft engine, or ground flight simulator, 
or their parts, components, and subassemblies. Evidence that the 
merchandise qualifies under the general note includes evidence of 
compliance with paragraph (a)(1) of this section concerning use of the 
merchandise and evidence of compliance with the airworthiness 
certification requirement of paragraph (a)(2)(i), (a)(2)(ii), or 
(a)(2)(iii) of this section, including, as appropriate in the 
circumstances, an FAA certification; approval of airworthiness by an 
airworthiness authority in the country of export and evidence that the 
FAA recognizes that approval as an acceptable substitute for an FAA 
certification; an application for a certification submitted to and 
accepted by the FAA; a type and production certificate issued by the 
FAA; and/or evidence that a type and production certificate holder will 
submit an application for certification or approval in the future 
pending completion of design or other technical requirements stipulated 
by the FAA and of estimates of quantities of parts, components, and 
subassemblies as are required to meet design and technical requirements 
stipulated by the FAA. This documentation need not be filed with the 
entry summary but must be maintained in accordance with the general note 
and with the recordkeeping provisions of Part 163 of this chapter. 
Customs may request production of documentation at any time to verify 
the claim for duty-free admission. Failure to produce documentation 
sufficient to satisfy the port director that the merchandise qualifies 
for duty-free admission will result in a denial of duty-free treatment 
and may result in such other measures permitted under the regulations as 
the port director finds necessary to more closely monitor the importer's 
importations of merchandise claimed to be duty-free under this section. 
Proof of end use of the entered merchandise need not be maintained.
    (f) Post-entry claim. An importer may file a claim for duty-free 
treatment under General Note 6, HTSUS, after filing an entry that made 
no such duty-free claim, by filing a written statement with Customs any 
time prior to liquidation of the entry or prior to the liquidation 
becoming final. When filed, the written statement constitutes the 
importer=s claim for duty-free treatment under the general note and its 
certification that the entered merchandise is a civil aircraft or has 
been imported for use in a civil aircraft and will be so used. In 
accordance with General Note 6, HTSUS, any refund resulting from a claim 
made under this paragraph will be without interest, notwithstanding the 
provision of 19 U.S.C. 1505(c).
    (g) Verification. The port director will monitor and periodically 
audit selected entries made under this section.

[T.D. 01-31, 67 FR 39289, June 7, 2002]



                  Subpart B_Caribbean Basin Initiative

    Source: Sections 10.191 through 10.197 issued by T.D. 84-237, 49 FR 
47993, Dec. 7, 1984, unless otherwise noted.



Sec. 10.191  General.

    (a) Statutory authority. Subtitle A, Title II, Pub. L. 98-67, 
entitled the Caribbean Basin Economic Recovery Act (19 U.S.C. 2701-2706) 
and referred to as the Caribbean Basin Initiative (CBI), authorizes the 
President to proclaim duty-free treatment for all eligible articles from 
any beneficiary country.

[[Page 159]]

    (b) Definitions--(1) Beneficiary country. For purposes of Sec. 
10.191 through Sec. 10.199 and except as otherwise provided in Sec. 
10.195(b), the term ``beneficiary country'' means any country or 
territory or successor political entity with respect to which there is 
in effect a proclamation by the President designating such country, 
territory or successor political entity as a beneficiary country in 
accordance with section 212(a)(1)(A) of the Caribbean Basin Economic 
Recovery Act (19 U.S.C. 2702(a)(1)(A)).
    (2) Eligible articles. Except as provided herein, for purposes of 
Sec. 10.191(a), the term ``eligible articles'' means any merchandise 
which is imported directly from a beneficiary country as provided in 
Sec. 10.193 and which meets the country of origin criteria set forth in 
Sec. 10.195 or in Sec. 10.198b. The following merchandise shall not be 
considered eligible articles entitled to duty-free treatment under the 
CBI.
    (i) Textile and apparel articles which were not eligible articles 
for purposes of the CBI on January 1, 1994, as the CBI was in effect on 
that date.
    (ii) Footwear not designated on August 5, 1983, as eligible articles 
for the purpose of the Generalized System of Preferences under Title V, 
Trade Act of 1974, as amended (19 U.S.C. 2461 through 2467).
    (iii) Tuna, prepared or preserved in any manner, in airtight 
containers.
    (iv) Petroleum, or any product derived from petroleum, provided for 
in headings 2709 and 2710, Harmonized Tariff Schedule of the United 
States (HTSUS).
    (v) Watches and watch parts (including cases, bracelets and straps), 
of whatever type including, but not limited to, mechanical, quartz 
digital or quartz analog, if such watches or watch parts contain any 
material which is the product of any country with respect to which HTSUS 
column 2 rates of duty apply.
    (vi) Articles to which reduced rates of duty apply under Sec. 
10.198a.
    (vii) Sugars, sirups, and molasses, provided for in subheadings 
1701.11.00 and 1701.12.00, HTSUS, to the extent that importation and 
duty-free treatment of such articles are limited by Additional U.S. Note 
4, Chapter 17, HTSUS.
    (viii) Articles subject to the provisions of the subheadings of 
Subchapter III, from the beginning through 9903.85.21, Chapter 99, 
HTSUS, to the extent that such provisions have not been modified or 
terminated by the President pursuant to section 213(e)(5) of the 
Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(e)(5)).
    (ix) Merchandise for which duty-free treatment under the CBI is 
suspended or withdrawn by the President pursuant to sections 213 (c)(2), 
(e)(1), or (f)(3) of the Caribbean Basin Economic Recovery Act (19 
U.S.C. 2703 (c)(2), (e)(1), or (f)(3)).
    (3) Wholly the growth, product, or manufacture of a beneficiary 
country. For purposes of Sec. 10.191 through Sec. 10.199, the 
expression ``wholly the growth, product, or manufacture of a beneficiary 
country'' refers both to any article which has been entirely grown, 
produced, or manufactured in a beneficiary country or two or more 
beneficiary countries and to all materials incorporated in an article 
which have been entirely grown, produced, or manufactured in any 
beneficiary country or two or more beneficary countries, as 
distinguished from articles or materials imported into a beneficiary 
country from a non-beneficiary country whether or not such articles or 
materials were substantially transformed into new or different articles 
of commerce after their importation into the beneficiary country.
    (4) Entered. For purposes of Sec. 10.191 through Sec. 10.199, the 
term ``entered'' means entered, or withdrawn from warehouse for 
consumption, in the customs territory of the U.S.

[T.D. 84-237, 49 FR 47993, Dec. 7, 1984, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988; T.D. 00-68, 65 FR 59657, Oct. 5, 2000; T.D. 01-17, 
66 FR 9645, Feb. 9, 2001]



Sec. 10.192  Claim for exemption from duty under the CBI.

    A claim for an exemption from duty on the ground that the CBI 
applies shall be allowed by the port director only if he is satisfied 
that the requirements set forth in this section and Sec. 10.193 through 
Sec. 10.198b have been met. Duty-free treatment may be claimed at

[[Page 160]]

the time of filing the entry summary by placing the symbol ``E'' as a 
prefix to the HTSUS subheading number for each article for which such 
treatment is claimed on that document.

[T.D. 84-237, 49 FR 47993, Dec. 7, 1984, as amended by T.D. 89-1, 53 FR 
51252, Dec. 21, 1988; T.D. 94-47, 59 FR 25570, May 17, 1994; T.D. 00-68, 
65 FR 59658, Oct. 5, 2000]



Sec. 10.193  Imported directly.

    To qualify for treatment under the CBI, an article shall be imported 
directly from a beneficiary country into the customs territory of the 
U.S. For purposes of Sec. 10.191 through Sec. 10.198b the words 
``imported directly'' mean:
    (a) Direct shipment from any beneficiary country to the U.S. without 
passing through the territory of any non-beneficiary country; or
    (b) If the shipment is from any beneficiary country to the U.S. 
through the territory of any non-beneficiary country, the articles in 
the shipment do not enter into the commerce of any non-beneficiary 
country while en route to the U.S. and the invoices, bills of lading, 
and other shipping documents show the U.S. as the final destination; or
    (c) If the shipment is from any beneficiary country to the U.S. 
through the territory of any non-beneficiary country, and the invoices 
and other documents do not show the U.S. as the final destination, the 
articles in the shipment upon arrival in the U.S. are imported directly 
only if they:
    (1) Remained under the control of the customs authority of the 
intermediate country;
    (2) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commericial transaction between the importer and the producer or the 
latter's sales agent; and
    (3) Were not subjected to operations other than loading and 
unloading, and other activities necessary to preserve the articles in 
good condition.

[T.D. 84-237, 49 FR 47993, Dec. 7, 1984, as amended by T.D. 00-68, 65 FR 
59658, Oct. 5, 2000]



Sec. 10.194  Evidence of direct shipment.

    (a) Documents constituting evidence of direct shipment. The port 
director may require that appropriate shipping papers, invoices, or 
other documents be submitted within 60 days of the date of entry as 
evidence that the articles were ``imported directly'', as that term is 
defined in Sec. 10.193. Any evidence of direct shipment required shall 
be subject to such verification as deemed necessary by the port 
director.
    (b) Waiver of evidence of direct shipment. The port director may 
waive the submission of evidence of direct shipment when otherwise 
satisfied, taking into consideration the kind and value of the 
merchandise, that the merchandise was, in fact, imported directly and 
that it otherwise clearly qualifies for treatment under the CBI.



Sec. 10.195  Country of origin criteria.

    (a) Articles produced in a beneficiary country--(1) General. Except 
as provided herein, any article which is either wholly the growth, 
product, or manufacture of a beneficiary country or a new or different 
article of commerce which has been grown, produced, or manufactured in a 
beneficiary country, may qualify for duty-free entry under the CBI. No 
article or material shall be considered to have been grown, produced, or 
manufactured in a beneficiary country by virtue of having merely 
undergone simple (as opposed to complex or meaningful) combining or 
packaging operations, or mere dilution with water or mere dilution with 
another substance that does not materially alter the characteristics of 
the article. Duty-free entry under the CBI may be accorded to an article 
only if the sum of the cost or value of the material produced in a 
beneficiary country or countries, plus the direct costs of processing 
operations performed in a beneficiary country or countries, is not less 
than 35 percent of the appraised value of the article at the time it is 
entered.
    (2) Combining, packaging, and diluting operations. No article which 
has undergone only a simple combining or packaging operation or a mere 
dilution in a beneficiary country within the meaning of paragraph (a)(1) 
of this section shall be entitled to duty-free treatment

[[Page 161]]

even though the processing operation causes the article to meet the 
value requirement set forth in that paragraph.
    (i) For purposes of this section, simple combining or packaging 
operations and mere dilution include, but are not limited to, the 
following processes:
    (A) The addition of batteries to devices;
    (B) Fitting together a small number of components by bolting, 
glueing, soldering etc.;
    (C) Blending foreign and beneficiary country tobacco;
    (D) The addition of substances such as anticaking agents, 
preservatives, wetting agents, etc.;
    (E) Repacking or packaging components together;
    (F) Reconstituting orange juice by adding water to orange juice 
concentrate; and
    (G) Diluting chemicals with inert ingredients to bring them to 
standard degrees of strength.
    (ii) For purposes of this section, simple combining or packaging 
operations and mere dilution shall not be taken to include processes 
such as the following:
    (A) The assembly of a large number of discrete components onto a 
printed circuit board;
    (B) The mixing together of two bulk medicinal substances followed by 
the packaging of the mixed product into individual doses for retail 
sale;
    (C) The addition of water or another substance to a chemical 
compound under pressure which results in a reaction creating a new 
chemical compound; and
    (D) A simple combining or packaging operation or mere dilution 
coupled with any other type of processing such as testing or fabrication 
(e.g., a simple assembly of a small number of components, one of which 
was fabricated in the beneficiary country where the assembly took 
place).

The fact that an article or material has undergone more than a simple 
combining or packaging operation or mere dilution is not necessarily 
dispositive of the question of whether that processing constitutes a 
substantial transformation for purposes of determining the country of 
origin of the article or material.
    (b) Commonwealth of Puerto Rico and U.S. Virgin Islands--(1) 
General. For purposes of determining the percentage referred to in 
paragraph (a) of this section, the term ``beneficiary country'' includes 
the Commonwealth of Puerto Rico and the U.S. Virgin Islands. Any cost or 
value of materials or direct costs of processing operations attributable 
to the U.S. Virgin Islands must be included in the article prior to its 
final exportation from a beneficiary country to the United States.
    (2) Manufacture in the Commonwealth of Puerto Rico after final 
exportation. Notwithstanding the provisions of 19 U.S.C. 1311, if an 
article from a beneficiary country is entered under bond for processing 
or use in manufacturing in the Commonwealth of Puerto Rico, no duty will 
be imposed on the withdrawal from warehouse for consumption of the 
product of that processing or manufacturing provided that:
    (i) The article entered in the warehouse in the Commonwealth of 
Puerto Rico was grown, produced, or manufactured in a beneficiary 
country within the meaning of paragraph (a) of this section and was 
imported directly from a beneficiary country within the meaning of Sec. 
10.193; and
    (ii) At the time of its withdrawal from the warehouse, the product 
of the processing or manufacturing in the Commonwealth of Puerto Rico 
meets the 35 percent value-content requirement prescribed in paragraph 
(a) of this section.
    (c) Materials produced in the U.S. For purposes of determining the 
percentage referred to in paragraph (a) of this section, an amount not 
to exceed 15 percent of the appraised value of the article at the time 
it is entered may be attributed to the cost or value of materials 
produced in the customs territory of the U.S. (other than the 
Commonwealth of Puerto Rico). In the case of materials produced in the 
customs territory of the U.S., the provisions of Sec. 10.196 shall 
apply.
    (d) Textile components cut to shape in the U.S. The percentage 
referred to in paragraph (c) of this section may be attributed in whole 
or in part to the cost or value of a textile component that is cut to 
shape (but not to length, width, or both) in the U.S. (including the

[[Page 162]]

Commonwealth of Puerto Rico) from foreign fabric and exported to a 
beneficiary country for assembly into an article that is then returned 
to the U.S. and entered, or withdrawn from warehouse, for consumption on 
or after July 1, 1996. For purposes of this paragraph, the terms 
``textile component'' and ``fabric'' have reference only to goods 
covered by the definition of ``textile or apparel product'' set forth in 
Sec. 102.21(b)(5) of this chapter.
    (e) Articles wholly grown, produced, or manufactured in a 
beneficiary country. Any article which is wholly the growth, product, or 
manufacture of a beneficiary country, including articles produced or 
manufactured in a beneficiary country exclusively from materials which 
are wholly the growth, product, or manufacture of a beneficiary country 
or countries, shall normally be presumed to meet the requirements set 
forth in paragraph (a) of this section.
    (f) Country of origin marking. The general country of origin marking 
requirements that apply to all importations are also applicable to 
articles imported under the CBI.

[T.D. 84-237, 49 FR 47993, Dec. 7, 1984; 49 FR 49575, Dec. 20, 1984, as 
amended by T.D. 95-69, 60 FR 46197, Sept. 5, 1995; T.D. 95-69, 60 FR 
55995, Nov. 6, 1996; T.D. 00-68, 65 FR 59658, Oct. 5, 2000]



Sec. 10.196  Cost or value of materials produced in a beneficiary 
country or countries.

    (a) ``Materials produced in a beneficiary country or countries'' 
defined. For purposes of Sec. 10.195, the words ``materials produced in 
a beneficiary country or countries'' refer to those materials 
incorporated in an article which are either:
    (1) Wholly the growth, product, or manufacture of a beneficiary 
country or two or more beneficiary countries; or
    (2) Subject to the limitations set forth in Sec. 10.195(a), 
substantially transformed in any beneficiary country or two or more 
beneficiary countries into a new or different article of commerce which 
is then used in any beneficiary country in the production or manufacture 
of a new or different article which is imported directly into the U.S.

    Example 1. A raw, perishable skin of an animal grown in one 
beneficiary country is sent to another beneficiary country where it is 
tanned to create nonperishable ``crust leather''. The tanned product is 
then imported directly into the U.S. Because the material of which the 
imported article is composed is wholly the growth, product, or 
manufacture of one of more beneficiary countries, the entire cost or 
value of that material may be counted toward the 35 percent value 
requirement set forth in Sec. 10.195.
    Example 2. A raw, perishable skin of an animal grown in a non-
beneficiary country is sent to a beneficiary country where it is tanned 
to create nonperishable ``crust leather''. The tanned skin is then 
imported directly into the U.S. Although the tanned skin represents a 
new or different article of commerce produced in a beneficiary country 
within the meaning of Sec. 10.195(a), the cost or value of the raw skin 
may not be counted toward the 35 percent value requirement because (1) 
the tanned material of which the imported article is composed is not 
wholly the growth, product, or manufacture of a beneficiary country and 
(2) the tanning operation creates the imported article itself rather 
than an intermediate article which is then used in the beneficiary 
country in the production or manufacture of an article imported into the 
U.S. The tanned skin would be eligible for duty-free treatment only if 
the direct costs attributable to the tanning operation represent at 
least 35 percent of the appraised value of the imported article.
    Example 3. A raw, perishable skin of an animal grown in a non-
beneficiary country is sent to a beneficiary country where it is tanned 
to create nonperishable ``crust leather''. The tanned material is then 
cut, sewn and assembled with a metal buckle imported from a non-
beneficiary country to create a finished belt which is imported directly 
into the U.S. Because the operations performed in the beneficiary 
country involved both the substantial transformation of the raw skin 
into a new or different article and the use of that intermediate article 
in the production or manufacture of a new or different article imported 
into the U.S., the cost or value of the tanned material used to make the 
imported article may be counted toward the 35 percent value requirement. 
The cost or value of the metal buckle imported into the beneficiary 
country may not be counted toward the 35 percent value requirement 
because the buckle was not substantially transformed in the beneficiary 
country into a new or different article prior to its incorporation in 
the finished belt.
    Example 4. A raw, perishable skin of an animal grown in the U.S. 
Virgin Islands is sent to a beneficiary country where it is tanned to 
create nonperishable ``crust leather'', which is then imported directly 
into the U.S.

[[Page 163]]

The tanned skin represents a new or different article of commerce 
produced in a beneficiary country within the meaning of Sec. 10.195(a), 
and under Sec. 10.195(b), the raw skin from which the tanned product 
was made is considered to have been grown in a beneficiary country for 
the purpose of applying the 35 percent value requirement. The tanned 
material of which the imported article is composed is considered to be 
wholly the growth, product, or manufacture of one or more beneficiary 
countries with the result that the entire cost or value of that material 
may be counted toward the 35 percent value requirement.

    (b) Questionable origin. When the origin of a material either is not 
ascertainable or is not satisfactorily demonstrated to the port 
director, the material shall not be considered to have been grown, 
produced, or manufactured in a beneficiary country.
    (c) Determination of cost or value of materials produced in a 
beneficiary country. (1) The cost or value of materials produced in a 
beneficiary country or countries includes:
    (i) The manufacturer's actual cost for the materials;
    (ii) When not included in the manufacturer's actual cost for the 
materials, the freight, insurance, packing, and all other costs incurred 
in transporting the materials to the manufacturer's plant;
    (iii) The actual cost of waste or spoilage (material list), less the 
value of recoverable scrap; and
    (iv) Taxes and/or duties imposed on the materials by any beneficiary 
country, provided they are not remitted upon exportation.
    (2) Where a material is provided to the manufacturer without charge, 
or at less than fair market value, its cost or value shall be determined 
by computing the sum of:
    (i) All expenses incurred in the growth, production, or manufacture 
of the material, including general expenses;
    (ii) An amount for profit; and
    (iii) Freight, insurance, packing, and all other costs incurred in 
transporting the material to the manufacturer's plant.

If the pertinent information needed to compute the cost or value of a 
material is not available, the appraising officer may ascertain or 
estimate the value thereof using all reasonable ways and means at his 
disposal.



Sec. 10.197  Direct costs of processing operations performed in a 
beneficiary country or countries.

    (a) Items included in the direct costs of processing operations. As 
used in Sec. 10.195 and Sec. 10.198, the words ``direct costs of 
processing operations'' mean those costs either directly incurred in, or 
which can be reasonably allocated to, the growth, production, 
manufacture, or assembly of the specific merchandise under 
consideration. Such costs include, but are not limited to the following, 
to the extent that they are includable in the appraised value of the 
imported merchandise:
    (1) All actual labor costs involved in the growth, production, 
manufacture or assembly of the specific merchandise, including fringe 
benefits, on-the-job training, and the cost of engineering, supervisory, 
quality control, and similar personnel;
    (2) Dies, molds, tooling, and depreciation on machinery and 
equipment which are allocable to the specific merchandise;
    (3) Research, development, design, engineering, and blueprint costs 
insofar as they are allocable to the specific merchandise and;
    (4) Costs of inspecting and testing the specific merchandise.
    (b) Items not included in the direct costs of processing operations. 
Those items which are not included within the meaning of the words 
``direct costs of processing operations'' are those which are not 
directly attributable to the merchandise under consideration or are not 
``costs'' of manufacturing the product. These include, but are not 
limited to:
    (1) Profit; and
    (2) General expenses of doing business which are either not 
allocable to the specific merchandise or are not related to the growth, 
production, manufacture, or assembly of the merchandise, such as 
administrative salaries, casualty and liability insurance, advertising, 
and salesmen's salaries, commissions, or expenses.

[T.D. 84-237, 49 FR 47993, Dec. 7, 1984; 49 FR 49575, Dec. 20, 1984]

[[Page 164]]



Sec. 10.198  Evidence of country of origin.

    (a) Shipments covered by a formal entry--(1) Articles not wholly the 
growth, product, or manufacture of a beneficiary country--(i) 
Declaration. In a case involving an article covered by a formal entry 
which is not wholly the growth, product, or manufacture of a single 
beneficiary country, the exporter or other appropriate party having 
knowledge of the relevant facts in the beneficiary country where the 
article was produced or last processed shall be prepared to submit 
directly to the port director, upon request, a declaration setting forth 
all pertinent detailed information concerning the production or 
manufacture of the article. When requested by the port director, the 
declaration shall be prepared in substantially the following form:

                             CBI Declaration

    I. ----------------------------,
(name), hereby declare that the articles described below (a) were 
produced or manufactured in ---------------- (country) by means of 
processing operations performed in that country as set forth below and 
were also subjected to processing operations in the other beneficiary 
country or countries (including the Commonwealth of Puerto Rico and the 
U.S. Virgin Islands) as set forth below and (b) incorporate materials 
produced in the country named above or in any other beneficiary country 
or countries (including the Commonwealth of Puerto Rico and the U.S. 
Virgin Islands) or in the customs territory of the United States (other 
than the Commonwealth of Puerto Rico) as set forth below:

----------------------------------------------------------------------------------------------------------------
                                                 Processing operations performed      Material produced in a
                                                           on articles             beneficiary country or in the
                                                ---------------------------------              U.S.
                                                                                 -------------------------------
                                 Description of   Description of                  Description of
  Number and date of invoices     articles and      processing     Direct costs      material,
                                    quantity      operations and   of processing    production     Cost or value
                                                    country of      operations     process, and     of material
                                                    processing                      country of
                                                                                    production
----------------------------------------------------------------------------------------------------------------
                                ...............  ...............  ..............  ..............  ..............
                                ...............  ...............  ..............  ..............  ..............
                                ...............  ...............  ..............  ..............  ..............
                                ...............  ...............  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------

Date____________________________________________________________________
Address_________________________________________________________________
Signature_______________________________________________________________
Title___________________________________________________________________

    (ii) Retention of records and submission of declaration. The 
information necessary for preparation of the declaration shall be 
retained in the files of the party responsible for its preparation and 
submission for a period of 5 years. In the event that the port director 
requests submission of the declaration during the 5-year period, it 
shall be submitted by the appropriate party directly to the port 
director within 60 days of the date of the request or such additional 
period as the port director may allow for good cause shown. Failure to 
submit the declaration in a timely fashion will result in a denial of 
duty-free treatment.
    (iii) Value added after final exportation. In a case in which value 
is added to an article in a bonded warehouse or in a foreign-trade zone 
in the Commonwealth of Puerto Rico or in the U.S. after final 
exportation of the article from a beneficiary country, in order to 
ensure compliance with the value requirement under Sec. 10.195(a), the 
declaration provided for in paragraph (a)(1)(i) of this section shall be 
filed by the importer or consignee with the entry summary as evidence of 
the country of origin. The declaration shall be properly completed by 
the party responsible for the addition of such value.
    (2) Merchandise wholly the growth, product, or manufacture of a 
beneficiary country. In a case involving merchandise covered by a formal 
entry which is wholly the growth, product, or manufacture of a single 
beneficiary country, a statement to that effect shall be included on the 
commercial invoice provided to Customs.
    (b) Shipments covered by an informal entry. Although the filing of 
the declaration provided for in paragraph

[[Page 165]]

(a)(1)(i) of this section will not be required for a shipment covered by 
an informal entry, the port director may require such other evidence of 
country of origin as deemed necessary.
    (c) Verification of documentation. Any evidence of country of origin 
submitted under this section shall be subject to such verification as 
the port director deems necessary. In the event that the port director 
is prevented from obtaining the necessary verification, the port 
director may treat the entry as dutiable.

[T.D. 94-47, 59 FR 25570, May 17, 1994]



Sec. 10.198a  Duty reduction for certain leather-related articles.

    Except as otherwise provided in Sec. 10.233, reduced rates of duty 
as proclaimed by the President will apply to handbags, luggage, flat 
goods, work gloves, and leather wearing apparel that were not designated 
on August 5, 1983, as eligible articles for purposes of the Generalized 
System of Preferences under Title V, Trade Act of 1974, as amended (19 
U.S.C. 2461 through 2467), provided that the article in question at the 
time it is entered:
    (a) Was grown, produced, or manufactured in a beneficiary country 
within the meaning of Sec. 10.195;
    (b) Meets the 35 percent value-content requirement prescribed in 
Sec. 10.195; and
    (c) Was imported directly from a beneficiary country within the 
meaning of Sec. 10.193.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000]



Sec. 10.198b  Products of Puerto Rico processed in a beneficiary country.

    Except in the case of any article described in Sec. 10.191(b)(2)(i) 
through (vi), the duty-free treatment provided for under the CBI will 
apply to an article that is the growth, product, or manufacture of the 
Commonwealth of Puerto Rico and that is by any means advanced in value 
or improved in condition in a beneficiary country, provided that:
    (a) If any materials are added to the article in the beneficiary 
country, those materials consist only of materials that are a product of 
a beneficiary country or the United States; and
    (b) The article is imported directly from the beneficiary country 
into the customs territory of the United States within the meaning of 
Sec. 10.193.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000]



Sec. 10.199  Duty-free entry for certain beverages produced in Canada 
from Caribbean rum.

    (a) General. A spirituous beverage that is imported directly from 
the territory of Canada and that is classifiable under subheading 
2208.40 or 2208.90, Harmonized Tariff Schedule of the United States 
(HTSUS), will be entitled, upon entry or withdrawal from warehouse for 
consumption, to duty-free treatment under section 213(a)(6) of the 
Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(a)(6)), also known 
as the Caribbean Basin Initiative (CBI), if the spirituous beverage has 
been produced in the territory of Canada from rum, provided that the 
rum:
    (1) Is the growth, product, or manufacture either of a beneficiary 
country or of the U.S. Virgin Islands;
    (2) Was imported directly into the territory of Canada from a 
beneficiary country or from the U.S. Virgin Islands; and
    (3) Accounts for at least 90 percent of the alcoholic content by 
volume of the spirituous beverage.
    (b) Claim for exemption from duty under CBI. A claim for an 
exemption from duty for a spirituous beverage under section 213(a)(6) of 
the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(a)(6)) may be 
made by entering such beverage under subheading 9817.22.05, HTSUS, on 
the entry summary document or its electronic equivalent. In order to 
claim the exemption, the importer must have the records described in 
paragraphs (d), (e), (f) and (g) of this section so that, upon Customs 
request, the importer can establish that:
    (1) The rum used to produce the beverage is the growth, product or 
manufacture either of a beneficiary country or of the U.S. Virgin 
Islands;
    (2) The rum was shipped directly from a beneficiary country or from 
the U.S. Virgin Islands to Canada;
    (3) The beverage was produced in Canada;

[[Page 166]]

    (4) The rum accounts for at least 90% of the alcohol content of the 
beverage; and
    (5) The beverage was shipped directly from Canada to the United 
States.
    (c) Imported directly. For a spirituous beverage imported from 
Canada to qualify for duty-free entry under the CBI, the spirituous 
beverage must be imported directly into the customs territory of the 
United States from Canada; and the rum used in its production must have 
been imported directly into the territory of Canada either from a 
beneficiary country or from the U.S. Virgin Islands.
    (1) ``Imported directly'' into the customs territory of the United 
States from Canada means:
    (i) Direct shipment from the territory of Canada to the U.S. without 
passing through the territory of any other country; or
    (ii) If the shipment is from the territory of Canada to the U.S. 
through the territory of any other country, the spirituous beverages do 
not enter into the commerce of any other country while en route to the 
U.S.; or
    (iii) If the shipment is from the territory of Canada to the U.S. 
through the territory of another country, and the invoices and other 
documents do not show the U.S. as the final destination, the spirituous 
beverages in the shipment are imported directly only if they:
    (A) Remained under the control of the customs authority of the 
intermediate country;
    (B) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
latter's sales agent; and
    (C) Were not subjected to operations other than loading and 
unloading, and other activities necessary to preserve the products in 
good condition.
    (2) ``Imported directly'' from a beneficiary country or from the 
U.S. Virgin Islands into the territory of Canada means:
    (i) Direct shipment from a beneficiary country or from the U.S. 
Virgin Islands into the territory of Canada without passing through the 
territory of any non-beneficiary country; or
    (ii) If the shipment is from a beneficiary country or from the U.S. 
Virgin Islands into the territory of Canada through the territory of any 
non-beneficiary country, the rum does not enter into the commerce of any 
non-beneficiary country while en route to Canada; or
    (iii) If the shipment is from a beneficiary country or from the U.S. 
Virgin Islands into the territory of Canada through the territory of any 
non-beneficiary country, the rum in the shipment is imported directly 
into the territory of Canada only if it:
    (A) Remained under the control of the customs authority of the 
intermediate country;
    (B) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail; and
    (C) Was not subjected to operations in the intermediate country 
other than loading and unloading, and other activities necessary to 
preserve the product in good condition.
    (d) Evidence of direct shipment--(1) Spirituous beverages imported 
from Canada. The importer must be prepared to provide to the port 
director, if requested, documentary evidence that the spirituous 
beverages were imported directly from the territory of Canada, as 
described in paragraph (c)(1) of this section. This evidence may include 
documents such as a bill of lading, invoice, air waybill, freight 
waybill, or cargo manifest. Any evidence of the direct shipment of these 
spirituous beverages from Canada into the U.S. may be subject to such 
verification as deemed necessary by the port director.
    (2) Rum imported into Canada from beneficiary country or U.S. Virgin 
Islands. The importer must be prepared to provide to the port director, 
if requested, evidence that the rum used in producing the spirituous 
beverages was imported directly into the territory of Canada from a 
beneficiary country or from the U.S. Virgin Islands, as described in 
paragraph (c)(2) of this section. This evidence may include documents 
such as a Canadian customs entry, Canadian customs invoice, Canadian 
customs manifest, cargo manifest,

[[Page 167]]

bill of lading, landing certificate, airway bill, or freight waybill. 
Any evidence of the direct shipment of the rum from a beneficiary 
country or from the U.S. Virgin Islands into the territory of Canada for 
use there in producing the spirituous beverages may be subject to such 
verification as deemed necessary by the port director.
    (e) Origin of rum used in production of the spirituous beverage--(1) 
Origin criteria. In order for a spirituous beverage covered by this 
section to be entitled to duty-free entry under the CBI, the rum used in 
producing the spirituous beverage in the territory of Canada must be 
wholly the growth, product, or manufacture either of a beneficiary 
country under the CBI or of the U.S. Virgin Islands, or must constitute 
a new or different article of commerce that was produced or manufactured 
in a beneficiary country or in the U.S. Virgin Islands. Such rum will 
not be considered to have been grown, produced, or manufactured in a 
beneficiary country or in the U.S. Virgin Islands by virtue of having 
merely undergone blending, combining or packaging operations, or mere 
dilution with water or mere dilution with another substance that does 
not materially alter the characteristics of the product.
    (2) Evidence of origin of rum--(i) Declaration. The importer must be 
prepared to submit directly to the port director, if requested, a 
declaration prepared and signed by the person who produced or 
manufactured the rum, affirming that the rum is the growth, product or 
manufacture of a beneficiary country or of the U.S. Virgin Islands. 
While no particular form is prescribed for the declaration, it must 
include all pertinent information concerning the processing operations 
by which the rum was produced or manufactured, the address of the 
producer or manufacturer, the title of the party signing the 
declaration, and the date it is signed.
    (ii) Records supporting declaration. The supporting records, 
including those production records, that are necessary for the 
preparation of the declaration must also be available for submission to 
the port director if requested. The declaration and any supporting 
evidence as to the origin of the rum may be subject to such verification 
as deemed necessary by the port director.
    (f) Canadian processor declaration; supporting documentation. (1) 
Canadian processor declaration. The importer must be prepared to submit 
directly to the port director, if requested, a declaration prepared by 
the person who produced the spirituous beverage(s) in Canada, setting 
forth all pertinent information concerning the production of the 
beverages. The declaration will be in substantially the following form:
    I, -------- declare that the spirituous beverages here specified are 
the products that were produced by me (us), as described below, with the 
use of rum that was received by me (us); that the rum used in producing 
the beverages was received by me (us) on
    -------- (date), from -------- (name and address of owner or 
exporter in the beneficiary country or in the U.S. Virgin Islands, as 
applicable); and that such rum accounts for at least 90 percent of the 
alcoholic content by volume, as shown below, of each spirituous beverage 
so produced.

------------------------------------------------------------------------
                                                             Alcoholic
                                                            content of
                                       Description of        products;
         Marks and numbers             products and of       alcoholic
                                         processing         content (%)
                                                           attributable
                                                            to rum \1\
------------------------------------------------------------------------
                                    ....................  ..............
                                    ....................  ..............
                                    ....................  ..............
------------------------------------------------------------------------
\1\ The production records must establish, for each lot of beverage
  produced, the quantity of rum the growth, product or manufacture of a
  CBI beneficiary country or of the U.S. Virgin Islands under 19 U.S.C.
  2703(a)(6) that is used in producing the finished beverage; the
  alcoholic content by volume of the finished beverage; and the
  alcoholic content by volume of the finished beverage, expressed as a
  percentage, that is attributable to the qualifying rum. If rum from
  two or more qualifying sources (e.g., rum the growth, product or
  manufacture of a CBI beneficiary country or of the U.S. Virgin Islands
  and other rum the growth, product or manufacture of another CBI
  country) are used in processing the beverage, the alcoholic content
  requirement may be met by aggregating the alcoholic content of the
  finished beverage that is attributable to rum from each of the
  qualifying sources used in processing the finished beverage, as
  reflected in the production records.


Date____________________________________________________________________
Address_________________________________________________________________
Signature_______________________________________________________________
Title___________________________________________________________________

    (2) Availability of supporting documents. The information, including 
any supporting documents and records, necessary for the preparation of 
the declaration, as described in paragraph (f)(1) of this section, must 
be available for submission to the port director, if

[[Page 168]]

requested. The declaration and any supporting evidence may be subject to 
such verification as deemed necessary by the port director. The specific 
documentary evidence necessary to support the declaration consists of 
those documents and records which satisfactorily establish:
    (i) The receipt of the rum by the Canadian processor, including the 
date of receipt and the name and address of the party from whom the rum 
was received (the owner or exporter in the beneficiary country or the 
U.S. Virgin Islands); and
    (ii) For each lot of beverage produced and included in the 
declaration, the specific identification of the production lot(s) 
involved; the quantity of qualifying rum that is used in producing the 
finished beverage, including a description of the processing and of the 
finished products; the alcoholic content by volume of the finished 
beverage; and the alcoholic content by volume of the finished beverage, 
expressed as a percentage, that is attributable to the qualifying rum.
    (g) Importer system for review of necessary recordkeeping. The 
importer will establish and implement a system of internal controls 
which demonstrate that reasonable care was exercised in its claim for 
duty-free treatment under the CBI. These controls should include tests 
to assure the accuracy and availability of records that establish:
    (1) The origin of the rum;
    (2) The direct shipment of the rum from a beneficiary country or 
from the U.S. Virgin Islands to Canada;
    (3) The alcohol content of the finished beverage imported from 
Canada; and
    (4) The direct shipment of the finished beverage from Canada to the 
United States.
    (h) Submission of documents to Customs. The importer must be 
prepared to submit directly to the port director, if requested, those 
documents and/or supporting records as described in paragraphs (d), (e) 
and (f) of this section, for a period of 5 years from the date of entry 
of the related spirituous beverages under section 213(a)(6) of the 
Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(a)(6)), as 
provided in Sec. 163.4(a) of this chapter. If requested, the importer 
must submit such documents and/or supporting records to the port 
director within 60 calendar days of the date of the request or such 
additional period as the port director may allow for good cause shown.

[T.D. 02-59, 67 FR 62882, Oct. 9, 2002]



                    Subpart C_Andean Trade Preference

    Source: Sections 10.201 through 10.208 appear at T.D. 98-76, 63 FR 
51292, Sept. 25, 1998, unless otherwise noted.



Sec. 10.201  Applicability.

    Title II of Pub. L. 102-182 (105 Stat. 1233), entitled the Andean 
Trade Preference Act (ATPA) and codified at 19 U.S.C. 3201 through 3206, 
authorizes the President to proclaim duty-free treatment for all 
eligible articles from any beneficiary country and to designate 
countries as beneficiary countries. The provisions of Sec. Sec. 10.202 
through 10.207 set forth the legal requirements and procedures that 
apply for purposes of obtaining that duty-free treatment for certain 
articles from a beneficiary country which are identified for purposes of 
that treatment in General Note 11, Harmonized Tariff Schedule of the 
United States (HTSUS), and in the ``Special'' rate of duty column of the 
HTSUS. Provisions regarding preferential treatment of apparel and other 
textile articles under the ATPA are contained in Sec. Sec. 10.241 
through 10.248, and provisions regarding preferential treatment of tuna 
and certain other non-textile articles under the ATPA are contained in 
Sec. Sec. 10.251 through 10.257.

[T.D. 03-16, 68 FR 14486, Mar. 25, 2003; 68 FR 67338, Dec. 1, 2003]



Sec. 10.202  Definitions.

    The following definitions apply for purposes of Sec. Sec. 10.201 
through 10.207:
    (a) Beneficiary country. Except as otherwise provided in Sec. 
10.206(b), the term ``beneficiary country'' refers to any country or 
successor political entity with respect to which there is in effect a 
proclamation by the President designating such country or successor 
political entity as a beneficiary country in accordance with section 203 
of the ATPA (19 U.S.C. 3202).

[[Page 169]]

    (b) Eligible articles. The term ``eligible'' when used with 
reference to an article means merchandise which is imported directly 
from a beneficiary country as provided in Sec. 10.204, which meets the 
country of origin criteria set forth in Sec. 10.205 and the value-
content requirement set forth in Sec. 10.206, and which, if the 
requirements of Sec. 10.207 are met, is therefore entitled to duty-free 
treatment under the ATPA. However, the following merchandise shall not 
be considered eligible articles entitled to duty-free treatment under 
the ATPA:
    (1) Textiles and apparel articles which were not eligible articles 
for purposes of the ATPA on January 1, 1994, as the ATPA was in effect 
on that date, except as otherwise provided in Sec. Sec. 10.241 through 
10.248;
    (2) Rum and tafia classified in subheading 2208.40, Harmonized 
Tariff Schedule of the United States;
    (3) Sugars, syrups, and sugar-containing products subject to over-
quota duty rates under applicable tariff-rate quotas; or
    (4) Tuna prepared or preserved in any manner in airtight containers, 
except as otherwise provided in Sec. Sec. 10.251 through 10.257.
    (c) Entered. The term ``entered'' means entered, or withdrawn from 
warehouse for consumption, in the customs territory of the United 
States.
    (d) Wholly the growth, product, or manufacture of a beneficiary 
country. The expression ``wholly the growth, product, or manufacture of 
a beneficiary country'' has the same meaning as that set forth in Sec. 
10.191(b)(3) of this part.

[T.D. 98-76, 63 FR 51292, Sept. 25, 1998, as amended by T.D. 03-16, 68 
FR 14486, Mar. 25, 2003; 68 FR 67338, Dec. 1, 2003]



Sec. 10.203  Eligibility criteria in general.

    An article classifiable under a subheading of the Harmonized Tariff 
Schedule of the United States for which a rate of duty of ``Free'' 
appears in the ``Special'' subcolumn followed by the symbol ``J'' or 
``J*'' in parentheses is eligible for duty-free treatment, and will be 
accorded such treatment, if each of the following requirements is met:
    (a) Imported directly. The article is imported directly from a 
beneficiary country as provided in Sec. 10.204.
    (b) Country of origin criteria. The article complies with the 
country of origin criteria set forth in Sec. 10.205.
    (c) Value content requirement. The article complies with the value 
content requirement set forth in Sec. 10.206.
    (d) Filing of claim and submission of supporting documentation. The 
claim for duty-free treatment is filed, and any required documentation 
in support of the claim is submitted, in accordance with the procedures 
set forth in Sec. 10.207.



Sec. 10.204  Imported directly.

    In order to be eligible for duty-free treatment under the ATPA, an 
article shall be imported directly from a beneficiary country into the 
customs territory of the United States. For purposes of this 
requirement, the words ``imported directly'' mean:
    (a) Direct shipment from any beneficiary country to the United 
States without passing through the territory of any non-beneficiary 
country; or
    (b) If shipment from any beneficiary country to the United States 
was through the territory of a non-beneficiary country, the articles in 
the shipment did not enter into the commerce of the non-beneficiary 
country while en route to the United States, and the invoices, bills of 
lading, and other shipping documents show the United States as the final 
destination; or
    (c) If shipment from any beneficiary country to the United States 
was through the territory of a non-beneficiary country and the invoices 
and other documents do not show the United States as the final 
destination, then the articles in the shipment, upon arrival in the 
United States, are imported directly only if they:
    (1) Remained under the control of the customs authority in the 
intermediate country;
    (2) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the articles 
are imported into the United States as a result of the original 
commercial transaction between the importer and the producer or the 
latter's sales agent; and

[[Page 170]]

    (3) Were not subjected to operations in the intermediate country 
other than loading and unloading, and other activities necessary to 
preserve the articles in good condition.



Sec. 10.205  Country of origin criteria.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, an article may be eligible for duty-free treatment under the 
ATPA if the article is either:
    (1) Wholly the growth, product, or manufacture of a beneficiary 
country; or
    (2) A new or different article of commerce which has been grown, 
produced, or manufactured in a beneficiary country.
    (b) Exceptions. No article shall be eligible for duty-free treatment 
under the ATPA by virtue of having merely undergone simple (as opposed 
to complex or meaningful) combining or packaging operations, or mere 
dilution with water or mere dilution with another substance that does 
not materially alter the characteristics of the article. The principles 
and examples set forth in Sec. 10.195(a)(2) of this part shall apply 
equally for purposes of this paragraph.



Sec. 10.206  Value content requirement.

    (a) General. An article may be eligible for duty-free treatment 
under the ATPA only if the sum of the cost or value of the materials 
produced in a beneficiary country or countries, plus the direct costs of 
processing operations performed in a beneficiary country or countries, 
is not less than 35 percent of the appraised value of the article at the 
time it is entered.
    (b) Commonwealth of Puerto Rico, U.S. Virgin Islands and CBI 
beneficiary countries. For purposes of determining the percentage 
referred to in paragraph (a) of this section, the term ``beneficiary 
country'' includes the Commonwealth of Puerto Rico, the U.S. Virgin 
Islands, and any CBI beneficiary country as defined in Sec. 
10.191(b)(1) of this part. Any cost or value of materials or direct 
costs of processing operations attributable to the Virgin Islands or any 
CBI beneficiary country must be included in the article prior to its 
final exportation to the United States from a beneficiary country as 
defined in Sec. 10.202(a).
    (c) Materials produced in the United States. For purposes of 
determining the percentage referred to in paragraph (a) of this section, 
an amount not to exceed 15 percent of the appraised value of the article 
at the time it is entered may be attributed to the cost or value of 
materials produced in the customs territory of the United States (other 
than the Commonwealth of Puerto Rico). The principles set forth in 
paragraph (d)(1) of this section shall apply in determining whether a 
material is ``produced in the customs territory of the United States'' 
for purposes of this paragraph.
    (d) Cost or value of materials--(1) ``Materials produced in a 
beneficiary country or countries'' defined. For purposes of paragraph 
(a) of this section, the words materials produced in a beneficiary 
country or countries refer to those materials incorporated in an article 
which are either:
    (i) Wholly the growth, product, or manufacture of a beneficiary 
country or two or more beneficiary countries; or
    (ii) Substantially transformed in any beneficiary country or two or 
more beneficiary countries into a new or different article of commerce 
which is then used in any beneficiary country as defined in Sec. 
10.202(a) in the production or manufacture of a new or different article 
which is imported directly into the United States. For purposes of this 
paragraph (d)(1)(ii), no material shall be considered to be 
substantially transformed into a new or different article of commerce by 
virtue of having merely undergone simple (as opposed to complex or 
meaningful) combining or packaging operations, or mere dilution with 
water or mere dilution with another substance that does not materially 
alter the characteristics of the article. The examples set forth in 
Sec. 10.196(a) of this part, and the principles and examples set forth 
in Sec. 10.195(a)(2) of this part, shall apply for purposes of the 
corresponding context under paragraph (d)(1) of this section.

[[Page 171]]

    (2) Questionable origin. When the origin of a material either is not 
ascertainable or is not satisfactorily demonstrated to the appropriate 
port director, the material shall not be considered to have been grown, 
produced, or manufactured in a beneficiary country or in the customs 
territory of the United States.
    (3) Determination of cost or value of materials. (i) The cost or 
value of materials produced in a beneficiary country or countries or in 
the customs territory of the United States includes:
    (A) The manufacturer's actual cost for the materials;
    (B) When not included in the manufacturer's actual cost for the 
materials, the freight, insurance, packing, and all other costs incurred 
in transporting the materials to the manufacturer's plant;
    (C) The actual cost of waste or spoilage, less the value of 
recoverable scrap; and
    (D) Taxes and/or duties imposed on the materials by any beneficiary 
country or by the United States, provided they are not remitted upon 
exportation.
    (ii) Where a material is provided to the manufacturer without 
charge, or at less than fair market value, its cost or value shall be 
determined by computing the sum of:
    (A) All expenses incurred in the growth, production, or manufacture 
of the material, including general expenses;
    (B) An amount for profit; and
    (C) Freight, insurance, packing, and all other costs incurred in 
transporting the material to the manufacturer's plant.
    (iii) If the pertinent information needed to compute the cost or 
value of a material is not available, the appraising officer may 
ascertain or estimate the value thereof using all reasonable ways and 
means at his disposal.
    (e) Direct costs of processing operations--(1) Items included. For 
purposes of paragraph (a) of this section, the words direct costs of 
processing operations mean those costs either directly incurred in, or 
which can be reasonably allocated to, the growth, production, 
manufacture, or assembly of the specific merchandise under 
consideration. Such costs include, but are not limited to the following, 
to the extent that they are includable in the appraised value of the 
imported merchandise:
    (i) All actual labor costs involved in the growth, production, 
manufacture, or assembly of the specific merchandise, including fringe 
benefits, on-the-job training, and the cost of engineering, supervisory, 
quality control, and similar personnel;
    (ii) Dies, molds, tooling, and depreciation on machinery and 
equipment which are allocable to the specific merchandise;
    (iii) Research, development, design, engineering, and blueprint 
costs insofar as they are allocable to the specific merchandise; and
    (iv) Costs of inspecting and testing the specific merchandise.
    (2) Items not included. For purposes of paragraph (a) of this 
section, the words ``direct costs of processing operations'' do not 
include items which are not directly attributable to the merchandise 
under consideration or are not costs of manufacturing the product. These 
include, but are not limited to:
    (i) Profit; and
    (ii) General expenses of doing business which either are not 
allocable to the specific merchandise or are not related to the growth, 
production, manufacture, or assembly of the merchandise, such as 
administrative salaries, casualty and liability insurance, advertising, 
and salesmen's salaries, commissions, or expenses.
    (f) Articles wholly the growth, product, or manufacture of a 
beneficiary country. Any article which is wholly the growth, product, or 
manufacture of a beneficiary country as defined in Sec. 10.202(a), and 
any article produced or manufactured in a beneficiary country as defined 
in Sec. 10.202(a) exclusively from materials which are wholly the 
growth, product, or manufacture of a beneficiary country or countries, 
shall normally be presumed to meet the requirement set forth in 
paragraph (a) of this section.

[[Page 172]]



Sec. 10.207  Procedures for filing duty-free treatment claim and 
submitting supporting documentation.

    (a) Filing claim for duty-free treatment. Except as provided in 
paragraph (c) of this section, a claim for duty-free treatment under the 
ATPA may be made at the time of filing the entry summary by placing the 
symbol ``J'' as a prefix to the Harmonized Tariff Schedule of the United 
States subheading number applicable to each article for which duty-free 
treatment is claimed on that document.
    (b) Shipments covered by a formal entry--(1) Articles not wholly the 
growth, product, or manufacture of a beneficiary country--(i) 
Declaration. In a case involving an article covered by a formal entry 
for which duty-free treatment is claimed under the ATPA and which is not 
wholly the growth, product, or manufacture of a single beneficiary 
country as defined in Sec. 10.202(a), the exporter or other appropriate 
party having knowledge of the relevant facts in the beneficiary country 
as defined in Sec. 10.202(a) where the article was produced or last 
processed shall be prepared to submit directly to the port director, 
upon request, a declaration setting forth all pertinent detailed 
information concerning the production or manufacture of the article. 
When requested by the port director, the declaration shall be prepared 
in substantially the following form:

                            ATPA DECLARATION

    I, ------------ (name), hereby declare that the articles described 
below (a) were produced or manufactured in ------------
(country) by means of processing operations performed in that country as 
set forth below and were also subjected to processing operations in the 
other beneficiary country or countries (including the Commonwealth of 
Puerto Rico, the U.S. Virgin Islands, and any CBI beneficiary country) 
as set forth below and (b) incorporate materials produced in the country 
named above or in any other beneficiary country or countries (including 
the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and any CBI 
beneficiary country) or in the customs territory of the United States 
(other than the Commonwealth of Puerto Rico) as set forth below:________

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Processing operations performed on articles    Material produced in a beneficiary country
                                                            -----------------------------------------------                or in the U.S.
                                                                                                           ---------------------------------------------
    Number and date of invoices          Description of          Description of                                 Description of
                                      articles and quantity   processing operations     Direct costs of      material, production     Cost or value of
                                                                 and country of      processing operations   process, and country         material
                                                                   processing                                   of production
 
--------------------------------------------------------------------------------------------------------------------------------------------------------

Date____________________________________________________________________
Address_________________________________________________________________
Signature_______________________________________________________________
Title___________________________________________________________________

    (ii) Retention of records and submission of declaration. The 
information necessary for the preparation of the declaration shall be 
retained in the files of the party responsible for its preparation and 
submission for a period of 5 years. In the event that the port director 
requests submission of the declaration during the 5-year period, it 
shall be submitted by the appropriate party directly to the port 
director within 60 days of the date of the request or such additional 
period as the port director may allow for good cause shown. Failure to 
submit the declaration in a timely fashion will result in a denial of 
duty-free treatment.
    (iii) Value added after final exportation. In a case in which value 
is added to an article in the Commonwealth of Puerto Rico or in the 
United States after final exportation of the article from a beneficiary 
country as defined in Sec. 10.202(a), in order to ensure compliance 
with the value requirement under Sec. 10.206(a), the declaration 
provided for in paragraph (b)(1)(i) of this section shall be filed by 
the importer or consignee with the entry summary. The declaration shall 
be completed by the party responsible for the addition of such value.
    (2) Articles wholly the growth, product, or manufacture of a 
beneficiary country. In a case involving an article covered by a formal 
entry for which duty-free treatment is claimed under the ATPA

[[Page 173]]

and which is wholly the growth, product, or manufacture of a single 
beneficiary country as defined in Sec. 10.202(a), a statement to that 
effect shall be included on the commercial invoice provided to Customs.
    (c) Shipments covered by an informal entry. The normal procedure for 
filing a claim for duty-free treatment as set forth in paragraph (a) of 
this section need not be followed, and the filing of the declaration 
provided for in paragraph (b)(1)(i) of this section will not be 
required, in a case involving a shipment covered by an informal entry. 
However, the port director may require submission of such other evidence 
of entitlement to duty-free treatment as deemed necessary.
    (d) Evidence of direct importation--(1) Submission. The port 
director may require that appropriate shipping papers, invoices, or 
other documents be submitted within 60 days of the date of entry as 
evidence that the articles were ``imported directly'', as that term is 
defined in Sec. 10.204.
    (2) Waiver. The port director may waive the submission of evidence 
of direct importation when otherwise satisfied, taking into 
consideration the kind and value of the merchandise, that the 
merchandise was, in fact, imported directly and that it otherwise 
clearly qualifies for duty-free treatment under the ATPA.
    (e) Verification of documentation. The documentation submitted under 
this section to demonstrate compliance with the requirements for duty-
free treatment under the ATPA shall be subject to such verification as 
the port director deems necessary. In the event that the port director 
is prevented from obtaining the necessary verification, the port 
director may treat the entry as fully dutiable.



  Subpart D_Textile and Apparel Articles Under the African Growth and 
                             Opportunity Act

    Source: T.D. 00-67, 65 FR 59676, Oct. 5, 2000, unless otherwise 
noted.



Sec. 10.211  Applicability.

    Title I of Public Law 106-200 (114 Stat. 251), entitled the African 
Growth and Opportunity Act (AGOA), authorizes the President to extend 
certain trade benefits to designated countries in sub-Saharan Africa. 
Section 112 of the AGOA, codified at 19 U.S.C. 3721, provides for the 
preferential treatment of certain textile and apparel articles from 
beneficiary countries. The provisions of Sec. Sec. 10.211-10.217 of 
this part set forth the legal requirements and procedures that apply for 
purposes of obtaining preferential treatment pursuant to section 112.



Sec. 10.212  Definitions.

    When used in Sec. Sec. 10.211 through 10.217, the following terms 
have the meanings indicated:
    Apparel articles. ``Apparel articles'' means goods classifiable in 
Chapters 61 and 62 and headings 6501, 6502, 6503, and 6504 and 
subheadings 6406.99 and 6505.90 of the HTSUS.
    Assembled in one or more beneficiary countries. ``Assembled in one 
or more beneficiary countries'' when used in the context of a textile or 
apparel article has reference to a joining together of two or more 
components that occurred in one or more beneficiary countries, whether 
or not a prior joining operation was performed on the article or any of 
its components in the United States.
    Beneficiary country. ``Beneficiary country'' means a country listed 
in section 107 of the African Growth and Opportunity Act (19 U.S.C. 
3706) which has been the subject of a finding by the President or his 
designee, published in the Federal Register, that the country has 
satisfied the requirements of section 113 of the African Growth and 
Opportunity Act (19 U.S.C. 3722) and which the President has designated 
as a beneficiary sub-Saharan African country under section 506A of the 
Trade Act of 1974 (19 U.S.C. 2466a).
    Cut in one or more beneficiary countries. ``Cut in one or more 
beneficiary countries'' when used with reference to apparel articles 
means that all fabric components used in the assembly of the article 
were cut from fabric in one or more beneficiary countries.
    Foreign. ``Foreign'' means of a country other than the United States 
or a beneficiary country.

[[Page 174]]

    HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United 
States.
    Knit-to-shape articles. ``Knit-to-shape,'' when used with reference 
to sweaters or other apparel articles, means any apparel article of 
which 50 percent or more of the exterior surface area is formed by major 
parts that have been knitted or crocheted directly to the shape used in 
the apparel article, with no consideration being given to patch pockets, 
appliques, or the like. Minor cutting, trimming, or sewing of those 
major parts will not affect the determination of whether an apparel 
article is ``knit-to-shape.''
    Knit-to-shape components. ``Knit-to-shape,'' when used with 
reference to textile components, means components that are knitted or 
crocheted from a yarn directly to a specific shape containing a self-
start edge. Minor cutting or trimming will not affect the determination 
of whether a component is ``knit-to-shape.''
    Major parts. ``Major parts'' means integral components of an apparel 
article but does not include collars, cuffs, waistbands, plackets, 
pockets, linings, paddings, trim, accessories, or similar parts or 
components.
    NAFTA. ``NAFTA'' means the North American Free Trade Agreement 
entered into by the United States, Canada, and Mexico on December 17, 
1992.
    Originating. ``Originating'' means having the country of origin 
determined by application of the provisions of Sec. 102.21 of this 
chapter.
    Preferential treatment. ``Preferential treatment'' means entry, or 
withdrawal from warehouse for consumption, in the customs territory of 
the United States free of duty and free of any quantitative limitations 
as provided in 19 U.S.C. 3721.
    Wholly assembled in. When used with reference to a textile or 
apparel article in the context of one or more beneficiary countries or 
one or more lesser developed beneficiary countries, the expression 
``wholly assembled in'' means that all of the components of the textile 
or apparel article (including thread, decorative embellishments, 
buttons, zippers, or similar components) were joined together in one or 
more beneficiary countries or one or more lesser developed beneficiary 
countries.
    Wholly formed fabrics. ``Wholly formed,'' when used with reference 
to fabric(s), means that all of the production processes, starting with 
polymers, fibers, filaments, textile strips, yarns, twine, cordage, 
rope, or strips of fabric and ending with a fabric by a weaving, 
knitting, needling, tufting, felting, entangling or other process, took 
place in the United States or in one or more beneficiary countries.
    Wholly formed on seamless knitting machines. ``Wholly formed on 
seamless knitting machines,'' when used to describe apparel articles, 
has reference to a process that created a knit-to-shape apparel article 
by feeding yarn(s) into a knitting machine to result in that article. 
When taken from the knitting machine, an apparel article created by this 
process either is in its final form or requires only minor cutting or 
trimming or the addition of minor components or parts such as patch 
pockets, appliques, capping, or elastic strip.
    Wholly formed yarns. ``Wholly formed,'' when used with reference to 
yarns, means that all of the production processes, starting with the 
extrusion of filament, strip, film, or sheet and including slitting a 
film or sheet into strip, or the spinning of all fibers into yarn, or 
both, and ending with a yarn or plied yarn, took place in a single 
country.

[T.D. 00-67, 65 FR 59676, Oct. 5, 2000; 65 FR 67260, Nov. 9, 2000, as 
amended by T.D. 03-15, 68 FR 13824, Mar. 21, 2003]



Sec. 10.213  Articles eligible for preferential treatment.

    (a) General. The preferential treatment referred to in Sec. 10.211 
applies to the following textile and apparel articles that are imported 
directly into the customs territory of the United States from a 
beneficiary country:
    (1) Apparel articles sewn or otherwise assembled in one or more 
beneficiary countries from fabrics wholly formed and cut, or from 
components knit-to-shape, in the United States, from yarns wholly formed 
in the United States, (including fabrics not formed from yarns, if those 
fabrics are classifiable under heading 5602 or 5603 of the HTSUS and are 
wholly formed and cut

[[Page 175]]

in the United States) that are entered under subheading 9802.00.80 of 
the HTSUS;
    (2) Apparel articles sewn or otherwise assembled in one or more 
beneficiary countries from fabrics wholly formed and cut, or from 
components knit-to-shape, in the United States, from yarns wholly formed 
in the United States, (including fabrics not formed from yarns, if those 
fabrics are classifiable under heading 5602 or 5603 of the HTSUS and are 
wholly formed and cut in the United States) that are entered under 
Chapter 61 or 62 of the HTSUS, if, after that assembly, the articles 
would have qualified for entry under subheading 9802.00.80 of the HTSUS 
but for the fact that the articles were embroidered or subjected to 
stone-washing, enzyme-washing, acid washing, perma-pressing, oven-
baking, bleaching, garment-dyeing, screen printing, or other similar 
processes in a beneficiary country;
    (3) Apparel articles sewn or otherwise assembled in one or more 
beneficiary countries with thread formed in the United States from 
fabrics wholly formed in the United States and cut in one or more 
beneficiary countries from yarns wholly formed in the United States, or 
from components knit-to-shape in the United States from yarns wholly 
formed in the United States, or both (including fabrics not formed from 
yarns, if those fabrics are classifiable under heading 5602 or 5603 of 
the HTSUS and are wholly formed in the United States).
    (4) Apparel articles wholly assembled in one or more beneficiary 
countries from fabric wholly formed in one or more beneficiary countries 
from yarns originating either in the United States or one or more 
beneficiary countries (including fabrics not formed from yarns, if those 
fabrics are classified under heading 5602 or 5603 of the HTSUS and are 
wholly formed in one or more beneficiary countries), or from components 
knit-to-shape in one or more beneficiary countries from yarns 
originating either in the United States or in one or more beneficiary 
countries, or apparel articles wholly formed on seamless knitting 
machines in a beneficiary country from yarns originating either in the 
United States or in one or more beneficiary countries, subject to the 
applicable quantitative limit published in the Federal Register pursuant 
to U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS;
    (5) Apparel articles wholly assembled, or knit-to-shape and wholly 
assembled, or both, in one or more lesser developed beneficiary 
countries regardless of the country of origin of the fabric or the yarn 
used to make the articles, subject to the applicable quantitative limit 
published in the Federal Register pursuant to U.S. Note 2, Subchapter 
XIX, Chapter 98, HTSUS;
    (6) Sweaters, in chief weight of cashmere, knit-to-shape in one or 
more beneficiary countries and classifiable under subheading 6110.10 of 
the HTSUS;
    (7) Sweaters, containing 50 percent or more by weight of wool 
measuring 21.5 microns in diameter or finer, knit-to-shape in one or 
more beneficiary countries;
    (8) Apparel articles, other than brassieres classifiable under 
subheading 6212.10, HTSUS, that are both cut (or knit-to-shape) and sewn 
or otherwise assembled in one or more beneficiary countries, from 
fabrics or yarn that is not formed in the United States or a beneficiary 
country, provided that apparel articles of those fabrics or yarn would 
be considered an originating good under General Note 12(t), HTSUS, if 
the apparel articles had been imported directly from Canada or Mexico;
    (9) Apparel articles that are both cut (or knit-to-shape) and sewn 
or otherwise assembled in one or more beneficiary countries from fabrics 
or yarn that the President or his designee has designated in the Federal 
Register as not available in commercial quantities in the United States;
    (10) A handloomed, handmade, or folklore article of a beneficiary 
country or countries that is certified as a handloomed, handmade, or 
folklore article by the competent authority of the beneficiary country 
or countries, provided that the President or his designee has determined 
that the article in question will be treated as being a handloomed, 
handmade, or folklore article.

[[Page 176]]

    (11) Apparel articles sewn or otherwise assembled in one or more 
beneficiary countries with thread formed in the United States:
    (i) From components cut in the United States and in one or more 
beneficiary countries from fabric wholly formed in the United States 
from yarns wholly formed in the United States (including fabrics not 
formed from yarns, if those fabrics are classifiable under heading 5602 
or 5603 of the HTSUS);
    (ii) From components knit-to-shape in the United States and one or 
more beneficiary countries from yarns wholly formed in the United 
States; or
    (iii) From any combination of two or more of the cutting or 
knitting-to-shape operations described in paragraph (a)(11)(i) or 
paragraph (a)(11)(ii) of this section.
    (b) Special rules for certain component materials--(1) General. An 
article otherwise described under paragraph (a) of this section will not 
be ineligible for the preferential treatment referred to in Sec. 10.211 
because the article contains:
    (i) Findings and trimmings of foreign origin, if the value of those 
findings and trimmings does not exceed 25 percent of the cost of the 
components of the assembled article. For purposes of this section 
``findings and trimmings'' include, but are not limited to, hooks and 
eyes, snaps, buttons, ``bow buds,'' decorative lace trim, elastic strips 
(but only if they are each less than 1 inch in width and are used in the 
production of brassieres), zippers (including zipper tapes), labels, and 
sewing thread except in the case of an article described in paragraph 
(a)(3) of this section;
    (ii) Interlinings of foreign origin, if the value of those 
interlinings does not exceed 25 percent of the cost of the components of 
the assembled article. For purposes of this section ``interlinings'' 
include only a chest type plate, a ``hymo'' piece, or ``sleeve header,'' 
of woven or weft-inserted warp knit construction and of coarse animal 
hair or man-made filaments;
    (iii) Any combination of findings and trimmings of foreign origin 
and interlinings of foreign origin, if the total value of those findings 
and trimmings and interlinings does not exceed 25 percent of the cost of 
the components of the assembled article; or
    (iv) Fibers or yarns not wholly formed in the United States or one 
or more beneficiary countries if the total weight of all those fibers 
and yarns is not more than 7 percent of the total weight of the article.
    (2) ``Cost''and ``value'' defined. The ``cost'' of components and 
the ``value'' of findings and trimmings or interlinings referred to in 
paragraph (b)(1) of this section means:
    (i) The price of the components, findings and trimmings, or 
interlinings when last purchased, f.o.b. port of exportation, as set out 
in the invoice or other commercial documents, or, if the price is other 
than f.o.b. port of exportation:
    (A) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price; or
    (B) If no exportation to a beneficiary country is involved, the 
price as set out in the invoice or other commercial documents, less the 
freight, insurance, packing and other costs incurred in transporting the 
components, findings and trimmings, or interlinings to the place of 
production if included in that price; or
    (ii) If the price cannot be determined under paragraph (b)(2)(i) of 
this section or if Customs finds that price to be unreasonable, all 
reasonable expenses incurred in the growth, production, manufacture, or 
other processing of the components, findings and trimmings, or 
interlinings, including the cost or value of materials and general 
expenses, plus a reasonable amount for profit, and the freight, 
insurance, packing, and other costs, if any, incurred in transporting 
the components, findings and trimmings, or interlinings to the port of 
exportation.
    (3) Treatment of fibers and yarns as findings or trimmings. If any 
fibers or yarns not wholly formed in the United States or one or more 
beneficiary countries are used in an article as a finding or trimming 
described in paragraph (b)(1)(i) of this section, the fibers or yarns 
will be considered to be a finding or trimming for purposes of paragraph 
(b)(1) of this section.
    (c) Imported directly defined. For purposes of paragraph (a) of this 
section, the words ``imported directly'' mean:

[[Page 177]]

    (1) Direct shipment from any beneficiary country to the United 
States without passing through the territory of any non-beneficiary 
country;
    (2) If the shipment is from any beneficiary country to the United 
States through the territory of any non-beneficiary country, the 
articles in the shipment do not enter into the commerce of any non-
beneficiary country while en route to the United States and the 
invoices, bills of lading, and other shipping documents show the United 
States as the final destination; or
    (3) If the shipment is from any beneficiary country to the United 
States through the territory of any non-beneficiary country, and the 
invoices and other documents do not show the United States as the final 
destination, the articles in the shipment upon arrival in the United 
States are imported directly only if they:
    (i) Remained under the control of the customs authority of the 
intermediate country;
    (ii) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
producer's sales agent; and
    (iii) Were not subjected to operations other than loading or 
unloading, and other activities necessary to preserve the articles in 
good condition.

[T.D. 00-67, 65 FR 59676, Oct. 5, 2000; 65 FR 67260, Nov. 9, 2000, as 
amended by T.D. 03-15, 68 FR 13824, Mar. 21, 2003]



Sec. 10.214  Certificate of Origin.

    (a) General. A Certificate of Origin must be employed to certify 
that a textile or apparel article being exported from a beneficiary 
country to the United States qualifies for the preferential treatment 
referred to in Sec. 10.211. The Certificate of Origin must be prepared 
by the exporter in the beneficiary country in the form specified in 
paragraph (b) of this section. Where the beneficiary country exporter is 
not the producer of the article, that exporter may complete and sign a 
Certificate of Origin on the basis of:
    (1) Its reasonable reliance on the producer's written representation 
that the article qualifies for preferential treatment; or
    (2) A completed and signed Certificate of Origin for the article 
voluntarily provided to the exporter by the producer.
    (b) Form of Certificate. The Certificate of Origin referred to in 
paragraph (a) of this section must be in the following format:

[[Page 178]]

[GRAPHIC] [TIFF OMITTED] TR21MR03.001

    (c) Preparation of Certificate. The following rules will apply for 
purposes of completing the Certificate of Origin set forth in paragraph 
(b) of this section:
    (1) Blocks 1 through 5 pertain only to the final article exported to 
the United States for which preferential treatment may be claimed;
    (2) Block 1 should state the legal name and address (including 
country) of the exporter;
    (3) Block 2 should state the legal name and address (including 
country)

[[Page 179]]

of the producer. If there is more than one producer, attach a list 
stating the legal name and address (including country) of all additional 
producers. If this information is confidential, it is acceptable to 
state ``available to Customs upon request'' in block 2. If the producer 
and the exporter are the same, state ``same'' in block 2;
    (4) Block 3 should state the legal name and address (including 
country) of the importer;
    (5) In block 4, insert the number and/or letter that identifies the 
preference group which applies to the article according to the 
description contained in the CFR provision cited on the Certificate for 
that group;
    (6) Block 5 should provide a full description of each article. The 
description should be sufficient to relate it to the invoice description 
and to the description of the article in the international Harmonized 
System. Include the invoice number as shown on the commercial invoice 
or, if the invoice number is not known, include another unique reference 
number such as the shipping order number;
    (7) Blocks 6 through 10 must be completed only when the block in 
question calls for information that is relevant to the preference group 
identified in block 4;
    (8) Block 6 should state the legal name and address (including 
country) of the fabric producer;
    (9) Block 7 should state the legal name and address (including 
country) of the yarn producer;
    (10) Block 8 should state the legal name and address (including 
country) of the thread producer;
    (11) Block 9 should state the name of the folklore article or should 
state that the article is handloomed or handmade;
    (12) Block 10 should be completed only when the preference group 
identifier ``8'' and/or ``H'' is inserted in block 4 and should state 
the name of the fabric or yarn that is in short supply in the NAFTA or 
that has been designated as not available in commercial quantities in 
the United States;
    (13) Block 11 must contain the signature of the exporter or of the 
exporter's authorized agent having knowledge of the relevant facts;
    (14) Block 15 should reflect the date on which the Certificate was 
completed and signed;
    (15) Block 16 should be completed if the Certificate is intended to 
cover multiple shipments of identical articles as described in block 5 
that are imported into the United States during a specified period of up 
to one year (see Sec. 10.216(b)(4)(ii)). The ``from'' date is the date 
on which the Certificate became applicable to the article covered by the 
blanket Certificate (this date may be prior to the date reflected in 
block 15). The ``to'' date is the date on which the blanket period 
expires;
    (16) The telephone and facsimile numbers included in block 17 should 
be those at which the person who signed the Certificate may be 
contacted; and
    (17) The Certificate may be printed and reproduced locally. If more 
space is needed to complete the Certificate, attach a continuation 
sheet.

[T.D. 00-67, 65 FR 59676, Oct. 5, 2000, as amended by T.D. 03-15, 68 FR 
13825, Mar. 21, 2003]



Sec. 10.215  Filing of claim for preferential treatment.

    (a) Declaration. In connection with a claim for preferential 
treatment for a textile or apparel article described in Sec. 10.213, 
the importer must make a written declaration that the article qualifies 
for that treatment. The inclusion on the entry summary, or equivalent 
documentation, of the subheading within Chapter 98 of the HTSUS under 
which the article is classified will constitute the written declaration. 
Except in any of the circumstances described in Sec. 10.216(d)(1), the 
declaration required under this paragraph must be based on an original 
Certificate of Origin that has been completed and properly executed in 
accordance with Sec. 10.214, that covers the article being imported, 
and that is in the possession of the importer.
    (b) Corrected declaration. If, after making the declaration required 
under paragraph (a) of this section, the importer has reason to believe 
that a Certificate of Origin on which a declaration was based contains 
information that is not correct, the importer must within 30 calendar 
days after the date

[[Page 180]]

of discovery of the error make a corrected declaration and pay any 
duties that may be due. A corrected declaration will be effected by 
submission of a letter or other written statement to the Customs port 
where the declaration was originally filed.

[T.D. 00-67, 65 FR 59676, Oct. 5, 2000, as amended by T.D. 03-15, 68 FR 
13827, Mar. 21, 2003]



Sec. 10.216  Maintenance of records and submission of Certificate by 
importer.

    (a) Maintenance of records. Each importer claiming preferential 
treatment for an article under Sec. 10.215 must maintain in the United 
States, in accordance with the provisions of part 163 of this chapter, 
all records relating to the importation of the article. Those records 
must include the original Certificate of Origin referred to in Sec. 
10.215(a) and any other relevant documents or other records as specified 
in Sec. 163.1(a) of this chapter.
    (b) Submission of Certificate. An importer who claims preferential 
treatment on a textile or apparel article under Sec. 10.215(a) must 
provide, at the request of the port director, a copy of the Certificate 
of Origin pertaining to the article. A Certificate of Origin submitted 
to Customs under this paragraph:
    (1) Must be in writing or must be transmitted electronically 
pursuant to any electronic data interchange system authorized by Customs 
for that purpose;
    (2) Must be signed by the exporter or by the exporter's authorized 
agent having knowledge of the relevant facts;
    (3) Must be completed either in the English language or in the 
language of the country from which the article is exported. If the 
Certificate is completed in a language other than English, the importer 
must provide to Customs upon request a written English translation of 
the Certificate; and
    (4) May be applicable to:
    (i) A single importation of an article 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 articles into the United 
States that occur within a specified blanket period, not to exceed 12 
months, set out in the Certificate by the exporter. For purposes of this 
paragraph and Sec. 10.214(c)(15), ``identical articles'' means articles 
that are the same in all material respects, including physical 
characteristics, quality, and reputation.
    (c) Correction and nonacceptance of Certificate. If the port 
director determines that a Certificate of Origin is illegible or 
defective or has not been completed in accordance with paragraph (b) of 
this section, the importer will be given a period of not less than five 
working days to submit a corrected Certificate. A Certificate will not 
be accepted in connection with subsequent importations during a period 
referred to in paragraph (b)(4)(ii) of this section if the port director 
determined that a previously imported identical article covered by the 
Certificate did not qualify for preferential treatment.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer is not 
required to have a Certificate of Origin in his possession for:
    (i) An importation of an article 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 article qualifies for 
preferential treatment;
    (ii) A non-commercial importation of an article; or
    (iii) A commercial importation of an article whose value 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 article covered by this shipment qualifies 
for preferential treatment under the AGOA.

Check One:
    ( ) Producer
    ( ) Exporter
    ( ) Importer
    ( ) Agent


[[Page 181]]


________________________________________________________________________
Name
________________________________________________________________________
Title
________________________________________________________________________
Address
________________________________________________________________________
Signature and Date

    (2) Exception. If the port director determines that an importation 
described 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 Certificate of Origin 
requirement under Sec. Sec. 10.214 through 10.216, the port director 
will 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 treatment. The importer will have 30 
calendar days from the date of the written notice to obtain a valid 
Certificate of Origin, and a failure to timely obtain the Certificate of 
Origin will result in denial of the claim for preferential treatment. 
For purposes of this paragraph, a ``series of importations'' means two 
or more entries covering articles arriving on the same day from the same 
exporter and consigned to the same person.

[T.D. 00-67, 65 FR 59676, Oct. 5, 2000, as amended by T.D. 03-15, 68 FR 
13827, Mar. 21, 2003]



Sec. 10.217  Verification and justification of claim for preferential 
treatment.

    (a) Verification by Customs. A claim for preferential treatment made 
under Sec. 10.215, including any statements or other information 
contained on a Certificate of Origin submitted to Customs under Sec. 
10.216, will be subject to whatever verification the port director deems 
necessary. In the event that the port director for any reason is 
prevented from verifying the claim, the port director may deny the claim 
for preferential treatment. A verification of a claim for preferential 
treatment may involve, but need not be limited to, a review of:
    (1) All records required to be made, kept, and made available to 
Customs by the importer or any other person under part 163 of this 
chapter;
    (2) Documentation and other information regarding the country of 
origin of an article and its constituent materials, including, but not 
limited to, production records, information relating to the place of 
production, the number and identification of the types of machinery used 
in production, and the number of workers employed in production; and
    (3) Evidence to document the use of U.S. materials in the production 
of the article in question, such as purchase orders, invoices, bills of 
lading and other shipping documents, and customs import and clearance 
documents.
    (b) Importer requirements. In order to make a claim for preferential 
treatment under Sec. 10.215, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the textile or apparel article qualifies for 
preferential treatment. Those records must include documents that 
support a claim that the article in question qualifies for preferential 
treatment because it is specifically described in one of the provisions 
under Sec. 10.213(a). If the importer is claiming that the article 
incorporates fabric or yarn that originated or was wholly formed in the 
United States, the importer must have records that identify the U.S. 
producer of the fabric or yarn. A properly completed Certificate of 
Origin in the form set forth in Sec. 10.214(b) is a record that would 
serve these purposes;
    (2) Must establish and implement internal controls which provide for 
the periodic review of the accuracy of the Certificate of Origin or 
other records referred to in paragraph (b)(1) of this section;
    (3) Must have shipping papers that show how the article moved from 
the beneficiary country to the United States. If the imported article 
was shipped through a country other than a beneficiary country and the 
invoices and other documents from the beneficiary country do not show 
the United States as the final destination, the importer also must have 
documentation that demonstrates that the conditions set forth in Sec. 
10.213(c)(3) (i) through (iii) were met; and
    (4) Must be prepared to explain, upon request from Customs, how the 
records and internal controls referred to in paragraphs (b)(1) through 
(b)(3) of this

[[Page 182]]

section justify the importer's claim for preferential treatment.

[T.D. 00-67, 65 FR 59676, Oct. 5, 2000, as amended by T.D. 03-15, 68 FR 
13827, Mar. 21, 2003]



      Subpart E_United States-Caribbean Basin Trade Partnership Act

  Textile and Apparel Articles Under the United States-Caribbean Basin 
                          Trade Partnership Act

    Source: T.D. 00-68, 65 FR 59658, Oct. 5, 2000, unless otherwise 
noted.



Sec. 10.221  Applicability.

    Title II of Public Law 106-200 (114 Stat. 251), entitled the United 
States-Caribbean Basin Trade Partnership Act (CBTPA), amended section 
213(b) of the Caribbean Basin Economic Recovery Act (the CBERA, 19 
U.S.C. 2701-2707) to authorize the President to extend additional trade 
benefits to countries that have been designated as beneficiary countries 
under the CBERA. Section 213(b)(2) of the CBERA (19 U.S.C. 2703(b)(2)) 
provides for the preferential treatment of certain textile and apparel 
articles from CBERA beneficiary countries. The provisions of Sec. Sec. 
10.221-10.227 of this part set forth the legal requirements and 
procedures that apply for purposes of obtaining preferential treatment 
pursuant to CBERA section 213(b)(2).

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000; 65 FR 67262, Nov. 9, 2000]



Sec. 10.222  Definitions.

    When used in Sec. Sec. 10.221 through 10.228, the following terms 
have the meanings indicated:
    Apparel articles. ``Apparel articles'' means goods classifiable in 
Chapters 61 and 62 and headings 6501, 6502, 6503, and 6504 and 
subheadings 6406.99 and 6505.90 of the HTSUS.
    Assembled in one or more CBTPA beneficiary countries. ``Assembled in 
one or more CBTPA beneficiary countries'' when used in the context of a 
textile or apparel article has reference to a joining together of two or 
more components that occurred in one or more CBTPA beneficiary 
countries, whether or not a prior joining operation was performed on the 
article or any of its components in the United States.
    CBERA. ``CBERA'' means the Caribbean Basin Economic Recovery Act, 19 
U.S.C. 2701-2707.
    CBTPA beneficiary country. ``CBTPA beneficiary country'' means a 
``beneficiary country'' as defined in Sec. 10.191(b)(1) for purposes of 
the CBERA which the President also has designated as a beneficiary 
country for purposes of preferential treatment of textile and apparel 
articles under 19 U.S.C. 2703(b)(2) and which has been the subject of a 
finding by the President or his designee, published in the Federal 
Register, that the beneficiary country has satisfied the requirements of 
19 U.S.C. 2703(b)(4)(A)(ii).
    Cut in one or more CBTPA beneficiary countries. ``Cut in one or more 
CBTPA beneficiary countries'' when used with reference to apparel 
articles means that all fabric components used in the assembly of the 
article were cut from fabric in one or more CBTPA beneficiary countries.
    Foreign. ``Foreign'' means of a country other than the United States 
or a CBTPA beneficiary country.
    HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United 
States.
    Knit-to-shape. The term ``knit-to-shape'' applies to any apparel 
article of which 50 percent or more of the exterior surface area is 
formed by major parts that have been knitted or crocheted directly to 
the shape used in the apparel article, with no consideration being given 
to patch pockets, appliques, or the like. Minor cutting, trimming, or 
sewing of those major parts will not affect the determination of whether 
an apparel article is ``knit-to-shape.''
    Luggage. ``Luggage'' means travel goods (such as trunks, hand 
trunks, lockers, valises, satchels, suitcases, wardrobe cases, overnight 
bags, pullman bags, gladstone bags, traveling bags, knapsacks, kitbags, 
haversacks, duffle bags, and like articles designed to contain clothing 
or other personal effects during travel) and brief cases, portfolios, 
school bags, photographic equipment bags, golf bags, camera

[[Page 183]]

cases, binocular cases, gun cases, occupational luggage cases (for 
example, physicians' cases, sample cases), and like containers and cases 
designed to be carried with the person. The term ``luggage'' does not 
include handbags (that is, pocketbooks, purses, shoulder bags, clutch 
bags, and all similar articles, by whatever name known, customarily 
carried by women or girls). The term ``luggage'' also does not include 
flat goods (that is, small flatware designed to be carried on the 
person, such as banknote cases, bill cases, billfolds, bill purses, bill 
rolls, card cases, change cases, cigarette cases, coin purses, coin 
holders, compacts, currency cases, key cases, letter cases, license 
cases, money cases, pass cases, passport cases, powder cases, spectacle 
cases, stamp cases, vanity cases, tobacco pouches, and similar 
articles).
    Made in one or more CBTPA beneficiary countries. ``Made in one or 
more CBTPA beneficiary countries'' when used with reference to non-
underwear t-shirts means cut in one or more CBTPA beneficiary countries 
and wholly assembled in one or more CBTPA beneficiary countries.
    Major parts. ``Major parts'' means integral components of an apparel 
article but does not include collars, cuffs, waistbands, plackets, 
pockets, linings, paddings, trim, accessories, or similar parts or 
components.
    NAFTA. ``NAFTA'' means the North American Free Trade Agreement 
entered into by the United States, Canada, and Mexico on December 17, 
1992.
    Preferential treatment. ``Preferential treatment'' means entry, or 
withdrawal from warehouse for consumption, in the customs territory of 
the United States free of duty and free of any quantitative 
restrictions, limitations, or consultation levels as provided in 19 
U.S.C. 2703(b)(2).
    Wholly assembled in one or more CBTPA beneficiary countries. 
``Wholly assembled in one or more CBTPA beneficiary countries'' when 
used in the context of a textile or apparel article has reference to a 
joining together of all components (including thread, decorative 
embellishments, buttons, zippers, or similar components) that occurred 
only in one or more CBTPA beneficiary countries.
    Wholly formed. ``Wholly formed,'' when used with reference to yarns, 
means that all of the production processes, starting with the extrusion 
of filament, strip, film, or sheet and including slitting a film or 
sheet into strip or the spinning of all fibers into yarn or both and 
ending with a yarn or plied yarn, took place in a single country, and, 
when used with reference to fabric(s), means that all of the production 
processes, starting with polymers, fibers, filaments, textile strips, 
yarns, twine, cordage, rope, or strips of fabric and ending with a 
fabric by a weaving, knitting, needling, tufting, felting, entangling or 
other process, took place in a single country.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000; 65 FR 67262, Nov. 9, 2000; T.D. 
01-74, 66 FR 50537, Oct. 4, 2001, as amended by T.D. 03-12, 68 FR 13831, 
Mar. 21, 2003]



Sec. 10.223  Articles eligible for preferential treatment.

    (a) General. The preferential treatment referred to in Sec. 10.221 
applies to the following textile and apparel articles that are imported 
directly into the customs territory of the United States from a CBTPA 
beneficiary country:
    (1) Apparel articles sewn or otherwise assembled in one or more 
CBTPA beneficiary countries from fabrics wholly formed and cut, or from 
components knit-to-shape, in the United States, from yarns wholly formed 
in the United States (including fabrics not formed from yarns, if those 
fabrics are classifiable under heading 5602 or 5603 of the HTSUS and are 
wholly formed and cut in the United States) that are entered under 
subheading 9802.00.80 of the HTSUS, and provided that any other 
processing involving the article conforms to the rules set forth in 
paragraph (b) of this section;
    (2) Apparel articles sewn or otherwise assembled in one or more 
CBTPA beneficiary countries from fabrics wholly formed and cut, or from 
components knit-to-shape, in the United States, from yarns wholly formed 
in the United States (including fabrics not formed from yarns, if those 
fabrics are classifiable under heading 5602 or 5603 of the HTSUS and are 
wholly formed and cut in the United States) that are entered under 
Chapter 61 or 62 of the

[[Page 184]]

HTSUS, if, after that assembly, the articles would have qualified for 
entry under subheading 9802.00.80 of the HTSUS but for the fact that the 
articles were embroidered or subjected to stone-washing, enzyme-washing, 
acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, 
screen printing, or other similar processes in a CBTPA beneficiary 
country, and provided that any other processing involving the article 
conforms to the rules set forth in paragraph (b) of this section;
    (3) Apparel articles sewn or otherwise assembled in one or more 
CBTPA beneficiary countries with thread formed in the United States from 
fabrics wholly formed in the United States and cut in one or more CBTPA 
beneficiary countries from yarns wholly formed in the United States, or 
from components knit-to-shape in the United States from yarns wholly 
formed in the United States, or both (including fabrics not formed from 
yarns, if those fabrics are classifiable under heading 5602 or 5603 of 
the HTSUS and are wholly formed in the United States), and provided that 
any other processing involving the article conforms to the rules set 
forth in paragraph (b) of this section;
    (4) Apparel articles (other than socks provided for in heading 6115 
of the HTSUS) knit to shape in a CBTPA beneficiary country from yarns 
wholly formed in the United States, and knitted or crocheted apparel 
articles (other than non-underwear t-shirts classifiable under 
subheadings 6109.10.00 and 6109.90.10 of the HTSUS and described in 
paragraph (a)(5) of this section) cut and wholly assembled in one or 
more CBTPA beneficiary countries from fabrics formed in one or more 
CBTPA beneficiary countries or in one or more CBTPA beneficiary 
countries and the United States from yarns wholly formed in the United 
States (including fabrics not formed from yarns, if those fabrics are 
classifiable under heading 5602 or 5603 of the HTSUS and are formed in 
one or more CBTPA beneficiary countries);
    (5) Non-underwear t-shirts, classifiable under subheadings 
6109.10.00 and 6109.90.10 of the HTSUS, made in one or more CBTPA 
beneficiary countries from fabric formed in one or more CBTPA 
beneficiary countries from yarns wholly formed in the United States;
    (6) Brassieres classifiable under subheading 6212.10 of the HTSUS, 
if both cut and sewn or otherwise assembled in the United States, or in 
one or more CBTPA beneficiary countries, or in both, other than articles 
entered as articles described in paragraphs (a)(1) through (a)(5), 
paragraphs (a)(7) through (a)(9), or paragraph (a)(12), and provided 
that any applicable additional requirements set forth in Sec. 10.228 
are met;
    (7) Apparel articles, other than articles described in paragraph 
(a)(6) of this section, that are both cut (or knit-to-shape) and sewn or 
otherwise assembled in one or more CBTPA beneficiary countries, from 
fabrics or yarn that is not formed in the United States or in one or 
more CBTPA beneficiary countries, to the extent that apparel articles of 
those fabrics or yarn would be eligible for preferential treatment, 
without regard to the source of the fabrics or yarn, under Annex 401 of 
the NAFTA;
    (8) Apparel articles that are both cut (or knit-to-shape) and sewn 
or otherwise assembled in one or more CBTPA beneficiary countries from 
fabrics or yarn that the President or his designee has designated in the 
Federal Register as not available in commercial quantities in the United 
States;
    (9) A handloomed, handmade, or folklore textile or apparel article 
of a CBTPA beneficiary country that the President or his designee and 
representatives of the CBTPA beneficiary country mutually agree is a 
handloomed, handmade, or folklore article and that is certified as a 
handloomed, handmade, or folklore article by the competent authority of 
the CBTPA beneficiary country;
    (10) Textile luggage assembled in a CBTPA beneficiary country from 
fabric wholly formed and cut in the United States, from yarns wholly 
formed in the United States, that is entered under subheading 9802.00.80 
of the HTSUS;
    (11) Textile luggage assembled in a CBTPA beneficiary country from 
fabric cut in a CBTPA beneficiary country

[[Page 185]]

from fabric wholly formed in the United States from yarns wholly formed 
in the United States;
    (12) Knitted or crocheted apparel articles cut and assembled in one 
or more CBTPA beneficiary countries from fabrics wholly formed in the 
United States from yarns wholly formed in the United States, or from 
components knit-to-shape in the United States from yarns wholly formed 
in the United States, or both (including fabrics not formed from yarns, 
if those fabrics are classifiable under heading 5602 or 5603 of the 
HTSUS and are formed wholly in the United States), provided that the 
assembly is with thread formed in the United States, and provided that 
any other processing involving the article conforms to the rules set 
forth in paragraph (b) of this section; and
    (13) Apparel articles sewn or otherwise assembled in one or more 
CBTPA beneficiary countries with thread formed in the United States:
    (i) From components cut in the United States and in one or more 
CBTPA beneficiary countries from fabric wholly formed in the United 
States from yarns wholly formed in the United States (including fabrics 
not formed from yarns, if those fabrics are classifiable under heading 
5602 or 5603 of the HTSUS);
    (ii) From components knit-to-shape in the United States and one or 
more CBTPA beneficiary countries from yarns wholly formed in the United 
States; or
    (iii) From any combination of two or more of the cutting or 
knitting-to-shape operations described in paragraph (a)(13)(i) or 
paragraph (a)(13)(ii) of this section; and
    (iv) Provided that any processing not described in this paragraph 
(a)(13) conforms to the rules set forth in paragraph (b) of this 
section.
    (b) Dyeing, printing, finishing and other operations--(1) Dyeing, 
printing and finishing operations. Dyeing, printing, and finishing 
operations may be performed on any yarn, fabric, or knit-to-shape or 
other component used in the production of any article described under 
paragraph (a) of this section without affecting the eligibility of the 
article for preferential treatment, provided that the operation is 
performed in the United States or in a CBTPA beneficiary country and not 
in any other country and subject to the following additional conditions:
    (i) In the case of an article described in paragraph (a)(1), (a)(2), 
(a)(3), (a)(12), or (a)(13) of this section that is entered on or after 
September 1, 2002, and that contains a knitted or crocheted or woven 
fabric, or a knitted or crocheted or woven fabric component produced 
from fabric, that was wholly formed in the United States from yarns 
wholly formed in the United States, any dyeing, printing, or finishing 
of that knitted or crocheted or woven fabric or component must have been 
carried out in the United States; and
    (ii) In the case of assembled luggage described in paragraph (a)(10) 
of this section, an operation may be performed in a CBTPA beneficiary 
country only if that operation is incidental to the assembly process 
within the meaning of Sec. 10.16.
    (2) Other operations. An article described under paragraph (a) of 
this section that is otherwise eligible for preferential treatment will 
not be disqualified from receiving that treatment by virtue of having 
undergone one or more operations such as embroidering, stone-washing, 
enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, 
garment-dyeing or screen printing, provided that the operation is 
performed in the United States or in a CBTPA beneficiary country and not 
in any other country. However, in the case of assembled luggage 
described in paragraph (a)(10) of this section, an operation may be 
performed in a CBTPA beneficiary country without affecting the 
eligibility of the article for preferential treatment only if it is 
incidental to the assembly process within the meaning of Sec. 10.16.
    (c) Special rules for certain component materials--(1) Foreign 
findings, trimmings, interlinings, fibers and yarns--(i) General. An 
article otherwise described under paragraph (a) of this section will not 
be ineligible for the preferential treatment referred to in Sec. 10.221 
because the article contains:
    (A) Findings and trimmings of foreign origin, if the value of those 
findings and trimmings does not exceed 25

[[Page 186]]

percent of the cost of the components of the assembled article. For 
purposes of this section ``findings and trimmings'' include, but are not 
limited to, hooks and eyes, snaps, buttons, ``bow buds,'' decorative 
lace trim, elastic strips (but only if they are each less than 1 inch in 
width and are used in the production of brassieres), zippers (including 
zipper tapes), labels, and sewing thread except in the case of an 
article described in paragraph (a)(3) or (a)(12) of this section;
    (B) Interlinings of foreign origin, if the value of those 
interlinings does not exceed 25 percent of the cost of the components of 
the assembled article. For purposes of this section ``interlinings'' 
include only a chest type plate, a ``hymo'' piece, or ``sleeve header,'' 
of woven or weft-inserted warp knit construction and of coarse animal 
hair or man-made filaments;
    (C) Any combination of findings and trimmings of foreign origin and 
interlinings of foreign origin, if the total value of those findings and 
trimmings and interlinings does not exceed 25 percent of the cost of the 
components of the assembled article; or
    (D) Fibers or yarns not wholly formed in the United States or in one 
or more CBTPA beneficiary countries if the total weight of all those 
fibers and yarns is not more than 7 percent of the total weight of the 
article, except in the case of any apparel article described in 
paragraph (a)(1) through (a)(5) or (a)(12) of this section containing 
elastomeric yarns which will be eligible for preferential treatment only 
if those yarns are wholly formed in the United States.
    (ii) ``Cost'' and ``value'' defined. The ``cost'' of components and 
the ``value'' of findings and trimmings or interlinings referred to in 
paragraph (c)(1)(i) of this section means:
    (A) The price of the components, findings and trimmings, or 
interlinings when last purchased, f.o.b. port of exportation, as set out 
in the invoice or other commercial documents, or, if the price is other 
than f.o.b. port of exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price; or
    (2) If no exportation to a CBTPA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the freight, insurance, packing, and other costs incurred in 
transporting the components, findings and trimmings, or interlinings to 
the place of production if included in that price; or
    (B) If the price cannot be determined under paragraph (c)(1)(ii)(A) 
of this section or if Customs finds that price to be unreasonable, all 
reasonable expenses incurred in the growth, production, manufacture, or 
other processing of the components, findings and trimmings, or 
interlinings, including the cost or value of materials and general 
expenses, plus a reasonable amount for profit, and the freight, 
insurance, packing, and other costs, if any, incurred in transporting 
the components, findings and trimmings, or interlinings to the port of 
exportation.
    (iii) Treatment of fibers and yarns as findings or trimmings. If any 
fibers or yarns not wholly formed in the United States or one or more 
beneficiary countries are used in an article as a finding or trimming 
described in paragraph (c)(1)(i)(A) of this section, the fibers or yarns 
will be considered to be a finding or trimming for purposes of paragraph 
(c)(1)(i) of this section.
    (2) Special rule for nylon filament yarn. An article otherwise 
described under paragraph (a)(1), (a)(2), (a)(3) or (a)(12) of this 
section will not be ineligible for the preferential treatment referred 
to in Sec. 10.221 because the article contains nylon filament yarn 
(other than elastomeric yarn) that is classifiable under subheading 
5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 
5402.41.10, 5402.41.90, 5402.51.00, or 5402.61.00 of the HTSUS duty-free 
from Canada, Mexico or Israel.
    (3) Dyed, printed, or finished thread. An article otherwise 
described under paragraph (a) of this section will not be ineligible for 
the preferential treatment referred to in Sec. 10.221 because the 
thread used to assemble the article is dyed, printed, or finished in one 
or more CBTPA beneficiary countries.
    (d) Imported directly defined. For purposes of paragraph (a) of this 
section, the words ``imported directly'' mean:

[[Page 187]]

    (1) Direct shipment from any CBTPA beneficiary country to the United 
States without passing through the territory of any country that is not 
a CBTPA beneficiary country;
    (2) If the shipment is from any CBTPA beneficiary country to the 
United States through the territory of any country that is not a CBTPA 
beneficiary country, the articles in the shipment do not enter into the 
commerce of any country that is not a CBTPA beneficiary country while en 
route to the United States and the invoices, bills of lading, and other 
shipping documents show the United States as the final destination; or
    (3) If the shipment is from any CBTPA beneficiary country to the 
United States through the territory of any country that is not a CBTPA 
beneficiary country, and the invoices and other documents do not show 
the United States as the final destination, the articles in the shipment 
upon arrival in the United States are imported directly only if they:
    (i) Remained under the control of the customs authority of the 
intermediate country;
    (ii) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
producer's sales agent; and
    (iii) Were not subjected to operations other than loading or 
unloading, and other activities necessary to preserve the articles in 
good condition.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000; 65 FR 67262, Nov. 9, 2000, as 
amended by T.D. 01-74, 66 FR 50537, Oct. 4, 2001; T.D. 03-12, 68 FR 
13832, Mar. 21, 2003]



Sec. 10.224  Certificate of Origin.

    (a) General. A Certificate of Origin must be employed to certify 
that a textile or apparel article being exported from a CBTPA 
beneficiary country to the United States qualifies for the preferential 
treatment referred to in Sec. 10.221. The Certificate of Origin must be 
prepared by the exporter in the CBTPA beneficiary country in the form 
specified in paragraph (b) of this section. Where the CBTPA beneficiary 
country exporter is not the producer of the article, that exporter may 
complete and sign a Certificate of Origin on the basis of:
    (1) Its reasonable reliance on the producer's written representation 
that the article qualifies for preferential treatment; or
    (2) A completed and signed Certificate of Origin for the article 
voluntarily provided to the exporter by the producer.
    (b) Form of Certificate. The Certificate of Origin referred to in 
paragraph (a) of this section must be in the following format:

[[Page 188]]

[GRAPHIC] [TIFF OMITTED] TR21MR03.002

    (c) Preparation of Certificate. The following rules will apply for 
purposes of completing the Certificate of Origin set forth in paragraph 
(b) of this section:
    (1) Blocks 1 through 5 pertain only to the final article exported to 
the United States for which preferential treatment may be claimed;
    (2) Block 1 should state the legal name and address (including 
country) of the exporter;

[[Page 189]]

    (3) Block 2 should state the legal name and address (including 
country) of the producer. If there is more than one producer, attach a 
list stating the legal name and address (including country) of all 
additional producers. If this information is confidential, it is 
acceptable to state ``available to Customs upon request'' in block 2. If 
the producer and the exporter are the same, state ``same'' in block 2;
    (4) Block 3 should state the legal name and address (including 
country) of the importer;
    (5) In block 4, insert the letter that designates the preference 
group which applies to the article according to the description 
contained in the CFR provision cited on the Certificate for that group;
    (6) Block 5 should provide a full description of each article. The 
description should be sufficient to relate it to the invoice description 
and to the description of the article in the international Harmonized 
System. Include the invoice number as shown on the commercial invoice 
or, if the invoice number is not known, include another unique reference 
number such as the shipping order number;
    (7) Blocks 6 through 10 must be completed only when the block in 
question calls for information that is relevant to the preference group 
identified in block 4;
    (8) Block 6 should state the legal name and address (including 
country) of the fabric producer;
    (9) Block 7 should state the legal name and address (including 
country) of the yarn producer;
    (10) Block 8 should state the legal name and address (including 
country) of the thread producer;
    (11) Block 9 should state the name of the folklore article or should 
state that the article is handloomed or handmade of handloomed fabric;
    (12) Block 10 should be completed if the article described in block 
5 incorporates a fabric or yarn described in preference group G and 
should state the name of the fabric or yarn that has been considered as 
being in short supply in the NAFTA or that has been designated as not 
available in commercial quantities in the United States;
    (13) Block 11 must contain the signature of the exporter or of the 
exporter's authorized agent having knowledge of the relevant facts;
    (14) Block 15 should reflect the date on which the Certificate was 
completed and signed;
    (15) Block 16 should be completed if the Certificate is intended to 
cover multiple shipments of identical articles as described in block 5 
that are imported into the United States during a specified period of up 
to one year (see Sec. 10.226(b)(4)(ii)). The ``from'' date is the date 
on which the Certificate became applicable to the article covered by the 
blanket Certificate (this date may be prior to the date reflected in 
block 15). The ``to'' date is the date on which the blanket period 
expires; and
    (16) The Certificate may be printed and reproduced locally. If more 
space is needed to complete the Certificate, attach a continuation 
sheet.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000; 65 FR 67263, Nov. 9, 2000, as 
amended by T.D. 03-12, 68 FR 13833, Mar. 21, 2003]



Sec. 10.225  Filing of claim for preferential treatment.

    (a) Declaration. In connection with a claim for preferential 
treatment for a textile or apparel article described in Sec. 10.223, 
the importer must make a written declaration that the article qualifies 
for that treatment. The inclusion on the entry summary, or equivalent 
documentation, of the subheading within Chapter 98 of the HTSUS under 
which the article is classified will constitute the written declaration. 
Except in any of the circumstances described in Sec. 10.226(d)(1), the 
declaration required under this paragraph must be based on a Certificate 
of Origin that has been completed and properly executed in accordance 
with Sec. 10.224 and that covers the article being imported.
    (b) Corrected declaration. If, after making the declaration required 
under paragraph (a) of this section, the importer has reason to believe 
that a Certificate of Origin on which a declaration was based contains 
information that is not correct, the importer must within 30 calendar 
days after the date of discovery of the error make a corrected 
declaration and pay any duties

[[Page 190]]

that may be due. A corrected declaration will be effected by submission 
of a letter or other written statement to the Customs port where the 
declaration was originally filed.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000; 65 FR 67263, Nov. 9, 2000, as 
amended by T.D. 03-12, 68 FR 13835, Mar. 21, 2003]



Sec. 10.226  Maintenance of records and submission of Certificate by 
importer.

    (a) Maintenance of records. Each importer claiming preferential 
treatment for an article under Sec. 10.225 must maintain in the United 
States, in accordance with the provisions of part 163 of this chapter, 
all records relating to the importation of the article. Those records 
must include the original Certificate of Origin referred to in Sec. 
10.225(a) and any other relevant documents or other records as specified 
in Sec. 163.1(a) of this chapter.
    (b) Submission of Certificate. An importer who claims preferential 
treatment on a textile or apparel article under Sec. 10.225(a) must 
provide, at the request of the port director, a copy of the Certificate 
of Origin pertaining to the article. A Certificate of Origin submitted 
to Customs under this paragraph:
    (1) Must be in writing or must be transmitted electronically 
pursuant to any electronic data interchange system authorized by Customs 
for that purpose;
    (2) Must be signed by the exporter or by the exporter's authorized 
agent having knowledge of the relevant facts;
    (3) Must be completed either in the English language or in the 
language of the country from which the article is exported. If the 
Certificate is completed in a language other than English, the importer 
must provide to Customs upon request a written English translation of 
the Certificate; and
    (4) May be applicable to:
    (i) A single importation of an article 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 articles into the United 
States that occur within a specified blanket period, not to exceed 12 
months, set out in the Certificate by the exporter. For purposes of this 
paragraph and Sec. 10.224(c)(15), ``identical articles'' means articles 
that are the same in all material respects, including physical 
characteristics, quality, and reputation.
    (c) Correction and nonacceptance of Certificate. If the port 
director determines that a Certificate of Origin is illegible or 
defective or has not been completed in accordance with paragraph (b) of 
this section, the importer will be given a period of not less than five 
working days to submit a corrected Certificate. A Certificate will not 
be accepted in connection with subsequent importations during a period 
referred to in paragraph (b)(4)(ii) of this section if the port director 
determined that a previously imported identical article covered by the 
Certificate did not qualify for preferential treatment.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer is not 
required to have a Certificate of Origin in his possession for:
    (i) An importation of an article 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 article qualifies for 
preferential treatment;
    (ii) A non-commercial importation of an article; or
    (iii) A commercial importation of an article whose value 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 article covered by this shipment qualifies 
for preferential treatment under the CBTPA.
    Check One:

( ) Producer
( ) Exporter
( ) Importer
( ) Agent

________________________________________________________________________
Name

________________________________________________________________________

[[Page 191]]

Title

________________________________________________________________________
Address

________________________________________________________________________
Signature and Date

    (2) Exception. If the port director determines that an importation 
described 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 Certificate of Origin 
requirement under Sec. Sec. 10.224 through 10.226, the port director 
will 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 treatment. The importer will have 30 
calendar days from the date of the written notice to obtain a valid 
Certificate of Origin, and a failure to timely obtain the Certificate of 
Origin will result in denial of the claim for preferential treatment. 
For purposes of this paragraph, a ``series of importations'' means two 
or more entries covering articles arriving on the same day from the same 
exporter and consigned to the same person.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000, as amended by T.D. 03-12, 68 FR 
13835, Mar. 21, 2003]



Sec. 10.227  Verification and justification of claim for preferential 
treatment.

    (a) Verification by Customs. A claim for preferential treatment made 
under Sec. 10.225, including any statements or other information 
contained on a Certificate of Origin submitted to Customs under Sec. 
10.226, will be subject to whatever verification the port director deems 
necessary. In the event that the port director for any reason is 
prevented from verifying the claim, the port director may deny the claim 
for preferential treatment. A verification of a claim for preferential 
treatment may involve, but need not be limited to, a review of:
    (1) All records required to be made, kept, and made available to 
Customs by the importer or any other person under part 163 of this 
chapter;
    (2) Documentation and other information regarding the country of 
origin of an article and its constituent materials, including, but not 
limited to, production records, information relating to the place of 
production, the number and identification of the types of machinery used 
in production, and the number of workers employed in production; and
    (3) Evidence to document the use of U.S. materials in the production 
of the article in question, such as purchase orders, invoices, bills of 
lading and other shipping documents, and customs import and clearance 
documents.
    (b) Importer requirements. In order to make a claim for preferential 
treatment under Sec. 10.225, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the textile or apparel article qualifies for 
preferential treatment. Those records must include documents that 
support a claim that the article in question qualifies for preferential 
treatment because it is specifically described in one of the provisions 
under Sec. 10.223(a). If the importer is claiming that the article 
incorporates fabric or yarn that was wholly formed in the United States, 
the importer must have records that identify the U.S. producer of the 
fabric or yarn. A properly completed Certificate of Origin in the form 
set forth in Sec. 10.224(b) is a record that would serve these 
purposes;
    (2) Must establish and implement internal controls which provide for 
the periodic review of the accuracy of the Certificates of Origin or 
other records referred to in paragraph (b)(1) of this section;
    (3) Must have shipping papers that show how the article moved from 
the CBTPA beneficiary country to the United States. If the imported 
article was shipped through a country other than a CBTPA beneficiary 
country and the invoices and other documents from the CBTPA beneficiary 
country do not show the United States as the final destination, the 
importer also must have documentation that demonstrates that the 
conditions set forth in Sec. 10.223(d)(3)(i) through (iii) were met; 
and
    (4) Must be prepared to explain, upon request from Customs, how the 
records and internal controls referred to in paragraphs (b)(1) through 
(b)(3) of this

[[Page 192]]

section justify the importer's claim for preferential treatment.

[T.D. 00-68, 65 FR 59658, Oct. 5, 2000, as amended by T.D. 03-12, 68 FR 
13835, Mar. 21, 2003]



Sec. 10.228  Additional requirements for preferential treatment of 
brassieres.

    (a) Definitions. When used in this section, the following terms have 
the meanings indicated:
    (1) Producer. ``Producer'' means an individual, corporation, 
partnership, association, or other entity or group that exercises 
direct, daily operational control over the production process in a CBTPA 
beneficiary country.
    (2) Entity controlling production. ``Entity controlling production'' 
means an individual, corporation, partnership, association, or other 
entity or group that is not a producer and that controls the production 
process in a CBTPA beneficiary country through a contractual 
relationship or other indirect means.
    (3) Fabrics formed in the United States. ``Fabrics formed in the 
United States'' means fabrics that were produced by a weaving, knitting, 
needling, tufting, felting, entangling or other fabric-making process 
performed in the United States.
    (4) Cost. ``Cost'' when used with reference to fabrics formed in the 
United States means:
    (i) The price of the fabrics when last purchased, f.o.b. port of 
exportation, as set out in the invoice or other commercial documents, 
or, if the price is other than f.o.b. port of exportation:
    (A) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price; or
    (B) If no exportation to a CBTPA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the freight, insurance, packing, and other costs incurred in 
transporting the fabrics to the place of production if included in that 
price; or
    (ii) If the price cannot be determined under paragraph (a)(4)(i) of 
this section or if CBP finds that price to be unreasonable, all 
reasonable expenses incurred in the growth, production, manufacture, or 
other processing of the fabrics, including the cost or value of 
materials (which includes the cost of non-recoverable scrap generated in 
forming the fabrics) and general expenses, plus a reasonable amount for 
profit, and the freight, insurance, packing, and other costs, if any, 
incurred in transporting the fabrics to the port of exportation.
    (5) Declared customs value. ``Declared customs value'' when used 
with reference to fabric contained in an article means the sum of:
    (i) The cost of fabrics formed in the United States that the 
producer or entity controlling production can verify; and
    (ii) The cost of all other fabric contained in the article, 
exclusive of all findings and trimmings, determined as follows:
    (A) In the case of fabric purchased by the producer or entity 
controlling production, the f.o.b. port of exportation price of the 
fabric as set out in the invoice or other commercial documents, or, if 
the price is other than f.o.b. port of exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price, 
plus expenses for embroidering and dyeing, printing, and finishing 
operations applied to the fabric if not included in that price; or
    (2) If no exportation to a CBTPA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, plus 
expenses for embroidering and dyeing, printing, and finishing operations 
applied to the fabric if not included in that price, but less the 
freight, insurance, packing, and other costs incurred in transporting 
the fabric to the place of production if included in that price;
    (B) In the case of fabric for which the cost cannot be determined 
under paragraph (a)(5)(ii)(A) of this section or if CBP finds that cost 
to be unreasonable, all reasonable expenses incurred in the growth, 
production, or manufacture of the fabric, including the cost or value of 
materials (which includes the cost of non-recoverable scrap generated in 
the growth, production, or manufacture of the fabric), general expenses 
and embroidering and dyeing, printing, and

[[Page 193]]

finishing expenses, plus a reasonable amount for profit, and the 
freight, insurance, packing, and other costs, if any, incurred in 
transporting the fabric to the port of exportation;
    (C) In the case of fabric components purchased by the producer or 
entity controlling production, the f.o.b. port of exportation price of 
those fabric components as set out in the invoice or other commercial 
documents, less the cost or value of any non-textile materials, and less 
expenses for cutting or other processing to create the fabric components 
other than knitting to shape, that the producer or entity controlling 
production can verify, or, if the price is other than f.o.b. port of 
exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price, 
less the cost or value of any non-textile materials, and less expenses 
for cutting or other processing to create the fabric components other 
than knitting to shape, that the producer or entity controlling 
production can verify; or
    (2) If no exportation to a CBTPA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the cost or value of any non-textile materials, and less expenses for 
cutting or other processing to create the fabric components other than 
knitting to shape, that the producer or entity controlling production 
can verify, and less the freight, insurance, packing, and other costs 
incurred in transporting the fabric components to the place of 
production if included in that price; and
    (D) In the case of fabric components for which a fabric cost cannot 
be determined under paragraph (a)(5)(ii)(C) of this section or if CBP 
finds that cost to be unreasonable: all reasonable expenses incurred in 
the growth, production, or manufacture of the fabric components, 
including the cost or value of materials (which does not include the 
cost of recoverable scrap generated in the growth, production, or 
manufacture of the fabric components) and general expenses, but 
excluding the cost or value of any non-textile materials, and excluding 
expenses for cutting or other processing to create the fabric components 
other than knitting to shape, that the producer or entity controlling 
production can verify, plus a reasonable amount for profit, and the 
freight, insurance, packing, and other costs, if any, incurred in 
transporting the fabric components to the port of exportation.
    (6) Year. ``Year'' means a 12-month period beginning on October 1 
and ending on September 30 but does not include any 12-month period that 
began prior to October 1, 2000.
    (7) Entered. ``Entered'' means entered, or withdrawn from warehouse 
for consumption, in the customs territory of the United States.
    (b) Limitations on preferential treatment--(1) General. During the 
year that begins on October 1, 2002, and during any subsequent year, 
articles of a producer or an entity controlling production that conform 
to the production standards set forth in Sec. 10.223(a)(6) will be 
eligible for preferential treatment only if:
    (i) The aggregate cost of fabrics (exclusive of all findings and 
trimmings) formed in the United States that were used in the production 
of all of those articles of that producer or that entity controlling 
production that are entered as articles described in Sec. 10.223(a)(6) 
during the immediately preceding year was at least 75 percent of the 
aggregate declared customs value of the fabric (exclusive of all 
findings and trimmings) contained in all of those articles of that 
producer or that entity controlling production that are entered as 
articles described in Sec. 10.223(a)(6) during that year; or
    (ii) In a case in which the 75 percent requirement set forth in 
paragraph (b)(1)(i) of this section was not met during a year and 
therefore those articles of that producer or that entity controlling 
production were not eligible for preferential treatment during the 
following year, the aggregate cost of fabrics (exclusive of all findings 
and trimmings) formed in the United States that were used in the 
production of all of those articles of that producer or that entity 
controlling production that conform to the production standards set 
forth in Sec. 10.223(a)(6) and that were entered during the immediately 
preceding year was at least 85

[[Page 194]]

percent of the aggregate declared customs value of the fabric (exclusive 
of all findings and trimmings) contained in all of those articles of 
that producer or that entity controlling production that conform to the 
production standards set forth in Sec. 10.223(a)(6) and that were 
entered during that year; and
    (iii) In conjunction with the filing of the claim for preferential 
treatment under Sec. 10.225, the importer records on the entry summary 
or warehouse withdrawal for consumption (CBP Form 7501, column 34), or 
its electronic equivalent, the distinct and unique identifier assigned 
by CBP to the applicable documentation prescribed under paragraph (c) of 
this section.
    (2) Rules of application--(i) General. For purposes of paragraphs 
(b)(1)(i) and (b)(1)(ii) of this section and for purposes of preparing 
and filing the documentation prescribed in paragraph (c) of this 
section, the following rules will apply:
    (A) The articles in question must have been produced in the manner 
specified in Sec. 10.223(a)(6) and the articles in question must be 
entered within the same year;
    (B) Articles that are exported to countries other than the United 
States and are never entered are not to be considered in determining 
compliance with the 75 or 85 percent standard specified in paragraph 
(b)(1)(i) or paragraph (b)(1)(ii) of this section;
    (C) Articles that are entered under an HTSUS subheading other than 
the HTSUS subheading which pertains to articles described in Sec. 
10.223(a)(6) are not to be considered in determining compliance with the 
75 percent standard specified in paragraph (b)(1)(i) of this section;
    (D) For purposes of determining compliance with the 85 percent 
standard specified in paragraph (b)(1)(ii) of this section, all articles 
that conform to the production standards set forth in Sec. 10.223(a)(6) 
must be considered, regardless of the HTSUS subheading under which they 
were entered;
    (E) Fabric components and fabrics that constitute findings or 
trimmings are not to be considered in determining compliance with the 75 
or 85 percent standard specified in paragraph (b)(1)(i) or paragraph 
(b)(1)(ii) of this section;
    (F) Beginning October 1, 2002, in order for articles to be eligible 
for preferential treatment in a given year, a producer of, or entity 
controlling production of, those articles must have met the 75 percent 
standard specified in paragraph (b)(1)(i) of this section during the 
immediately preceding year. If articles of a producer or entity 
controlling production fail to meet the 75 percent standard specified in 
paragraph (b)(1)(i) of this section during a year, articles of that 
producer or entity controlling production:
    (1) Will not be eligible for preferential treatment during the 
following year;
    (2) Will remain ineligible for preferential treatment until the year 
that follows a year in which articles of that producer or entity 
controlling production met the 85 percent standard specified in 
paragraph (b)(1)(ii) of this section; and
    (3) After the 85 percent standard specified in paragraph (b)(1)(ii) 
of this section has been met, will again be subject to the 75 percent 
standard specified in paragraph (b)(1)(i) of this section during the 
following year for purposes of determining eligibility for preferential 
treatment in the next year.
    (G) A new producer or new entity controlling production, that is, a 
producer or entity controlling production which did not produce or 
control production of articles that were entered as articles described 
in Sec. 10.223(a)(6) during the immediately preceding year, must first 
establish compliance with the 85 percent standard specified in paragraph 
(b)(1)(ii) of this section as a prerequisite to preparation of the 
declaration of compliance referred to in paragraph (c) of this section;
    (H) A declaration of compliance prepared by a producer or by an 
entity controlling production must cover all production of that producer 
or all production that the entity controls for the year in question;
    (I) A producer is not required to prepare a declaration of 
compliance if all of its production is covered by a declaration of 
compliance prepared by an entity controlling production;

[[Page 195]]

    (J) In the case of a producer, the 75 or 85 percent standard 
specified in paragraph (b)(1)(i) or paragraph (b)(1)(ii) of this section 
and the declaration of compliance procedure under paragraph (c) of this 
section apply to all articles of that producer for the year in question, 
even if some but not all of that production is also covered by a 
declaration of compliance prepared by an entity controlling production;
    (K) The U.S. importer does not have to be the producer or the entity 
controlling production who prepared the declaration of compliance; and
    (L) The exclusion references regarding findings and trimmings in 
paragraph (b)(1)(i) and paragraph (b)(1)(ii) of this section apply to 
all findings and trimmings, whether or not they are of foreign origin.
    (ii) Examples. The following examples will illustrate application of 
the principles set forth in paragraph (b)(2)(i) of this section.

    Example 1. A CBTPA beneficiary country producer of articles that 
meet the production standards specified in Sec. 10.223(a)(6) in the 
first year sends 50 percent of that production to CBTPA region markets 
and the other 50 percent to the U.S. market; the cost of the fabrics 
formed in the United States equals 100 percent of the value of all of 
the fabric in the articles sent to the CBTPA region and 60 percent of 
the value of all of the fabric in the articles sent to the United 
States. Although the cost of fabrics formed in the United States is more 
than 75 percent of the value of all of the fabric used in all of the 
articles produced, this producer could not prepare a valid declaration 
of compliance because the articles sent to the United States did not 
meet the minimum 75 percent standard.
    Example 2. A producer sends to the United States in the first year 
three shipments of articles that meet the description in Sec. 
10.223(a)(6); one of those shipments is entered under the HTSUS 
subheading that covers articles described in Sec. 10.223(a)(6), the 
second shipment is entered under the HTSUS subheading that covers 
articles described in Sec. 10.223(a)(12), and the third shipment is 
entered under subheading 9802.00.80, HTSUS. In determining whether the 
minimum 75 percent standard has been met in the first year for purposes 
of entry of articles under the HTSUS subheading that covers articles 
described in Sec. 10.223(a)(6) during the following (that is, second) 
year, consideration must be restricted to the articles in the first 
shipment and therefore must not include the articles in the second and 
third shipments.
    Example 3. A producer in the second year begins production of 
articles that conform to the production standards specified in Sec. 
10.223(a)(6); some of those articles are entered in that year under 
HTSUS subheading 6212.10 and others under HTSUS subheading 9802.00.80 
but none are entered in that year under the HTSUS subheading which 
pertains to articles described in Sec. 10.223(a)(6) because the 75 
percent standard had not been met in the preceding (that is, first) 
year. In this case the 85 percent standard applies, and all of the 
articles that were entered under the various HTSUS provisions in the 
second year must be taken into account in determining whether that 85 
percent standard has been met. If the 85 percent was met in the 
aggregate for all of the articles entered in the second year, in the 
next (that is, third) year articles of that producer may receive 
preferential treatment under the HTSUS subheading which pertains to 
articles described in Sec. 10.223(a)(6).
    Example 4. An entity controlling production of articles that meet 
the description in Sec. 10.223(a)(6) buys for the U.S., Canadian and 
Mexican markets; the articles in each case are first sent to the United 
States where they are entered for consumption and then placed in a 
commercial warehouse from which they are shipped to various stores in 
the United States, Canada and Mexico. Notwithstanding the fact that some 
of the articles ultimately ended up in Canada or Mexico, a declaration 
of compliance prepared by the entity controlling production must cover 
all of the articles rather than only those that remained in the United 
States because all of those articles had been entered for consumption.
    Example 5. Fabric is cut and sewn in the United States with other 
U.S. materials to form cups which are joined together to form brassiere 
front subassemblies in the United States, and those front subassemblies 
are then placed in a warehouse in the United States where they are held 
until the following year; during that following year all of the front 
subassemblies are shipped to a CBTPA beneficiary country where they are 
assembled with elastic strips and labels produced in an Asian country 
and other fabrics, components or materials produced in the CBTPA 
beneficiary country to form articles that meet the production standards 
specified in Sec. 10.223(a)(6) and that are then shipped to the United 
States and entered during that same year. In determining whether the 
entered articles meet the minimum 75 or 85 percent standard, the fabric 
in the elastic strips and labels is to be disregarded entirely because 
the strips and labels constitute findings or trimmings for purposes of 
this section, and all of the fabric in the front subassemblies is 
countable because it was all formed in the United States and used in the

[[Page 196]]

production of articles that were entered in the same year.
    Example 6. A CBTPA beneficiary country producer's entire production 
of articles that meet the description in Sec. 10.223(a)(6) is sent to a 
U.S. importer in two separate shipments, one in February and the other 
in June of the same calendar year; the articles shipped in February do 
not meet the minimum 75 percent standard, the articles shipped in June 
exceed the 85 percent standard, and the articles in the two shipments, 
taken together, do meet the 75 percent standard; the articles covered by 
the February shipment are entered for consumption on March 1 of that 
calendar year, and the articles covered by the June shipment are placed 
in a CBP bonded warehouse upon arrival and are subsequently withdrawn 
from warehouse for consumption on November 1 of that calendar year. The 
CBTPA beneficiary country producer may not prepare a valid declaration 
of compliance covering the articles in the first shipment because those 
articles did not meet the minimum 75 percent standard and because those 
articles cannot be included with the articles of the second shipment on 
the same declaration of compliance since they were entered in a 
different year. However, the CBTPA beneficiary country producer may 
prepare a valid declaration of compliance covering the articles in the 
second shipment because those articles did meet the requisite 85 percent 
standard which would apply for purposes of entry of articles in the 
following year.
    Example 7. A producer in the second year begins production of 
articles exclusively for the U.S. market that meet the production 
standards specified in Sec. 10.223(a)(6), but the entered articles do 
not meet the requisite 85 percent standard until the third year; the 
entered articles fail to meet the 75 percent standard in the fourth 
year; and the entered articles do not attain the 85 percent standard 
until the sixth year. The producer's articles may not receive 
preferential treatment during the second year because there was no 
production (and thus there were no entered articles) in the immediately 
preceding (that is, first) year on which to assess compliance with the 
75 percent standard. The producer's articles also may not receive 
preferential treatment during the third year because the 85 percent 
standard was not met in the immediately preceding (that is, second) 
year. However, the producer's articles are eligible for preferential 
treatment during the fourth year based on compliance with the 85 percent 
standard in the immediately preceding (that is, third) year. The 
producer's articles may not receive preferential treatment during the 
fifth year because the 75 percent standard was not met in the 
immediately preceding (that is, fourth) year. The producer's articles 
may not receive preferential treatment during the sixth year because the 
85 percent standard has become applicable and was not met in the 
immediately preceding (that is, fifth) year. The producer's articles are 
eligible for preferential treatment during the seventh year because the 
85 percent standard was met in the immediately preceding (that is, 
sixth) year, and during that seventh year the 75 percent standard is 
applicable for purposes of determining whether the producer's articles 
are eligible for preferential treatment in the following (that is, 
eighth) year.
    Example 8. An entity controlling production (Entity A) uses five 
CBTPA beneficiary country producers (Producers 1-5), all of which 
produce only articles that meet the description in Sec. 10.223(a)(6); 
Producers 1-4 send all of their production to the United States and 
Producer 5 sends 10 percent of its production to the United States and 
the rest to Europe; Producers 1-3 and Producer 5 produce only pursuant 
to contracts with Entity A, but Producer 4 also operates independently 
of Entity A by producing for several U.S. importers, one of which is an 
entity controlling production (Entity B) that also controls all of the 
production of articles of one other producer (Producer 6) which sends 
all of its production to the United States. A declaration of compliance 
prepared by Entity A must cover all of the articles of Producers 1-3 and 
the 10 percent of articles of Producer 5 that are sent to the United 
States and that portion of the articles of Producer 4 that are produced 
pursuant to the contract with Entity A, because Entity A controls the 
production of those articles. There is no need for Producers 1-3 and 
Producer 5 to prepare a declaration of compliance because they have no 
production that is not covered by a declaration of compliance prepared 
by an entity controlling production. A declaration of compliance 
prepared by Producer 4 would cover all of its production, that is, 
articles produced for Entity A, articles produced for Entity B, and 
articles produced independently for other U.S. importers; a declaration 
of compliance prepared by Entity B must cover that portion of the 
production of Producer 4 that it controls as well as all of the 
production of Producer 6 because Entity B also controls all of the 
production of Producer 6. Producer 6 would not prepare a declaration of 
compliance because all of its production is covered by the declaration 
of compliance prepared by Entity B.

    (c) Documentation--(1) Initial declaration of compliance. In order 
for an importer to comply with the requirement set forth in paragraph 
(b)(1)(iii) of this section, the producer or the entity controlling 
production must have filed with CBP, in accordance with paragraph (c)(4) 
of this section, a declaration of compliance with the applicable

[[Page 197]]

75 or 85 percent requirement prescribed in paragraph (b)(1)(i) or 
(b)(1)(ii) of this section. After filing of the declaration of 
compliance has been completed, CBP will advise the producer or the 
entity controlling production of the distinct and unique identifier 
assigned to that declaration. The producer or the entity controlling 
production will then be responsible for advising each appropriate U.S. 
importer of that distinct and unique identifier for purposes of 
recording that identifier on the entry summary or warehouse withdrawal. 
In order to provide sufficient time for advising the U.S. importer of 
that distinct and unique identifier prior to the arrival of the articles 
in the United States, the producer or the entity controlling production 
should file the declaration of compliance with CBP at least 10 calendar 
days prior to the date of the first shipment of the articles to the 
United States.
    (2) Amended declaration of compliance. If the information on the 
declaration of compliance referred to in paragraph (c)(1) of this 
section is based on an estimate because final year-end information was 
not available at that time and the final data differs from the estimate, 
or if the producer or the entity controlling production has reason to 
believe for any other reason that the declaration of compliance that was 
filed contained erroneous information, within 30 calendar days after the 
final year-end information becomes available or within 30 calendar days 
after the date of discovery of the error:
    (i) The producer or the entity controlling production must file with 
the CBP office identified in paragraph (c)(4) of this section an amended 
declaration of compliance containing that final year-end information or 
other corrected information; or
    (ii) If that final year-end information or other corrected 
information demonstrates noncompliance with the applicable 75 or 85 
percent requirement, the producer or the entity controlling production 
must in writing advise both the CBP office identified in paragraph 
(c)(4) of this section and each appropriate U.S. importer of that fact.
    (3) Form and preparation of declaration of compliance--(i) Form. The 
declaration of compliance referred to in paragraph (c)(1) of this 
section may be printed and reproduced locally and must be in the 
following format:


   Caribbean Basin Trade Partnership Act Declaration of Compliance for
                               Brassieres
                    [19 CFR 10.223(a)(6) and 10.228]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
1. Year beginning date: October 1,   Official U.S. Customs and Border
 ------.
 Year ending date: September 30,     Protection Use Only
 ------.
                                     Assigned number: ----------
                                     Assignment date: ----------
2. Identity of preparer (producer or entity controlling production):
 Full name and address:              Telephone number: ----------
                                     Facsimile number: ----------
                                     Importer identification number: ----
                                      ------
3. If the preparer is an entity controlling production, provide the
 following for each producer:
 Full name and address:              Telephone number: ----------
                                     Facsimile number: ----------
4. Aggregate cost of fabrics (exclusive of all findings and trimmings)
 formed in the United States that were used in the production of
 brassieres that were entered during the year: ----------
5. Aggregate declared customs value of the fabric (exclusive of all
 findings and trimmings) contained in brassieres that were entered
 during the year: ----------
6. I declare that the aggregate cost of fabric (exclusive of all
 findings and trimmings) formed in the United States was at least 75
 percent (or 85 percent, if applicable under 19 CFR 10.228(b)(1)(ii)) of
 the aggregate declared customs value of the fabric contained in
 brassieres entered during the year.
7. Authorized signature:             8. Name and title (print or type):
------------------
Date:
------------------------------------------------------------------------

    (ii) Preparation. The following rules will apply for purposes of 
completing the declaration of compliance set forth in paragraph 
(c)(3)(i) of this section:

[[Page 198]]

    (A) In block 1, fill in the year commencing October 1 and ending 
September 30 of the calendar year during which the applicable 75 or 85 
percent standard specified in paragraph (b)(1)(i) or paragraph 
(b)(1)(ii) of this section was met;
    (B) Block 2 should state the legal name and address (including 
country) of the preparer and should also include the preparer's importer 
identification number (see Sec. 24.5 of this chapter), if the preparer 
has one;
    (C) Block 3 should state the legal name and address (including 
country) of the CBTPA beneficiary country producer if that producer is 
not already identified in block 2. If there is more than one producer, 
attach a list stating the legal name and address (including country) of 
all additional producers;
    (D) Blocks 4 and 5 apply only to articles that were entered during 
the year identified in block 1; and
    (E) In block 7, the signature must be that of an authorized officer, 
employee, agent or other person having knowledge of the relevant facts 
and the date must be the date on which the declaration of compliance was 
completed and signed.
    (4) Filing of declaration of compliance. The declaration of 
compliance referred to in paragraph (c)(1) of this section:
    (i) Must be completed either in the English language or in the 
language of the country in which the articles covered by the declaration 
were produced. If the declaration is completed in a language other than 
English, the producer or the entity controlling production must provide 
to CBP upon request a written English translation of the declaration; 
and
    (ii) Must be filed with the New York Strategic Trade Center, Customs 
and Border Protection, 1 Penn Plaza, New York, New York 10119.
    (d) Verification of declaration of compliance--(1) Verification 
procedure. A declaration of compliance filed under this section will be 
subject to whatever verification CBP deems necessary. In the event that 
CBP for any reason is prevented from verifying the statements made on a 
declaration of compliance, CBP may deny any claim for preferential 
treatment made under Sec. 10.225 that is based on that declaration. A 
verification of a declaration of compliance may involve, but need not be 
limited to, a review of:
    (i) All records required to be made, kept, and made available to CBP 
by the importer, the producer, the entity controlling production, or any 
other person under part 163 of this chapter;
    (ii) Documentation and other information regarding all articles that 
meet the production standards specified in Sec. 10.223(a)(6) that were 
exported to the United States and that were entered during the year in 
question, whether or not a claim for preferential treatment was made 
under Sec. 10.225. Those records and other information include, but are 
not limited to, work orders and other production records, purchase 
orders, invoices, bills of lading and other shipping documents;
    (iii) Evidence to document the cost of fabrics formed in the United 
States that were used in the production of the articles in question, 
such as purchase orders, invoices, bills of lading and other shipping 
documents, and customs import and clearance documents, work orders and 
other production records, and inventory control records;
    (iv) Evidence to document the cost or value of all fabric other than 
fabrics formed in the United States that were used in the production of 
the articles in question, such as purchase orders, invoices, bills of 
lading and other shipping documents, and customs import and clearance 
documents, work orders and other production records, and inventory 
control records; and
    (v) Accounting books and documents to verify the records and 
information referred to in paragraphs (d)(1)(ii) through (d)(1)(iv) of 
this section. The verification of purchase orders, invoices and bills of 
lading will be accomplished through the review of a distinct audit 
trail. The audit trail documents must consist of a cash disbursement or 
purchase journal or equivalent records to establish the purchase of the 
fabric. The headings in each of these journals or other records must 
contain the date, vendor name, and amount paid for the fabric. The 
verification of production records and work orders will be accomplished 
through analysis of the inventory records of the producer or entity 
controlling production.

[[Page 199]]

The inventory records must reflect the production of the finished 
article which must be referenced to the original purchase order or lot 
number covering the fabric used in production. In the inventory 
production records, the inventory should show the opening balance of the 
inventory plus the purchases made during the accounting period and the 
inventory closing balance.
    (2) Notice of determination. If, based on a verification of a 
declaration of compliance filed under this section, CBP determines that 
the applicable 75 or 85 percent standard specified in paragraph 
(b)(1)(i) or paragraph (b)(1)(ii) of this section was not met, CBP will 
publish a notice of that determination in the Federal Register.

[CBP Dec. 04-40, 69 FR 69518, Nov. 30, 2004]

   Non-Textile Articles Under the United States-Caribbean Basin Trade 
                             Partnership Act

    Source: T.D. 00-68, 65 FR 59663, Oct. 5, 2000, unless otherwise 
noted.



Sec. 10.231  Applicability.

    Title II of Public Law 106-200 (114 Stat. 251), entitled the United 
States-Caribbean Basin Trade Partnership Act (CBTPA), amended section 
213(b) of the Caribbean Basin Economic Recovery Act (the CBERA, 19 
U.S.C. 2701-2707) to authorize the President to extend additional trade 
benefits to countries that have been designated as beneficiary countries 
under the CBERA. Section 213(b)(3) of the CBERA (19 U.S.C. 2703(b)(3)) 
provides for special preferential tariff treatment of certain non-
textile articles that are otherwise excluded from duty-free treatment 
under the CBERA. The provisions of Sec. Sec. 10.231-10.237 of this part 
set forth the legal requirements and procedures that apply for purposes 
of obtaining preferential tariff treatment pursuant to CBERA section 
213(b)(3).

[T.D. 00-68, 65 FR 59663, Oct. 5, 2000; 65 FR 67263, Nov. 9, 2000]



Sec. 10.232  Definitions.

    When used in Sec. Sec. 10.231 through 10.237, the following terms 
have the meanings indicated:
    CBERA. ``CBERA'' means the Caribbean Basin Economic Recovery Act, 19 
U.S.C. 2701-2707.
    CBTPA beneficiary country. ``CBTPA beneficiary country'' means a 
``beneficiary country'' as defined in Sec. 10.191(b)(1) for purposes of 
the CBERA which the President also has designated as a beneficiary 
country for purposes of preferential duty treatment of articles under 19 
U.S.C. 2703(b)(3) and which has been the subject of a finding by the 
President or his designee, published in the Federal Register, that the 
beneficiary country has satisfied the requirements of 19 U.S.C. 
2703(b)(4)(A)(ii).
    CBTPA originating good. ``CBTPA originating good'' means a good that 
meets the rules of origin for a good as set forth in General Note 12, 
HTSUS, and in the appendix to part 181 of this chapter and as applied 
under Sec. 10.233(b).
    HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United 
States.
    NAFTA. ``NAFTA'' means the North American Free Trade Agreement 
entered into by the United States, Canada, and Mexico on December 17, 
1992.
    Preferential tariff treatment. ``Preferential tariff treatment'' 
when used with reference to an imported article means entry, or 
withdrawal from warehouse for consumption, in the customs territory of 
the United States with duty and other tariff treatment that is identical 
to the tariff treatment that would be accorded at that time under Annex 
302.2 of the NAFTA to an imported article described in the same 8-digit 
subheading of the HTSUS that is a good of Mexico.

[T.D. 00-68, 65 FR 59663, Oct. 5, 2000; 65 FR 67264, Nov. 9, 2000]



Sec. 10.233  Articles eligible for preferential tariff treatment.

    (a) General. The preferential tariff treatment referred to in Sec. 
10.231 applies to any of the following articles, provided that the 
article in question is a CBTPA originating good, is imported directly 
into the customs territory of the United States from a CBTPA beneficiary 
country, and is not accorded duty-free treatment under U.S. Note 2(b), 
Subchapter II, Chapter 98, HTSUS (see Sec. 10.26):

[[Page 200]]

    (1) Footwear not designated on August 5, 1983, as eligible articles 
for the purpose of the Generalized System of Preferences under Title V, 
Trade Act of 1974, as amended (19 U.S.C. 2461 through 2467);
    (2) Tuna, prepared or preserved in any manner, in airtight 
containers;
    (3) Petroleum, or any product derived from petroleum, provided for 
in headings 2709 and 2710 of the HTSUS;
    (4) Watches and watch parts (including cases, bracelets, and 
straps), of whatever type including, but not limited to, mechanical, 
quartz digital or quartz analog, if those watches or watch parts contain 
any material which is the product of any country with respect to which 
HTSUS column 2 rates of duty apply; and
    (5) Articles to which reduced rates of duty apply under Sec. 
10.198a, except as otherwise provided in paragraph (c) of this section.
    (b) Application of NAFTA rules of origin. In determining whether an 
article is a CBTPA originating good for purposes of paragraph (a) of 
this section, application of the provisions of General Note 12 of the 
HTSUS and the appendix to part 181 of this chapter will be subject to 
the following rules:
    (1) No country other than the United States and a CBTPA beneficiary 
country may be treated as being a party to the NAFTA;
    (2) Any reference to trade between the United States and Mexico will 
be deemed to refer to trade between the United States and a CBTPA 
beneficiary country;
    (3) Any reference to a party will be deemed to refer to a CBTPA 
beneficiary country or the United States; and
    (4) Any reference to parties will be deemed to refer to any 
combination of CBTPA beneficiary countries or to the United States and 
one or more CBTPA beneficiary countries (or any combination involving 
the United States and CBTPA beneficiary countries).
    (c) Duty reductions for leather-related articles. If, after it is 
determined that an article described in paragraph (a)(5) of this section 
qualifies as a CBTPA originating good and is eligible for preferential 
tariff treatment under this section, it is determined that the article 
in question also would otherwise qualify for a reduced rate of duty 
under Sec. 10.198a and that reduced rate of duty is lower than the rate 
of duty that would apply under this section, that lower rate of duty 
will apply to the article for purposes of preferential tariff treatment 
under this section.
    (d) Imported directly defined. For purposes of paragraph (a) of this 
section, the words ``imported directly'' mean:
    (1) Direct shipment from any CBTPA beneficiary country to the United 
States without passing through the territory of any country that is not 
a CBTPA beneficiary country;
    (2) If the shipment is from any CBTPA beneficiary country to the 
United States through the territory of any country that is not a CBTPA 
beneficiary country, the articles in the shipment do not enter into the 
commerce of any country that is not a CBTPA beneficiary country while en 
route to the United States and the invoices, bills of lading, and other 
shipping documents show the United States as the final destination; or
    (3) If the shipment is from any CBTPA beneficiary country to the 
United States through the territory of any country that is not a CBTPA 
beneficiary country, and the invoices and other documents do not show 
the United States as the final destination, the articles in the shipment 
upon arrival in the United States are imported directly only if they:
    (i) Remained under the control of the customs authority of the 
intermediate country;
    (ii) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
producer's sales agent; and
    (iii) Were not subjected to operations other than loading or 
unloading, and other activities necessary to preserve the articles in 
good condition.



Sec. 10.234  Certificate of Origin.

    A Certificate of Origin as specified in Sec. 10.236 must be 
employed to certify that an article described in Sec. 10.233(a)(1) 
through (5) being exported from a

[[Page 201]]

CBTPA beneficiary country to the United States qualifies for the 
preferential tariff treatment referred to in Sec. 10.231. The 
Certificate of Origin must be prepared by the exporter in the CBTPA 
beneficiary country. Where the CBTPA beneficiary country exporter is not 
the producer of the article, that exporter may complete and sign a 
Certificate of Origin on the basis of:
    (a) Its reasonable reliance on the producer's written representation 
that the article qualifies for preferential tariff treatment; or
    (b) A completed and signed Certificate of Origin for the article 
voluntarily provided to the exporter by the producer.



Sec. 10.235  Filing of claim for preferential tariff treatment.

    (a) Declaration. In connection with a claim for preferential tariff 
treatment for an article described in Sec. 10.233(a)(1) through (5), 
the importer must make a written declaration that the article qualifies 
for that treatment. The written declaration should be made by including 
on the entry summary, or equivalent documentation, the symbol ``R'' as a 
prefix to the subheading of the HTSUS under which the article in 
question is classified. Except in any of the circumstances described in 
Sec. 10.236(d)(1), the declaration required under this paragraph must 
be based on a complete and properly executed original Certificate of 
Origin that covers the article being imported and that is in the 
possession of the importer.
    (b) Corrected declaration. If, after making the declaration required 
under paragraph (a) of this section, the importer has reason to believe 
that a Certificate of Origin on which a declaration was based contains 
information that is not correct, the importer must 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 
will be effected by submission of a letter or other written statement to 
the Customs port where the declaration was originally filed.



Sec. 10.236  Maintenance of records and submission of Certificate 
by importer.

    (a) Maintenance of records. Each importer claiming preferential 
tariff treatment for an article under Sec. 10.235 must maintain in the 
United States, in accordance with the provisions of part 163 of this 
chapter, all records relating to the importation of the article. Those 
records must include the original Certificate of Origin referred to in 
Sec. 10.235(a) and any other relevant documents or other records as 
specified in Sec. 163.1(a) of this chapter.
    (b) Submission of Certificate. An importer who claims preferential 
tariff treatment on an article under Sec. 10.235(a) must provide, at 
the request of the port director, a copy of the Certificate of Origin 
pertaining to the article. A Certificate of Origin submitted to Customs 
under this paragraph:
    (1) Must be on Customs Form 450, including privately-printed copies 
of that Form, or, as an alternative to Customs Form 450, in an approved 
computerized format or other medium or format as is approved by the 
Office of Field Operations, U.S. Customs Service, Washington, DC 20229. 
An alternative format must contain the same information and 
certification set forth on Customs Form 450;
    (2) Must be signed by the exporter or by the exporter's authorized 
agent having knowledge of the relevant facts;
    (3) Must be completed either in the English language or in the 
language of the country from which the article is exported. If the 
Certificate is completed in a language other than English, the importer 
must provide to Customs upon request a written English translation of 
the Certificate; and
    (4) May be applicable to:
    (i) A single importation of an article 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 articles into the United 
States that occur within a specified period, not to exceed 12 months, 
set out in the Certificate by the exporter.

[[Page 202]]

    (c) Correction and nonacceptance of Certificate. If the port 
director determines that a Certificate of Origin is illegible or 
defective or has not been completed in accordance with paragraph (b) of 
this section, the importer will be given a period of not less than five 
working days to submit a corrected Certificate. A Certificate will not 
be accepted in connection with subsequent importations during a period 
referred to in paragraph (b)(4)(ii) of this section if the port director 
determined that a previously imported identical article covered by the 
Certificate did not qualify for preferential treatment.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer is not 
required to have a Certificate of Origin in his possession for:
    (i) An importation of an article 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 article qualifies for 
preferential tariff treatment;
    (ii) A non-commercial importation of an article; or
    (iii) A commercial importation of an article whose value 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 article covered by this shipment qualifies 
for preferential tariff treatment under the CBTPA.

    Check One:
( ) Producer
( ) Exporter
( ) Importer
( ) Agent
________________________________________________________________________
Name
________________________________________________________________________
Title
________________________________________________________________________
Address
________________________________________________________________________
Signature and Date

    (2) Exception. If the port director determines that an importation 
described 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 Certificate of Origin 
requirement under Sec. Sec. 10.234 through 10.236, the port director 
will 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 will 
have 30 calendar days from the date of the written notice to obtain a 
valid Certificate of Origin, and a failure to timely obtain the 
Certificate of Origin will result in denial of the claim for 
preferential tariff treatment. For purposes of this paragraph, a 
``series of importations'' means two or more entries covering articles 
arriving on the same day from the same exporter and consigned to the 
same person.



Sec. 10.237  Verification and justification of claim for preferential 
tariff treatment.

    (a) Verification by Customs. A claim for preferential tariff 
treatment made under Sec. 10.235, including any statements or other 
information contained on a Certificate of Origin submitted to Customs 
under Sec. 10.236, will be subject to whatever verification the port 
director deems necessary. In the event that the port director for any 
reason is prevented from verifying the claim, the port director may deny 
the claim for preferential tariff treatment. A verification of a claim 
for preferential tariff treatment may involve, but need not be limited 
to, a review of:
    (1) All records required to be made, kept, and made available to 
Customs by the importer or any other person under part 163 of this 
chapter;
    (2) Documentation and other information in a CBTPA beneficiary 
country regarding the country of origin of an article and its 
constituent materials, including, but not limited to, production 
records, information relating to the place of production, the number and 
identification of the types of machinery used in production, and the 
number of workers employed in production; and
    (3) Evidence in a CBTPA beneficiary country to document the use of 
U.S.

[[Page 203]]

materials in the production of the article in question, such as purchase 
orders, invoices, bills of lading and other shipping documents, and 
customs import and clearance documents.
    (b) Importer requirements. In order to make a claim for preferential 
tariff treatment under Sec. 10.235, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the article qualifies for preferential tariff treatment. 
Those records must include documents that support a claim that the 
article in question qualifies for preferential tariff treatment because 
it meets the applicable rule of origin set forth in General Note 12, 
HTSUS, and in the appendix to part 181 of this chapter. A properly 
completed Certificate of Origin in the form prescribed in Sec. 
10.236(b) is a record that would serve this purpose;
    (2) Must establish and implement internal controls which provide for 
the periodic review of the accuracy of the Certificate of Origin or 
other records referred to in paragraph (b)(1) of this section;
    (3) Must have shipping papers that show how the article moved from 
the CBTPA beneficiary country to the United States. If the imported 
article was shipped through a country other than a CBTPA beneficiary 
country and the invoices and other documents from the CBTPA beneficiary 
country do not show the United States as the final destination, the 
importer also must have documentation that demonstrates that the 
conditions set forth in Sec. 10.233(d)(3)(i) through (iii) were met; 
and
    (4) Must be prepared to explain, upon request from Customs, how the 
records and internal controls referred to in paragraphs (b)(1) through 
(b)(3) of this section justify the importer's claim for preferential 
tariff treatment.



        Subpart F_Andean Trade Promotion and Drug Eradication Act

Apparel and Other Textile Articles Under the Andean Trade Promotion and 
                          Drug Eradication Act

    Source: Sections 10.241 through 10.248 issued by T.D. 03-16, 68 FR 
14487, Mar. 25, 2003; 68 FR 67338, Dec. 1, 2003, unless otherwise noted.



Sec. 10.241  Applicability.

    Title XXXI of Public Law 107-210 (116 Stat. 933), entitled the 
Andean Trade Promotion and Drug Eradication Act (ATPDEA), amended 
sections 202, 203, 204, and 208 of the Andean Trade Preference Act (the 
ATPA, 19 U.S.C. 3201-3206) to authorize the President to extend 
additional trade benefits to countries that are designated as 
beneficiary countries under the ATPA. Section 204(b)(3) of the ATPA (19 
U.S.C. 3203(b)(3)) provides for the preferential treatment of certain 
apparel and other textile articles from those ATPA beneficiary countries 
which the President designates as ATPDEA beneficiary countries. The 
provisions of Sec. Sec. 10.241 through 10.248 of this part set forth 
the legal requirements and procedures that apply for purposes of 
obtaining preferential treatment pursuant to ATPA section 204(b)(3) and 
Subchapter XXI, Chapter 98, HTSUS.



Sec. 10.242  Definitions.

    When used in Sec. Sec. 10.241 through 10.248, the following terms 
have the meanings indicated:
    Apparel articles. ``Apparel articles'' means goods classifiable in 
Chapters 61 and 62 and headings 6501, 6502, 6503, and 6504 and 
subheadings 6406.99.15 and 6505.90 of the HTSUS.
    Assembled or sewn or otherwise assembled in one or more ATPDEA 
beneficiary countries. ``Assembled'' and ``sewn or otherwise assembled'' 
when used in the context of production of an apparel or other textile 
article in one or more ATPDEA beneficiary countries has reference to a 
joining together of two or more components that occurred in one or more 
ATPDEA beneficiary countries, whether or not a prior joining operation 
was performed on the article or any of its components in the United 
States.
    ATPA. ``ATPA'' means the Andean Trade Preference Act, 19 U.S.C. 
3201-3206.
    ATPDEA beneficiary country. ``ATPDEA beneficiary country'' means a 
``beneficiary country'' as defined in Sec. 10.202(a) for purposes of 
the ATPA

[[Page 204]]

which the President also has designated as a beneficiary country for 
purposes of preferential treatment of apparel and other textile articles 
under 19 U.S.C. 3203(b)(3) and which has been the subject of a 
determination by the President or his designee, published in the Federal 
Register, that the beneficiary country has satisfied the requirements of 
19 U.S.C. 3203(b)(5)(A)(ii).
    Chief value. ``Chief value'' when used with reference to llama, 
alpaca, and vicu[ntilde]a means that the value of those materials 
exceeds the value of any other single textile material in the fabric or 
component under consideration, with the value in each case determined by 
application of the principles set forth in Sec. 10.243(c)(1)(ii).
    Cut in one or more ATPDEA beneficiary countries. ``Cut'' when used 
in the context of production of textile luggage in one or more ATPDEA 
beneficiary countries means that all fabric components used in the 
assembly of the article were cut from fabric in one or more ATPDEA 
beneficiary countries, or were cut from fabric in the United States and 
used in a partial assembly operation in the United States prior to 
cutting of fabric and assembly of the article in one or more ATPDEA 
beneficiary countries, or both.
    Foreign. ``Foreign'' means of a country other than the United States 
or an ATPDEA beneficiary country.
    HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United 
States.
    Knit-to-shape components. ``Knit-to-shape,'' when used with 
reference to textile components, means components that are knitted or 
crocheted from a yarn directly to a specific shape containing a self-
start edge. Minor cutting or trimming will not affect the determination 
of whether a component is ``knit-to-shape.''
    Luggage. ``Luggage'' means travel goods (such as trunks, hand 
trunks, lockers, valises, satchels, suitcases, wardrobe cases, overnight 
bags, pullman bags, gladstone bags, traveling bags, knapsacks, kitbags, 
haversacks, duffle bags, and like articles designed to contain clothing 
or other personal effects during travel) and brief cases, portfolios, 
school bags, photographic equipment bags, golf bags, camera cases, 
binocular cases, gun cases, occupational luggage cases (for example, 
physicians' cases, sample cases), and like containers and cases designed 
to be carried with the person. The term ``luggage'' does not include 
handbags (that is, pocketbooks, purses, shoulder bags, clutch bags, and 
all similar articles, by whatever name known, customarily carried by 
women or girls). The term ``luggage'' also does not include flat goods 
(that is, small flatware designed to be carried on the person, such as 
banknote cases, bill cases, billfolds, bill purses, bill rolls, card 
cases, change cases, cigarette cases, coin purses, coin holders, 
compacts, currency cases, key cases, letter cases, license cases, money 
cases, pass cases, passport cases, powder cases, spectacle cases, stamp 
cases, vanity cases, tobacco pouches, and similar articles).
    NAFTA. ``NAFTA'' means the North American Free Trade Agreement 
entered into by the United States, Canada, and Mexico on December 17, 
1992.
    Preferential treatment. ``Preferential treatment'' means entry, or 
withdrawal from warehouse for consumption, in the customs territory of 
the United States free of duty and free of any quantitative 
restrictions, limitations, or consultation levels as provided in 19 
U.S.C. 3203(b)(3).
    Wholly formed fabric components. ``Wholly formed,'' when used with 
reference to fabric components, means that all of the production 
processes, starting with the production of wholly formed fabric and 
ending with a component that is ready for incorporation into an apparel 
article, took place in a single country.
    Wholly formed fabrics. ``Wholly formed,'' when used with reference 
to fabric(s), means that all of the production processes, starting with 
polymers, fibers, filaments, textile strips, yarns, twine, cordage, 
rope, or strips of fabric and ending with a fabric by a weaving, 
knitting, needling, tufting, felting, entangling or other process, took 
place in a single country.
    Wholly formed yarns. ``Wholly formed,'' when used with reference to 
yarns, means that all of the production processes, starting with the 
extrusion

[[Page 205]]

of filament, strip, film, or sheet and including drawing to fully orient 
a filament or slitting a film or sheet into strip, or the spinning of 
all fibers into yarn, or both, and ending with a yarn or plied yarn, 
took place in the United States or in one or more ATPDEA beneficiary 
countries.



Sec. 10.243  Articles eligible for preferential treatment.

    (a) General. Subject to paragraphs (b) and (c) of this section, 
preferential treatment applies to the following apparel and other 
textile articles that are imported directly into the customs territory 
of the United States from an ATPDEA beneficiary country:
    (1) Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries, or in the United States, or in both, 
exclusively from any one of the following:
    (i) Fabrics or fabric components wholly formed, or components knit-
to-shape, in the United States, from yarns wholly formed in the United 
States or in one or more ATPDEA beneficiary countries (including fabrics 
not formed from yarns, if those fabrics are classifiable under heading 
5602 or 5603 of the HTSUS and are formed in the United States), provided 
that, if the apparel article is assembled from knitted or crocheted or 
woven wholly formed fabrics or from knitted or crocheted or woven wholly 
formed fabric components produced from fabric, all dyeing, printing, and 
finishing of that knitted or crocheted or woven fabric or component was 
carried out in the United States;
    (ii) Fabrics or fabric components formed, or components knit-to-
shape, in one or more ATPDEA beneficiary countries from yarns wholly 
formed in one or more ATPDEA beneficiary countries, if those fabrics 
(including fabrics not formed from yarns, if those fabrics are 
classifiable under heading 5602 or 5603 of the HTSUS and are formed in 
one or more ATPDEA beneficiary countries) or components are in chief 
value of llama, alpaca, and/or vicu[ntilde]a;
    (iii) Fabrics or yarns, provided that apparel articles (except 
articles classifiable under subheading 6212.10 of the HTSUS) of those 
fabrics or yarns would be considered an originating good under General 
Note 12(t), HTSUS, if the apparel articles had been imported directly 
from Canada or Mexico; or
    (iv) Fabrics or yarns that the President or his designee has 
designated in the Federal Register as fabrics or yarns that cannot be 
supplied by the domestic industry in commercial quantities in a timely 
manner;
    (2) Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries, or in the United States, or in both, 
exclusively from a combination of fabrics, fabric components, knit-to-
shape components or yarns described in two or more of paragraphs 
(a)(1)(i) through (a)(1)(iv) of this section;
    (3) A handloomed, handmade, or folklore apparel or other textile 
article of an ATPDEA beneficiary country that the President or his 
designee and representatives of the ATPDEA beneficiary country mutually 
agree is a handloomed, handmade, or folklore article and that is 
certified as a handloomed, handmade, or folklore article by the 
competent authority of the ATPDEA beneficiary country;
    (4) Brassieres classifiable under subheading 6212.10 of the HTSUS, 
if both cut and sewn or otherwise assembled in the United States, or in 
one or more ATPDEA beneficiary countries, or in both, other than 
articles entered as articles described in paragraphs (a)(1) through 
(a)(3) and (a)(7) of this section, and provided that any applicable 
additional requirements set forth in Sec. 10.248 are met;
    (5) Textile luggage assembled in an ATPDEA beneficiary country from 
fabric wholly formed and cut in the United States, from yarns wholly 
formed in the United States, that is entered under subheading 9802.00.80 
of the HTSUS;
    (6) Textile luggage assembled in one or more ATPDEA beneficiary 
countries from fabric cut in one or more ATPDEA beneficiary countries 
from fabric wholly formed in the United States from yarns wholly formed 
in the United States; and
    (7) Apparel articles sewn or otherwise assembled in one or more 
ATPDEA beneficiary countries from fabrics or from fabric components 
formed, or from components knit-to-shape, in one

[[Page 206]]

or more ATPDEA beneficiary countries from yarns wholly formed in the 
United States or in one or more ATPDEA beneficiary countries (including 
fabrics not formed from yarns, if those fabrics are classifiable under 
heading 5602 or 5603 of the HTSUS and are formed in one or more ATPDEA 
beneficiary countries), including apparel articles sewn or otherwise 
assembled in part but not exclusively from any of the fabrics, fabric 
components formed, or components knit-to-shape described in paragraph 
(a)(1) of this section.
    (b) Dyeing, printing, finishing and other operations--(1) Dyeing, 
printing and finishing operations. Dyeing, printing, and finishing 
operations may be performed on any yarn, fabric, or knit-to-shape or 
other component used in the production of any article described under 
paragraph (a) of this section without affecting the eligibility of the 
article for preferential treatment, provided that the operation is 
performed in the United States or in an ATPDEA beneficiary country and 
not in any other country and subject to the following additional 
conditions:
    (i) In the case of an article described in paragraph (a)(1), (a)(2), 
or (a)(7) of this section that contains a knitted or crocheted or woven 
fabric, or a knitted or crocheted or woven fabric component produced 
from fabric, that was wholly formed in the United States from yarns 
wholly formed in the United States, any dyeing, printing, or finishing 
of that knitted or crocheted or woven fabric or component must have been 
carried out in the United States; and
    (ii) In the case of assembled luggage described in paragraph (a)(5) 
of this section, an operation may be performed in an ATPDEA beneficiary 
country only if that operation is incidental to the assembly process 
within the meaning of Sec. 10.16.
    (2) Other operations. An article described under paragraph (a) of 
this section that is otherwise eligible for preferential treatment will 
not be disqualified from receiving that treatment by virtue of having 
undergone one or more operations such as embroidering, stone-washing, 
enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, 
garment-dyeing or screen printing, provided that the operation is 
performed in the United States or in an ATPDEA beneficiary country and 
not in any other country. However, in the case of assembled luggage 
described in paragraph (a)(5) of this section, an operation may be 
performed in an ATPDEA beneficiary country without affecting the 
eligibility of the article for preferential treatment only if it is 
incidental to the assembly process within the meaning of Sec. 10.16.
    (c) Special rules for certain component materials--(1) Foreign 
findings, trimmings, interlinings, and yarns--(i) General. An article 
otherwise described under paragraph (a) of this section will not be 
ineligible for the preferential treatment referred to in Sec. 10.241 
because the article contains:
    (A) Findings and trimmings of foreign origin, if the value of those 
findings and trimmings does not exceed 25 percent of the cost of the 
components of the assembled article. For purposes of this section 
``findings and trimmings'' include, but are not limited to, sewing 
thread, hooks and eyes, snaps, buttons, ``bow buds,'' decorative lace 
trim, elastic strips, zippers (including zipper tapes), and labels;
    (B) Interlinings of foreign origin, if the value of those 
interlinings does not exceed 25 percent of the cost of the components of 
the assembled article. For purposes of this section ``interlinings'' 
include only a chest type plate, a ``hymo'' piece, or ``sleeve header,'' 
of woven or weft-inserted warp knit construction and of coarse animal 
hair or man-made filaments;
    (C) Any combination of findings and trimmings of foreign origin and 
interlinings of foreign origin, if the total value of those findings and 
trimmings and interlinings does not exceed 25 percent of the cost of the 
components of the assembled article; or
    (D) Yarns not wholly formed in the United States or in one or more 
ATPDEA beneficiary countries if the total weight of all those yarns is 
not more than 7 percent of the total weight of the article.
    (ii) ``Cost'' and ``value'' defined. The ``cost'' of components and 
the ``value''

[[Page 207]]

of findings and trimmings or interlinings referred to in paragraph 
(c)(1)(i) of this section means:
    (A) The price of the components, findings and trimmings, or 
interlinings when last purchased, f.o.b. port of exportation, as set out 
in the invoice or other commercial documents, or, if the price is other 
than f.o.b. port of exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price; or
    (2) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the freight, insurance, packing, and other costs incurred in 
transporting the components, findings and trimmings, or interlinings to 
the place of production if included in that price; or
    (B) If the price cannot be determined under paragraph (c)(1)(ii)(A) 
of this section or if Customs finds that price to be unreasonable, all 
reasonable expenses incurred in the growth, production, manufacture, or 
other processing of the components, findings and trimmings, or 
interlinings, including the cost or value of materials and general 
expenses, plus a reasonable amount for profit, and the freight, 
insurance, packing, and other costs, if any, incurred in transporting 
the components, findings and trimmings, or interlinings to the port of 
exportation.
    (iii) Treatment of yarns as findings or trimmings. If any yarns not 
wholly formed in the United States or one or more ATPDEA beneficiary 
countries are used in an article as a finding or trimming described in 
paragraph (c)(1)(i)(A) of this section, the yarns will be considered to 
be a finding or trimming for purposes of paragraph (c)(1)(i) of this 
section.
    (2) Special rule for nylon filament yarn. An article otherwise 
described under paragraph (a)(1)(i) through (iii), (a)(2), or (a)(7) of 
this section will not be ineligible for the preferential treatment 
referred to in Sec. 10.241 because the article contains nylon filament 
yarn (other than elastomeric yarn) that is classifiable in subheading 
5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 
5402.41.10, 5402.41.90, 5402.51.00, or 5402.61.00 of the HTSUS and that 
is entered free of duty from Canada, Mexico, or Israel.
    (d) Imported directly defined. For purposes of paragraph (a) of this 
section, the words ``imported directly'' mean:
    (1) Direct shipment from any ATPDEA beneficiary country to the 
United States without passing through the territory of any country that 
is not an ATPDEA beneficiary country;
    (2) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an ATPDEA 
beneficiary country, the articles in the shipment do not enter into the 
commerce of any country that is not an ATPDEA beneficiary country while 
en route to the United States and the invoices, bills of lading, and 
other shipping documents show the United States as the final 
destination; or
    (3) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an ATPDEA 
beneficiary country, and the invoices and other documents do not show 
the United States as the final destination, the articles in the shipment 
upon arrival in the United States are imported directly only if they:
    (i) Remained under the control of the customs authority of the 
intermediate country;
    (ii) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
producer's sales agent; and
    (iii) Were not subjected to operations other than loading or 
unloading, and other activities necessary to preserve the articles in 
good condition.



Sec. 10.244  Certificate of Origin.

    (a) General. A Certificate of Origin must be employed to certify 
that an apparel or other textile article being exported from an ATPDEA 
beneficiary country to the United States qualifies for the preferential 
treatment referred to in Sec. 10.241. The Certificate of Origin must be 
prepared by the exporter in the ATPDEA beneficiary country in

[[Page 208]]

the format specified in paragraph (b) of this section. Where the ATPDEA 
beneficiary country exporter is not the producer of the article, that 
exporter may complete and sign a Certificate of Origin on the basis of:
    (1) Its reasonable reliance on the producer's written representation 
that the article qualifies for preferential treatment; or
    (2) A completed and signed Certificate of Origin for the article 
voluntarily provided to the exporter by the producer.
    (b) Form of Certificate. The Certificate of Origin referred to in 
paragraph (a) of this section must be in the following format:


[[Page 209]]


[GRAPHIC] [TIFF OMITTED] TR01DE03.016

    (c) Preparation of Certificate. The following rules will apply for 
purposes of completing the Certificate of Origin set forth in paragraph 
(b) of this section:
    (1) Blocks 1 through 5 pertain only to the final article exported to 
the United States for which preferential treatment may be claimed;
    (2) Block 1 should state the legal name and address (including 
country) of the exporter;
    (3) Block 2 should state the legal name and address (including 
country)

[[Page 210]]

of the producer. If there is more than one producer, attach a list 
stating the legal name and address (including country) of all additional 
producers. If this information is confidential, it is acceptable to 
state ``available to Customs upon request'' in block 2. If the producer 
and the exporter are the same, state ``same'' in block 2;
    (4) Block 3 should state the legal name and address (including 
country) of the importer;
    (5) Block 4 should provide a full description of each article. The 
description should be sufficient to relate it to the invoice description 
and to the description of the article in the international Harmonized 
System. Include the invoice number as shown on the commercial invoice 
or, if the invoice number is not known, include another unique reference 
number such as the shipping order number;
    (6) In block 5, insert the letter that designates the preference 
group which applies to the article according to the description 
contained in the CFR provision cited on the Certificate for that group;
    (7) Blocks 6 through 9 must be completed only when the block in 
question calls for information that is relevant to the preference group 
identified in block 5;
    (8) Block 6 should state the legal name and address (including 
country) of the fabric producer;
    (9) Block 7 should state the legal name and address (including 
country) of the yarn producer;
    (10) Block 8 should state the name of the folklore article or should 
state that the article is handloomed or handmade of handloomed fabric;
    (11) Block 9 should be completed if the article described in block 4 
incorporates a fabric or yarn described in preference group C or D and 
should state the name of the fabric or yarn that has been considered as 
being in short supply in the NAFTA or that has been designated as not 
available in commercial quantities in the United States. Block 9 also 
should be completed if preference group E or I applies to the article 
described in block 4 and the article incorporates a fabric or yarn 
described in preference group C or D;
    (12) Block 10 must contain the signature of the exporter or of the 
exporter's authorized agent having knowledge of the relevant facts;
    (13) Block 14 should reflect the date on which the Certificate was 
completed and signed;
    (14) Block 15 should be completed if the Certificate is intended to 
cover multiple shipments of identical articles as described in block 4 
that are imported into the United States during a specified period of up 
to one year (see Sec. 10.246(b)(4)(ii)). The ``from'' date is the date 
on which the Certificate became applicable to the article covered by the 
blanket Certificate (this date may be prior to the date reflected in 
block 14). The ``to'' date is the date on which the blanket period 
expires; and
    (15) The Certificate may be printed and reproduced locally. If more 
space is needed to complete the Certificate, attach a continuation 
sheet.



Sec. 10.245  Filing of claim for preferential treatment.

    (a) Declaration. In connection with a claim for preferential 
treatment for an apparel or other textile article described in Sec. 
10.243, the importer must make a written declaration that the article 
qualifies for that treatment. The inclusion on the entry summary, or 
equivalent documentation, of the subheading within Chapter 98 of the 
HTSUS under which the article is classified will constitute the written 
declaration. Except in any of the circumstances described in Sec. 
10.246(d)(1), the declaration required under this paragraph must be 
based on a Certificate of Origin that has been completed and properly 
executed in accordance with Sec. 10.244, that covers the article being 
imported, and that is in the possession of the importer.
    (b) Corrected declaration. If, after making the declaration required 
under paragraph (a) of this section, the importer has reason to believe 
that a Certificate of Origin on which a declaration was based contains 
information that is not correct, the importer must 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 
will be effected by submission of a

[[Page 211]]

letter or other written statement to the Customs port where the 
declaration was originally filed.



Sec. 10.246  Maintenance of records and submission of Certificate by 
importer.

    (a) Maintenance of records. Each importer claiming preferential 
treatment for an article under Sec. 10.245 must maintain in the United 
States, in accordance with the provisions of part 163 of this chapter, 
all records relating to the importation of the article. Those records 
must include a copy of the Certificate of Origin referred to in Sec. 
10.245(a) and any other relevant documents or other records as specified 
in Sec. 163.1(a) of this chapter.
    (b) Submission of Certificate. An importer who claims preferential 
treatment on an apparel or other textile article under Sec. 10.245(a) 
must provide, at the request of the port director, a copy of the 
Certificate of Origin pertaining to the article. A Certificate of Origin 
submitted to Customs under this paragraph:
    (1) Must be in writing or must be transmitted electronically through 
any electronic data interchange system authorized by Customs for that 
purpose;
    (2) If in writing, must be signed by the exporter or by the 
exporter's authorized agent having knowledge of the relevant facts;
    (3) Must be completed either in the English language or in the 
language of the country from which the article is exported. If the 
Certificate is completed in a language other than English, the importer 
must provide to Customs upon request a written English translation of 
the Certificate; and
    (4) May be applicable to:
    (i) A single importation of an article 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 articles into the United 
States that occur within a specified blanket period, not to exceed 12 
months, set out in the Certificate by the exporter. For purposes of this 
paragraph and Sec. 10.244(c)(14), ``identical articles'' means articles 
that are the same in all material respects, including physical 
characteristics, quality, and reputation.
    (c) Correction and nonacceptance of Certificate. If the port 
director determines that a Certificate of Origin is illegible or 
defective or has not been completed in accordance with paragraph (b) of 
this section, the importer will be given a period of not less than five 
working days to submit a corrected Certificate. A Certificate will not 
be accepted in connection with subsequent importations during a period 
referred to in paragraph (b)(4)(ii) of this section if the port director 
determined that a previously imported identical article covered by the 
Certificate did not qualify for preferential treatment.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer is not 
required to have a Certificate of Origin in his possession for:
    (i) An importation of an article 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 article qualifies for 
preferential treatment;
    (ii) A non-commercial importation of an article; or
    (iii) A commercial importation of an article whose value 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 article covered by this shipment qualifies 
for preferential treatment under the ATPDEA.
    Check One:

( ) Producer
( ) Exporter
( ) Importer
( ) Agent

----------------------------------
Name

----------------------------------
Title

----------------------------------
Address

----------------------------------
Signature and Date


[[Page 212]]


    (2) Exception. If the port director determines that an importation 
described 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 Certificate of Origin 
requirement under Sec. Sec. 10.244 through 10.246, the port director 
will 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 treatment. The importer will have 30 
calendar days from the date of the written notice to obtain a valid 
Certificate of Origin, and a failure to timely obtain the Certificate of 
Origin will result in denial of the claim for preferential treatment. 
For purposes of this paragraph, a ``series of importations'' means two 
or more entries covering articles arriving on the same day from the same 
exporter and consigned to the same person.



Sec. 10.247  Verification and justification of claim for preferential 
treatment.

    (a) Verification by Customs. A claim for preferential treatment made 
under Sec. 10.245, including any statements or other information 
contained on a Certificate of Origin submitted to Customs under Sec. 
10.246, will be subject to whatever verification the port director deems 
necessary. In the event that the port director for any reason is 
prevented from verifying the claim, the port director may deny the claim 
for preferential treatment. A verification of a claim for preferential 
treatment may involve, but need not be limited to, a review of:
    (1) All records required to be made, kept, and made available to 
Customs by the importer or any other person under part 163 of this 
chapter;
    (2) Documentation and other information regarding the country of 
origin of an article and its constituent materials, including, but not 
limited to, production records, information relating to the place of 
production, the number and identification of the types of machinery used 
in production, and the number of workers employed in production; and
    (3) Evidence to document the use of U.S. or ATPDEA beneficiary 
country materials in the production of the article in question, such as 
purchase orders, invoices, bills of lading and other shipping documents, 
and customs import and clearance documents.
    (b) Importer requirements. In order to make a claim for preferential 
treatment under Sec. 10.245, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the apparel or other textile article qualifies for 
preferential treatment. Those records must include documents that 
support a claim that the article in question qualifies for preferential 
treatment because it is specifically described in one of the provisions 
under Sec. 10.243(a). If the importer is claiming that the article 
incorporates fabric or yarn that was wholly formed in the United States 
or in an ATPDEA beneficiary country, the importer must have records that 
identify the producer of the fabric or yarn. A properly completed 
Certificate of Origin in the form set forth in Sec. 10.244(b) is a 
record that would serve these purposes;
    (2) Must establish and implement internal controls which provide for 
the periodic review of the accuracy of the Certificates of Origin or 
other records referred to in paragraph (b)(1) of this section;
    (3) Must have shipping papers that show how the article moved from 
the ATPDEA beneficiary country to the United States. If the imported 
article was shipped through a country other than an ATPDEA beneficiary 
country and the invoices and other documents from the ATPDEA beneficiary 
country do not show the United States as the final destination, the 
importer also must have documentation that demonstrates that the 
conditions set forth in Sec. 10.243(d)(3)(i) through (iii) were met; 
and
    (4) Must be prepared to explain, upon request from Customs, how the 
records and internal controls referred to in paragraphs (b)(1) through 
(b)(3) of this section justify the importer's claim for preferential 
treatment.

[[Page 213]]



Sec. 10.248  Additional requirements for preferential treatment of 
brassieres.

    (a) Definitions. When used in this section, the following terms have 
the meanings indicated:
    (1) Producer. ``Producer'' means an individual, corporation, 
partnership, association, or other entity or group that exercises 
direct, daily operational control over the production process in an 
ATPDEA beneficiary country.
    (2) Entity controlling production. ``Entity controlling production'' 
means an individual, corporation, partnership, association, or other 
entity or group that is not a producer and that controls the production 
process in an ATPDEA beneficiary country through a contractual 
relationship or other indirect means.
    (3) Fabrics formed in the United States. ``Fabrics formed in the 
United States'' means fabrics that were produced by a weaving, knitting, 
needling, tufting, felting, entangling or other fabric-making process 
performed in the United States.
    (4) Cost. ``Cost'' when used with reference to fabrics formed in the 
United States means:
    (i) The price of the fabrics when last purchased, f.o.b. port of 
exportation, as set out in the invoice or other commercial documents, 
or, if the price is other than f.o.b. port of exportation:
    (A) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price; or
    (B) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the freight, insurance, packing, and other costs incurred in 
transporting the fabrics to the place of production if included in that 
price; or
    (ii) If the price cannot be determined under paragraph (a)(4)(i) of 
this section or if Customs finds that price to be unreasonable, all 
reasonable expenses incurred in the growth, production, manufacture, or 
other processing of the fabrics, including the cost or value of 
materials (which includes the cost of non-recoverable scrap generated in 
forming the fabrics) and general expenses, plus a reasonable amount for 
profit, and the freight, insurance, packing, and other costs, if any, 
incurred in transporting the fabrics to the port of exportation.
    (5) Declared customs value. ``Declared customs value'' when used 
with reference to fabric contained in an article means the sum of:
    (i) The cost of fabrics formed in the United States that the 
producer or entity controlling production can verify; and
    (ii) The cost of all other fabric contained in the article, 
exclusive of all findings and trimmings, determined as follows:
    (A) In the case of fabric purchased by the producer or entity 
controlling production, the f.o.b. port of exportation price of the 
fabric as set out in the invoice or other commercial documents, or, if 
the price is other than f.o.b. port of exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price, 
plus expenses for embroidering and dyeing, printing, and finishing 
operations applied to the fabric if not included in that price; or
    (2) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, plus 
expenses for embroidering and dyeing, printing, and finishing operations 
applied to the fabric if not included in that price, but less the 
freight, insurance, packing, and other costs incurred in transporting 
the fabric to the place of production if included in that price;
    (B) In the case of fabric for which the cost cannot be determined 
under paragraph (a)(5)(ii)(A) of this section or if Customs finds that 
cost to be unreasonable, all reasonable expenses incurred in the growth, 
production, or manufacture of the fabric, including the cost or value of 
materials (which includes the cost of non-recoverable scrap generated in 
the growth, production, or manufacture of the fabric), general expenses 
and embroidering and dyeing, printing, and finishing expenses, plus a 
reasonable amount for profit, and the freight, insurance, packing, and 
other costs, if any, incurred in transporting the fabric to the port of 
exportation;

[[Page 214]]

    (C) In the case of fabric components purchased by the producer or 
entity controlling production, the f.o.b. port of exportation price of 
those fabric components as set out in the invoice or other commercial 
documents, less the cost or value of any non-textile materials, and less 
expenses for cutting or other processing to create the fabric components 
other than knitting to shape, that the producer or entity controlling 
production can verify, or, if the price is other than f.o.b. port of 
exportation:
    (1) The price as set out in the invoice or other commercial 
documents adjusted to arrive at an f.o.b. port of exportation price, 
less the cost or value of any non-textile materials, and less expenses 
for cutting or other processing to create the fabric components other 
than knitting to shape, that the producer or entity controlling 
production can verify; or
    (2) If no exportation to an ATPDEA beneficiary country is involved, 
the price as set out in the invoice or other commercial documents, less 
the cost or value of any non-textile materials, and less expenses for 
cutting or other processing to create the fabric components other than 
knitting to shape, that the producer or entity controlling production 
can verify, and less the freight, insurance, packing, and other costs 
incurred in transporting the fabric components to the place of 
production if included in that price; and
    (D) In the case of fabric components for which a fabric cost cannot 
be determined under paragraph (a)(5)(ii)(C) of this section or if 
Customs finds that cost to be unreasonable: all reasonable expenses 
incurred in the growth, production, or manufacture of the fabric 
components, including the cost or value of materials (which does not 
include the cost of recoverable scrap generated in the growth, 
production, or manufacture of the fabric components) and general 
expenses, but excluding the cost or value of any non-textile materials, 
and excluding expenses for cutting or other processing to create the 
fabric components other than knitting to shape, that the producer or 
entity controlling production can verify, plus a reasonable amount for 
profit, and the freight, insurance, packing, and other costs, if any, 
incurred in transporting the fabric components to the port of 
exportation.
    (6) Year. ``Year'' means a 12-month period beginning on October 1 
and ending on September 30 but does not include any 12-month period that 
began prior to October 1, 2002.
    (7) Entered. ``Entered'' means entered, or withdrawn from warehouse 
for consumption, in the customs territory of the United States.
    (b) Limitations on preferential treatment--(1) General. During the 
year that begins on October 1, 2003, and during any subsequent year, 
articles of a producer or an entity controlling production that conform 
to the production standards set forth in Sec. 10.243(a)(4) will be 
eligible for preferential treatment only if:
    (i) The aggregate cost of fabrics (exclusive of all findings and 
trimmings) formed in the United States that were used in the production 
of all of those articles of that producer or that entity controlling 
production that are entered as articles described in Sec. 10.243(a)(4) 
during the immediately preceding year was at least 75 percent of the 
aggregate declared customs value of the fabric (exclusive of all 
findings and trimmings) contained in all of those articles of that 
producer or that entity controlling production that are entered as 
articles described in Sec. 10.243(a)(4) during that year; or
    (ii) In a case in which the 75 percent requirement set forth in 
paragraph (b)(1)(i) of this section was not met during a year and 
therefore those articles of that producer or that entity controlling 
production were not eligible for preferential treatment during the 
following year, the aggregate cost of fabrics (exclusive of all findings 
and trimmings) formed in the United States that were used in the 
production of all of those articles of that producer or that entity 
controlling production that conform to the production standards set 
forth in Sec. 10.243(a)(4) and that were entered during the immediately 
preceding year was at least 85 percent of the aggregate declared customs 
value of the fabric (exclusive of all findings and trimmings) contained 
in all of those articles of that producer or that entity controlling 
production

[[Page 215]]

that conform to the production standards set forth in Sec. 10.243(a)(4) 
and that were entered during that year; and
    (iii) In conjunction with the filing of the claim for preferential 
treatment under Sec. 10.245, the importer records on the entry summary 
or warehouse withdrawal for consumption (Customs Form 7501, column 34), 
or its electronic equivalent, the distinct and unique identifier 
assigned by Customs to the applicable documentation prescribed under 
paragraph (c) of this section.
    (2) Rules of application--(i) General. For purposes of paragraphs 
(b)(1)(i) and (b)(1)(ii) of this section and for purposes of preparing 
and filing the documentation prescribed in paragraph (c) of this 
section, the following rules will apply:
    (A) The articles in question must have been produced in the manner 
specified in Sec. 10.243(a)(4) and the articles in question must be 
entered within the same year;
    (B) Articles that are exported to countries other than the United 
States and are never entered are not to be considered in determining 
compliance with the 75 or 85 percent standard specified in paragraph 
(b)(1)(i) or paragraph (b)(1)(ii) of this section;
    (C) Articles that are entered under an HTSUS subheading other than 
the HTSUS subheading which pertains to articles described in Sec. 
10.243(a)(4) are not to be considered in determining compliance with the 
75 percent standard specified in paragraph (b)(1)(i) of this section;
    (D) For purposes of determining compliance with the 85 percent 
standard specified in paragraph (b)(1)(ii) of this section, all articles 
that conform to the production standards set forth in Sec. 10.243(a)(4) 
must be considered, regardless of the HTSUS subheading under which they 
were entered;
    (E) Fabric components and fabrics that constitute findings or 
trimmings are not to be considered in determining compliance with the 75 
or 85 percent standard specified in paragraph (b)(1)(i) or paragraph 
(b)(1)(ii) of this section;
    (F) Beginning October 1, 2003, in order for articles to be eligible 
for preferential treatment in a given year, a producer of, or entity 
controlling production of, those articles must have met the 75 percent 
standard specified in paragraph (b)(1)(i) of this section during the 
immediately preceding year. If articles of a producer or entity 
controlling production fail to meet the 75 percent standard specified in 
paragraph (b)(1)(i) of this section during a year, articles of that 
producer or entity controlling production:
    (1) Will not be eligible for preferential treatment during the 
following year;
    (2) Will remain ineligible for preferential treatment until the year 
that follows a year in which articles of that producer or entity 
controlling production met the 85 percent standard specified in 
paragraph (b)(1)(ii) of this section; and
    (3) After the 85 percent standard specified in paragraph (b)(1)(ii) 
of this section has been met, will again be subject to the 75 percent 
standard specified in paragraph (b)(1)(i) of this section during the 
following year for purposes of determining eligibility for preferential 
treatment in the next year.
    (G) A new producer or new entity controlling production, that is, a 
producer or entity controlling production who did not produce or control 
production of articles that were entered as articles described in Sec. 
10.243(a)(4) during the immediately preceding year, must first establish 
compliance with the 85 percent standard specified in paragraph 
(b)(1)(ii) of this section as a prerequisite to preparation of the 
declaration of compliance referred to in paragraph (c) of this section;
    (H) A declaration of compliance prepared by a producer or by an 
entity controlling production must cover all production of that producer 
or all production that the entity controls for the year in question;
    (I) A producer would not prepare a declaration of compliance if all 
of its production is covered by a declaration of compliance prepared by 
an entity controlling production;
    (J) In the case of a producer, the 75 or 85 percent standard 
specified in paragraph (b)(1)(i) or paragraph (b)(1)(ii) of this section 
and the declaration of compliance procedure under paragraph (c) of this 
section apply to all articles

[[Page 216]]

of that producer for the year in question, even if some but not all of 
that production is also covered by a declaration of compliance prepared 
by an entity controlling production;
    (K) The U.S. importer does not have to be the producer or the entity 
controlling production who prepared the declaration of compliance; and
    (L) The exclusion references regarding findings and trimmings in 
paragraph (b)(1)(i) and paragraph (b)(1)(ii) of this section apply to 
all findings and trimmings, whether or not they are of foreign origin.
    (ii) Examples. The following examples will illustrate application of 
the principles set forth in paragraph (b)(2)(i) of this section.

    Example 1. An ATPDEA beneficiary country producer of articles that 
meet the production standards specified in Sec. 10.243(a)(4) in the 
first year sends 50 percent of that production to ATPDEA region markets 
and the other 50 percent to the U.S. market; the cost of the fabrics 
formed in the United States equals 100 percent of the value of all of 
the fabric in the articles sent to the ATPDEA region and 60 percent of 
the value of all of the fabric in the articles sent to the United 
States. Although the cost of fabrics formed in the United States is more 
than 75 percent of the value of all of the fabric used in all of the 
articles produced, this producer could not prepare a valid declaration 
of compliance because the articles sent to the United States did not 
meet the minimum 75 percent standard.
    Example 2. A producer sends to the United States in the first year 
three shipments of articles that meet the description in Sec. 
10.243(a)(4); one of those shipments is entered under the HTSUS 
subheading that covers articles described in Sec. 10.243(a)(4), the 
second shipment is entered under the HTSUS subheading that covers 
articles described in Sec. 10.243(a)(7), and the third shipment is 
entered under subheading 9802.00.80, HTSUS. In determining whether the 
minimum 75 percent standard has been met in the first year for purposes 
of entry of articles under the HTSUS subheading that covers articles 
described in Sec. 10.243(a)(4) during the following (that is, second) 
year, consideration must be restricted to the articles in the first 
shipment and therefore must not include the articles in the second and 
third shipments.
    Example 3. A producer in the second year begins production of 
articles that conform to the production standards specified in Sec. 
10.243(a)(4); some of those articles are entered in that year under 
HTSUS subheading 6212.10 and others under HTSUS subheading 9802.00.80 
but none are entered in that year under the HTSUS subheading which 
pertains to articles described in Sec. 10.243(a)(4) because the 75 
percent standard had not been met in the preceding (that is, first) 
year. In this case the 85 percent standard applies, and all of the 
articles that were entered under the various HTSUS provisions in the 
second year must be taken into account in determining whether that 85 
percent standard has been met. If the 85 percent was met in the 
aggregate for all of the articles entered in the second year, in the 
next (that is, third) year articles of that producer may receive 
preferential treatment under the HTSUS subheading which pertains to 
articles described in Sec. 10.243(a)(4).
    Example 4. An entity controlling production of articles that meet 
the description in Sec. 10.243(a)(4) buys for the U.S., Canadian and 
Mexican markets; the articles in each case are first sent to the United 
States where they are entered for consumption and then placed in a 
commercial warehouse from which they are shipped to various stores in 
the United States, Canada and Mexico. Notwithstanding the fact that some 
of the articles ultimately ended up in Canada or Mexico, a declaration 
of compliance prepared by the entity controlling production must cover 
all of the articles rather than only those that remained in the United 
States because all of those articles had been entered for consumption.
    Example 5. Fabric is cut and sewn in the United States with other 
U.S. materials to form cups which are joined together to form brassiere 
front subassemblies in the United States, and those front subassemblies 
are then placed in a warehouse in the United States where they are held 
until the following year; during that following year all of the front 
subassemblies are shipped to an ATPDEA beneficiary country where they 
are assembled with elastic strips and labels produced in an Asian 
country and other fabrics, components or materials produced in the 
ATPDEA beneficiary country to form articles that meet the production 
standards specified in Sec. 10.243(a)(4) and that are then shipped to 
the United States and entered during that same year. In determining 
whether the entered articles meet the minimum 75 or 85 percent standard, 
the fabric in the elastic strips and labels is to be disregarded 
entirely because the strips and labels constitute findings or trimmings 
for purposes of this section, and all of the fabric in the front 
subassemblies is countable because it was all formed in the United 
States and used in the production of articles that were entered in the 
same year.
    Example 6. An ATPDEA beneficiary country producer's entire 
production of articles that meet the description in Sec. 10.243(a)(4) 
is sent to a U.S. importer in two separate shipments, one in February 
and the other in June of the same calendar year; the articles

[[Page 217]]

shipped in February do not meet the minimum 75 percent standard, the 
articles shipped in June exceed the 85 percent standard, and the 
articles in the two shipments, taken together, do meet the 75 percent 
standard; the articles covered by the February shipment are entered for 
consumption on March 1 of that calendar year, and the articles covered 
by the June shipment are placed in a Customs bonded warehouse upon 
arrival and are subsequently withdrawn from warehouse for consumption on 
November 1 of that calendar year. The ATPDEA beneficiary country 
producer may not prepare a valid declaration of compliance covering the 
articles in the first shipment because those articles did not meet the 
minimum 75 percent standard and because those articles cannot be 
included with the articles of the second shipment on the same 
declaration of compliance since they were entered in a different year. 
However, the ATPDEA beneficiary country producer may prepare a valid 
declaration of compliance covering the articles in the second shipment 
because those articles did meet the requisite 85 percent standard which 
would apply for purposes of entry of articles in the following year.
    Example 7. A producer in the second year begins production of 
articles exclusively for the U.S. market that meet the production 
standards specified in Sec. 10.243(a)(4), but the entered articles do 
not meet the requisite 85 percent standard until the third year. The 
producer's articles may not receive preferential treatment during the 
second year because there was no production (and thus there were no 
entered articles) in the immediately preceding (that is, first) year on 
which to assess compliance with the 75 percent standard. The producer's 
articles also may not receive preferential treatment during the third 
year because the 85 percent standard was not met in the immediately 
preceding (that is, second) year. However, the producer's articles are 
eligible for preferential treatment during the fourth year based on 
compliance with the 85 percent standard in the immediately preceding 
(that is, third) year.
    Example 8. An entity controlling production (Entity A) uses five 
ATPDEA beneficiary country producers (Producers 1-5), all of which 
produce only articles that meet the description in Sec. 10.243(a)(4); 
Producers 1-4 send all of their production to the United States and 
Producer 5 sends 10 percent of its production to the United States and 
the rest to Europe; Producers 1-3 and Producer 5 produce only pursuant 
to contracts with Entity A, but Producer 4 also operates independently 
of Entity A by producing for several U.S. importers, one of which is an 
entity controlling production (Entity B) that also controls all of the 
production of articles of one other producer (Producer 6) which sends 
all of its production to the United States. A declaration of compliance 
prepared by Entity A must cover all of the articles of Producers 1-3 and 
the 10 percent of articles of Producer 5 that are sent to the United 
States and that portion of the articles of Producer 4 that are produced 
pursuant to the contract with Entity A, because Entity A controls the 
production of those articles. There is no need for Producers 1-3 and 
Producer 5 to prepare a declaration of compliance because they have no 
production that is not covered by a declaration of compliance prepared 
by an entity controlling production. A declaration of compliance 
prepared by Producer 4 would cover all of its production, that is, 
articles produced for Entity A, articles produced for Entity B, and 
articles produced independently for other U.S. importers; a declaration 
of compliance prepared by Entity B must cover that portion of the 
production of Producer 4 that it controls as well as all of the 
production of Producer 6 because Entity B also controls all of the 
production of Producer 6. Producer 6 would not prepare a declaration of 
compliance because all of its production is covered by the declaration 
of compliance prepared by Entity B.

    (c) Documentation--(1) Initial declaration of compliance. In order 
for an importer to comply with the requirement set forth in paragraph 
(b)(1)(iii) of this section, the producer or the entity controlling 
production must have filed with Customs, in accordance with paragraph 
(c)(4) of this section, a declaration of compliance with the applicable 
75 or 85 percent requirement prescribed in paragraph (b)(1)(i) or 
(b)(1)(ii) of this section. After filing of the declaration of 
compliance has been completed, Customs will advise the producer or the 
entity controlling production of the distinct and unique identifier 
assigned to that declaration. The producer or the entity controlling 
production will then be responsible for advising each appropriate U.S. 
importer of that distinct and unique identifier for purposes of 
recording that identifier on the entry summary or warehouse withdrawal. 
In order to provide sufficient time for advising the U.S. importer of 
that distinct and unique identifier prior to the arrival of the articles 
in the United States, the producer or the entity controlling production 
should file the declaration of compliance with Customs at least 10 
calendar days prior to the date of the first shipment of the articles to 
the United States.
    (2) Amended declaration of compliance. If the information on the 
declaration of

[[Page 218]]

compliance referred to in paragraph (c)(1) of this section is based on 
an estimate because final year-end information was not available at that 
time and the final data differs from the estimate, or if the producer or 
the entity controlling production has reason to believe for any other 
reason that the declaration of compliance that was filed contained 
erroneous information, within 30 calendar days after the final year-end 
information becomes available or within 30 calendar days after the date 
of discovery of the error:
    (i) The producer or the entity controlling production must file with 
the Customs office identified in paragraph (c)(4) of this section an 
amended declaration of compliance containing that final year-end 
information or other corrected information; or
    (ii) If that final year-end information or other corrected 
information demonstrates noncompliance with the applicable 75 or 85 
percent requirement, the producer or the entity controlling production 
must in writing advise both the Customs office identified in paragraph 
(c)(4) of this section and each appropriate U.S. importer of that fact.
    (3) Form and preparation of declaration of compliance--(i) Form. The 
declaration of compliance referred to in paragraph (c)(1) of this 
section may be printed and reproduced locally and must be in the 
following format:
[GRAPHIC] [TIFF OMITTED] TR01DE03.017


[[Page 219]]


    (ii) Preparation. The following rules will apply for purposes of 
completing the declaration of compliance set forth in paragraph 
(c)(3)(i) of this section:
    (A) In block 1, fill in the year commencing October 1 and ending 
September 30 of the calendar year during which the applicable 75 or 85 
percent standard specified in paragraph (b)(1)(i) or paragraph 
(b)(1)(ii) of this section was met;
    (B) Block 2 should state the legal name and address (including 
country) of the preparer and should also include the preparer's importer 
identification number (see Sec. 24.5 of this chapter), if the preparer 
has one;
    (C) Block 3 should state the legal name and address (including 
country) of the ATPDEA beneficiary country producer if that producer is 
not already identified in block 2. If there is more than one producer, 
attach a list stating the legal name and address (including country) of 
all additional producers;
    (D) Blocks 4 and 5 apply only to articles that were entered during 
the year identified in block 1; and
    (E) In block 7, the signature must be that of an authorized officer, 
employee, agent or other person having knowledge of the relevant facts 
and the date must be the date on which the declaration of compliance was 
completed and signed.
    (4) Filing of declaration of compliance. The declaration of 
compliance referred to in paragraph (c)(1) of this section:
    (i) Must be completed either in the English language or in the 
language of the country in which the articles covered by the declaration 
were produced. If the declaration is completed in a language other than 
English, the producer or the entity controlling production must provide 
to Customs upon request a written English translation of the 
declaration; and
    (ii) Must be filed with the New York Strategic Trade Center, U.S. 
Customs Service, 1 Penn Plaza, New York, New York 10119.
    (d) Verification of declaration of compliance--(1) Verification 
procedure. A declaration of compliance filed under this section will be 
subject to whatever verification Customs deems necessary. In the event 
that Customs for any reason is prevented from verifying the statements 
made on a declaration of compliance, Customs may deny any claim for 
preferential treatment made under Sec. 10.245 that is based on that 
declaration. A verification of a declaration of compliance may involve, 
but need not be limited to, a review of:
    (i) All records required to be made, kept, and made available to 
Customs by the importer, the producer, the entity controlling 
production, or any other person under part 163 of this chapter;
    (ii) Documentation and other information regarding all articles that 
meet the production standards specified in Sec. 10.243(a)(4) that were 
exported to the United States and that were entered during the year in 
question, whether or not a claim for preferential treatment was made 
under Sec. 10.245. Those records and other information include, but are 
not limited to, work orders and other production records, purchase 
orders, invoices, bills of lading and other shipping documents;
    (iii) Evidence to document the cost of fabrics formed in the United 
States that were used in the production of the articles in question, 
such as purchase orders, invoices, bills of lading and other shipping 
documents, and customs import and clearance documents, work orders and 
other production records, and inventory control records;
    (iv) Evidence to document the cost or value of all fabric other than 
fabrics formed in the United States that were used in the production of 
the articles in question, such as purchase orders, invoices, bills of 
lading and other shipping documents, and customs import and clearance 
documents, work orders and other production records, and inventory 
control records; and
    (v) Accounting books and documents to verify the records and 
information referred to in paragraphs (d)(1)(ii) through (d)(1)(iv) of 
this section. The verification of purchase orders, invoices and bills of 
lading will be accomplished through the review of a distinct audit 
trail. The audit trail documents must consist of a cash disbursement or 
purchase journal or equivalent records to establish the purchase of the 
fabric. The headings in each of these journals or other records must 
contain the date, vendor name, and amount paid for the fabric. The 
verification of

[[Page 220]]

production records and work orders will be accomplished through analysis 
of the inventory records of the producer or entity controlling 
production. The inventory records must reflect the production of the 
finished article which must be referenced to the original purchase order 
or lot number covering the fabric used in production. In the inventory 
production records, the inventory should show the opening balance of the 
inventory plus the purchases made during the accounting period and the 
inventory closing balance.
    (2) Notice of determination. If, based on a verification of a 
declaration of compliance filed under this section, Customs determines 
that the applicable 75 or 85 percent standard specified in paragraph 
(b)(1)(i) or paragraph (b)(1)(ii) of this section was not met, Customs 
will publish a notice of that determination in the Federal Register.

    Extension of ATPA Benefits to Tuna and Certain Other Non-Textile 
                                Articles

    Source: Sections 10.251 through 10.257 issued by T.D. 03-16, 68 FR 
14497, Mar. 25, 2003; 68 FR 67349, Dec. 1, 2003, unless otherwise noted.



Sec. 10.251  Applicability.

    Title XXXI of Public Law 107-210 (116 Stat. 933), entitled the 
Andean Trade Promotion and Drug Eradication Act (ATPDEA), amended 
sections 202, 203, 204, and 208 of the Andean Trade Preference Act (the 
ATPA, 19 U.S.C. 3201-3206) to authorize the President to extend 
additional trade benefits to ATPA beneficiary countries that have been 
designated as ATPDEA beneficiary countries. Sections 204(b)(1) and 
(b)(4) of the ATPA (19 U.S.C. 3203(b)(1) and (b)(4)) provide for the 
preferential treatment of certain non-textile articles that were not 
entitled to duty-free treatment under the ATPA prior to enactment of the 
ATPDEA. The provisions of Sec. Sec. 10.251-10.257 of this part set 
forth the legal requirements and procedures that apply for purposes of 
obtaining preferential treatment pursuant to ATPA sections 204(b)(1) and 
(b)(4).



Sec. 10.252  Definitions.

    When used in Sec. Sec. 10.251 through 10.257, the following terms 
have the meanings indicated:
    ATPA. ``ATPA'' means the Andean Trade Preference Act, 19 U.S.C. 
3201-3206.
    ATPDEA beneficiary country. ``ATPDEA beneficiary country'' means a 
``beneficiary country'' as defined in Sec. 10.202(a) for purposes of 
the ATPA which the President also has designated as a beneficiary 
country for purposes of preferential treatment of products under 19 
U.S.C. 3203(b)(1) and (b)(4) and which has been the subject of a finding 
by the President or his designee, published in the Federal Register, 
that the beneficiary country has satisfied the requirements of 19 U.S.C. 
3203(b)(5)(A)(ii).
    ATPDEA beneficiary country vessel. ``ATPDEA beneficiary country 
vessel'' means a vessel:
    (a) Which is registered or recorded in an ATPDEA beneficiary 
country;
    (b) Which sails under the flag of an ATPDEA beneficiary country;
    (c) Which is at least 75 percent owned by nationals of an ATPDEA 
beneficiary country or by a company having its principal place of 
business in an ATPDEA beneficiary country, of which the manager or 
managers, chairman of the board of directors or of the supervisory 
board, and the majority of the members of those boards are nationals of 
an ATPDEA beneficiary country and of which, in the case of a company, at 
least 50 percent of the capital is owned by an ATPDEA beneficiary 
country or by public bodies or nationals of an ATPDEA beneficiary 
country;
    (d) Of which the master and officers are nationals of an ATPDEA 
beneficiary country; and
    (e) Of which at least 75 percent of the crew are nationals of an 
ATPDEA beneficiary country.
    HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the United 
States.
    Preferential treatment. ``Preferential treatment'' means entry, or 
withdrawal from warehouse for consumption, in the customs territory of 
the United States free of duty and free of any quantitative restrictions 
in the case of tuna described in Sec. 10.253(a)(1)

[[Page 221]]

and free of duty in the case of any article described in Sec. 
10.253(a)(2).
    United States vessel. ``United States vessel'' means a vessel having 
a certificate of documentation with a fishery endorsement under chapter 
121 of title 46 of the United States Code.



Sec. 10.253  Articles eligible for preferential treatment.

    (a) General. Preferential treatment applies to any of the following 
articles, provided that the article in question is imported directly 
into the customs territory of the United States from an ATPDEA 
beneficiary country within the meaning of paragraph (b) of this section:
    (1) Tuna that is harvested by United States vessels or ATPDEA 
beneficiary country vessels, that is prepared or preserved in any 
manner, in an ATPDEA beneficiary country, in foil or other flexible 
airtight containers weighing with their contents not more than 6.8 
kilograms each; and
    (2) Any of the following articles that the President has determined 
are not import-sensitive in the context of imports from ATPDEA 
beneficiary countries, provided that the article in question meets the 
country of origin and value content requirements set forth in paragraphs 
(c) and (d) of this section:
    (i) Footwear not designated on December 4, 1991, as eligible 
articles for the purpose of the Generalized System of Preferences (GSP) 
under Title V, Trade Act of 1974, as amended (19 U.S.C. 2461 through 
2467);
    (ii) Petroleum, or any product derived from petroleum, provided for 
in headings 2709 and 2710 of the HTSUS;
    (iii) Watches and watch parts (including cases, bracelets, and 
straps), of whatever type including, but not limited to, mechanical, 
quartz digital or quartz analog, if those watches or watch parts contain 
any material which is the product of any country with respect to which 
HTSUS column 2 rates of duty apply; and
    (iv) Handbags, luggage, flat goods, work gloves, and leather wearing 
apparel that were not designated on August 5, 1983, as eligible articles 
for purposes of the GSP.
    (b) Imported directly defined. For purposes of paragraph (a) of this 
section, the words ``imported directly'' mean:
    (1) Direct shipment from any ATPDEA beneficiary country to the 
United States without passing through the territory of any country that 
is not an ATPDEA beneficiary country;
    (2) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an ATPDEA 
beneficiary country, the articles in the shipment do not enter into the 
commerce of any country that is not an ATPDEA beneficiary country while 
en route to the United States and the invoices, bills of lading, and 
other shipping documents show the United States as the final 
destination; or
    (3) If the shipment is from any ATPDEA beneficiary country to the 
United States through the territory of any country that is not an ATPDEA 
beneficiary country, and the invoices and other documents do not show 
the United States as the final destination, the articles in the shipment 
upon arrival in the United States are imported directly only if they:
    (i) Remained under the control of the customs authority of the 
intermediate country;
    (ii) Did not enter into the commerce of the intermediate country 
except for the purpose of sale other than at retail, and the port 
director is satisfied that the importation results from the original 
commercial transaction between the importer and the producer or the 
producer's sales agent; and
    (iii) Were not subjected to operations other than loading or 
unloading, and other activities necessary to preserve the articles in 
good condition.
    (c) Country of origin criteria--(1) General. Except as otherwise 
provided in paragraph (c)(2) of this section, an article described in 
paragraph (a)(2) of this section may be eligible for preferential 
treatment if the article is either:
    (i) Wholly the growth, product, or manufacture of an ATPDEA 
beneficiary country; or
    (ii) A new or different article of commerce which has been grown, 
produced, or manufactured in an ATPDEA beneficiary country.

[[Page 222]]

    (2) Exceptions. No article will be eligible for preferential 
treatment by virtue of having merely undergone simple (as opposed to 
complex or meaningful) combining or packaging operations, or mere 
dilution with water or mere dilution with another substance that does 
not materially alter the characteristics of the article. The principles 
and examples set forth in Sec. 10.195(a)(2) will apply equally for 
purposes of this paragraph.
    (d) Value content requirement--(1) General. An article may be 
eligible for preferential treatment only if the sum of the cost or value 
of the materials produced in an ATPDEA beneficiary country or countries, 
plus the direct costs of processing operations performed in an ATPDEA 
beneficiary country or countries, is not less than 35 percent of the 
appraised value of the article at the time it is entered.
    (2) Commonwealth of Puerto Rico, U.S. Virgin Islands and CBI 
beneficiary countries. For the specific purpose of determining the 
percentage referred to in paragraph (d)(1) of this section, the term 
``ATPDEA beneficiary country'' includes the Commonwealth of Puerto Rico, 
the U.S. Virgin Islands, and any CBI beneficiary country as defined in 
Sec. 10.191(b)(1). Any cost or value of materials or direct costs of 
processing operations attributable to the Virgin Islands or any CBI 
beneficiary country must be included in the article prior to its final 
exportation to the United States from an ATPDEA beneficiary country as 
defined in Sec. 10.252.
    (3) Materials produced in the United States. For purposes of 
determining the percentage referred to in paragraph (d)(1) of this 
section, an amount not to exceed 15 percent of the appraised value of 
the article at the time it is entered may be attributed to the cost or 
value of materials produced in the customs territory of the United 
States (other than the Commonwealth of Puerto Rico). The principles set 
forth in paragraph (d)(4)(i) of this section will apply in determining 
whether a material is ``produced in the customs territory of the United 
States'' for purposes of this paragraph.
    (4) Cost or value of materials--(i) ``Materials produced in an 
ATPDEA beneficiary country or countries'' defined. For purposes of 
paragraph (d)(1) of this section, the words ``materials produced in an 
ATPDEA beneficiary country or countries'' refer to those materials 
incorporated in an article which are either:
    (A) Wholly the growth, product, or manufacture of an ATPDEA 
beneficiary country or two or more ATPDEA beneficiary countries; or
    (B) Substantially transformed in any ATPDEA beneficiary country or 
two or more ATPDEA beneficiary countries into a new or different article 
of commerce which is then used in any ATPDEA beneficiary country as 
defined in Sec. 10.252 in the production or manufacture of a new or 
different article which is imported directly into the United States. For 
purposes of this paragraph (d)(4)(i)(B), no material will be considered 
to be substantially transformed into a new or different article of 
commerce by virtue of having merely undergone simple (as opposed to 
complex or meaningful) combining or packaging operations, or mere 
dilution with water or mere dilution with another substance that does 
not materially alter the characteristics of the article. The examples 
set forth in Sec. 10.196(a), and the principles and examples set forth 
in Sec. 10.195(a)(2), will apply for purposes of the corresponding 
context under paragraph (d)(4)(i) of this section.
    (ii) Failure to establish origin. If the importer fails to maintain 
adequate records to establish the origin of a material, that material 
may not be considered to have been grown, produced, or manufactured in 
an ATPDEA beneficiary country or in the customs territory of the United 
States for purposes of determining the percentage referred to in 
paragraph (d)(1) of this section.
    (iii) Determination of cost or value of materials. (A) The cost or 
value of materials produced in an ATPDEA beneficiary country or 
countries or in the customs territory of the United States includes:
    (1) The manufacturer's actual cost for the materials;
    (2) When not included in the manufacturer's actual cost for the 
materials, the freight, insurance, packing, and all other costs incurred 
in transporting the materials to the manufacturer's plant;

[[Page 223]]

    (3) The actual cost of waste or spoilage, less the value of 
recoverable scrap; and
    (4) Taxes and/or duties imposed on the materials by any ATPDEA 
beneficiary country or by the United States, provided they are not 
remitted upon exportation.
    (B) Where a material is provided to the manufacturer without charge, 
or at less than fair market value, its cost or value will be determined 
by computing the sum of:
    (1) All expenses incurred in the growth, production, or manufacture 
of the material, including general expenses;
    (2) An amount for profit; and
    (3) Freight, insurance, packing, and all other costs incurred in 
transporting the material to the manufacturer's plant.
    (5) Direct costs of processing operations--(i) Items included. For 
purposes of paragraph (d)(1) of this section, the words ``direct costs 
of processing operations'' mean those costs either directly incurred in, 
or which can be reasonably allocated to, the growth, production, 
manufacture, or assembly of the specific merchandise under 
consideration. Those costs include, but are not limited to the 
following, to the extent that they are includable in the appraised value 
of the imported merchandise:
    (A) All actual labor costs involved in the growth, production, 
manufacture, or assembly of the specific merchandise, including fringe 
benefits, on-the-job training, and the cost of engineering, supervisory, 
quality control, and similar personnel;
    (B) Dies, molds, tooling, and depreciation on machinery and 
equipment which are allocable to the specific merchandise;
    (C) Research, development, design, engineering, and blueprint costs 
insofar as they are allocable to the specific merchandise; and
    (D) Costs of inspecting and testing the specific merchandise.
    (ii) Items not included. For purposes of paragraph (d)(1) of this 
section, the words ``direct costs of processing operations'' do not 
include items which are not directly attributable to the merchandise 
under consideration or are not costs of manufacturing the product. These 
include, but are not limited to:
    (A) Profit; and
    (B) General expenses of doing business which either are not 
allocable to the specific merchandise or are not related to the growth, 
production, manufacture, or assembly of the merchandise, such as 
administrative salaries, casualty and liability insurance, advertising, 
and salesmen's salaries, commissions, or expenses.
    (6) Articles wholly the growth, product, or manufacture of an ATPDEA 
beneficiary country. Any article which is wholly the growth, product, or 
manufacture of an ATPDEA beneficiary country as defined in Sec. 10.252, 
and any article produced or manufactured in an ATPDEA beneficiary 
country as defined in Sec. 10.252 exclusively from materials which are 
wholly the growth, product, or manufacture of an ATPDEA beneficiary 
country or countries, will normally be presumed to meet the requirement 
set forth in paragraph (d)(1) of this section.



Sec. 10.254  Certificate of Origin.

    A Certificate of Origin as specified in Sec. 10.256 must be 
employed to certify that an article described in Sec. 10.253(a) being 
exported from an ATPDEA beneficiary country to the United States 
qualifies for the preferential treatment referred to in Sec. 10.251. 
The Certificate of Origin must be prepared by the exporter in the ATPDEA 
beneficiary country. Where the ATPDEA beneficiary country exporter is 
not the producer of the article, that exporter may complete and sign a 
Certificate of Origin on the basis of:
    (a) Its reasonable reliance on the producer's written representation 
that the article qualifies for preferential treatment; or
    (b) A completed and signed Certificate of Origin for the article 
voluntarily provided to the exporter by the producer.



Sec. 10.255  Filing of claim for preferential treatment.

    (a) Declaration. In connection with a claim for preferential 
treatment for an

[[Page 224]]

article described in Sec. 10.253(a), the importer must make a written 
declaration that the article qualifies for that treatment. The written 
declaration should be made by including on the entry summary, or 
equivalent documentation, the symbol ``J+'' as a prefix to the 
subheading of the HTSUS in which the article in question is classified. 
Except in any of the circumstances described in Sec. 10.256(d)(1), the 
declaration required under this paragraph must be based on a complete 
and properly executed original Certificate of Origin that covers the 
article being imported and that is in the possession of the importer.
    (b) Corrected declaration. If, after making the declaration required 
under paragraph (a) of this section, the importer has reason to believe 
that a Certificate of Origin on which a declaration was based contains 
information that is not correct, the importer must 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 
will be effected by submission of a letter or other written statement to 
the Customs port where the declaration was originally filed.



Sec. 10.256  Maintenance of records and submission of Certificate by 
importer.

    (a) Maintenance of records. Each importer claiming preferential 
treatment for an article under Sec. 10.255 must maintain in the United 
States, in accordance with the provisions of part 163 of this chapter, 
all records relating to the importation of the article. Those records 
must include the original Certificate of Origin referred to in Sec. 
10.255(a) and any other relevant documents or other records as specified 
in Sec. 163.1(a) of this chapter.
    (b) Submission of Certificate. An importer who claims preferential 
treatment on an article under Sec. 10.255(a) must provide, at the 
request of the port director, a copy of the Certificate of Origin 
pertaining to the article. A Certificate of Origin submitted to Customs 
under this paragraph:
    (1) Must be on Customs Form 449, including privately-printed copies 
of that Form, or, as an alternative to Customs Form 449, in an approved 
computerized format or other medium or format as is approved by the 
Office of Field Operations, U.S. Customs Service, Washington, DC 20229. 
An alternative format must contain the same information and 
certification set forth on Customs Form 449;
    (2) Must be signed by the exporter or by the exporter's authorized 
agent having knowledge of the relevant facts;
    (3) Must be completed either in the English language or in the 
language of the country from which the article is exported. If the 
Certificate is completed in a language other than English, the importer 
must provide to Customs upon request a written English translation of 
the Certificate; and
    (4) May be applicable to:
    (i) A single importation of an article 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 articles into the United 
States that occur within a specified blanket period, not to exceed 12 
months, set out in the Certificate by the exporter. For purposes of this 
paragraph, ``identical articles'' means articles that are the same in 
all material respects, including physical characteristics, quality, and 
reputation.
    (c) Correction and nonacceptance of Certificate. If the port 
director determines that a Certificate of Origin is illegible or 
defective or has not been completed in accordance with paragraph (b) of 
this section, the importer will be given a period of not less than five 
working days to submit a corrected Certificate. A Certificate will not 
be accepted in connection with subsequent importations during a period 
referred to in paragraph (b)(4)(ii) of this section if the port director 
determined that a previously imported identical article covered by the 
Certificate did not qualify for preferential treatment.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer is not 
required to have a Certificate of Origin in his possession for:

[[Page 225]]

    (i) An importation of an article 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 article qualifies for 
preferential treatment;
    (ii) A non-commercial importation of an article; or
    (iii) A commercial importation of an article whose value 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 article covered by this shipment qualifies 
for preferential tariff treatment under the ATPDEA.
    Check One:

( ) Producer
( ) Exporter
( ) Importer
( ) Agent

----------------------------------
Name

----------------------------------
Title

----------------------------------
Address

----------------------------------
Signature and Date

    (2) Exception. If the port director determines that an importation 
described 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 Certificate of Origin 
requirement under Sec. Sec. 10.254 through 10.256, the port director 
will 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 treatment. The importer will have 30 
calendar days from the date of the written notice to obtain a valid 
Certificate of Origin, and a failure to timely obtain the Certificate of 
Origin will result in denial of the claim for preferential treatment. 
For purposes of this paragraph, a ``series of importations'' means two 
or more entries covering articles arriving on the same day from the same 
exporter and consigned to the same person.



Sec. 10.257  Verification and justification of claim for preferential 
treatment.

    (a) Verification by Customs. A claim for preferential treatment made 
under Sec. 10.255, including any statements or other information 
contained on a Certificate of Origin submitted to Customs under Sec. 
10.256, will be subject to whatever verification the port director deems 
necessary. In the event that the port director for any reason is 
prevented from verifying the claim, the port director may deny the claim 
for preferential treatment. A verification of a claim for preferential 
treatment may involve, but need not be limited to, a review of:
    (1) All records required to be made, kept, and made available to 
Customs by the importer or any other person under part 163 of this 
chapter;
    (2) Documentation and other information regarding the country of 
origin of an article and its constituent materials, including, but not 
limited to, production records, information relating to the place of 
production, the number and identification of the types of machinery used 
in production, and the number of workers employed in production; and
    (3) Evidence to document the use of U.S. or ATPDEA beneficiary 
country materials in the production of the article in question, such as 
purchase orders, invoices, bills of lading and other shipping documents, 
and customs import and clearance documents.
    (b) Importer requirements. In order to make a claim for preferential 
treatment under Sec. 10.255, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the article qualifies for preferential treatment. Those 
records must include documents that support a claim that the article in 
question qualifies for preferential treatment because it meets the 
country of origin and value content requirements set forth in Sec. 
10.253(c) and (d). A properly completed Certificate of Origin in the 
form prescribed in Sec. 10.254(b) is a record that would serve this 
purpose;
    (2) Must establish and implement internal controls which provide for 
the periodic review of the accuracy of the Certificate of Origin or 
other records

[[Page 226]]

referred to in paragraph (b)(1) of this section;
    (3) Must have shipping papers that show how the article moved from 
the ATPDEA beneficiary country to the United States. If the imported 
article was shipped through a country other than an ATPDEA beneficiary 
country and the invoices and other documents from the ATPDEA beneficiary 
country do not show the United States as the final destination, the 
importer also must have documentation that demonstrates that the 
conditions set forth in Sec. 10.253(b)(3)(i) through (iii) were met; 
and
    (4) Must be prepared to explain, upon request from Customs, how the 
records and internal controls referred to in paragraphs (b)(1) through 
(b)(3) of this section justify the importer's claim for preferential 
treatment.



           Subpart G_United States-Canada Free Trade Agreement

    Source: Sections 10.301 through 10.311 issued by T.D. 89-3, 53 FR 
51766, Dec. 23, 1988, unless otherwise noted.



Sec. 10.301  Scope and applicability.

    The provisions of Sec. Sec. 10.302 through 10.311 of this part 
relate to the procedures for obtaining duty preferences on imported 
goods under the United States-Canada Free-Trade Agreement (the 
Agreement) entered into on January 2, 1988, and the United States-Canada 
Free-Trade Agreement Implementation Act of 1988 (102 Stat. 1851). The 
United States and Canada agreed to suspend operation of the Agreement 
with effect from January 1, 1994, to coincide with the entry into force 
of the North American Free Trade Agreement (see part 181 of this 
chapter) and, accordingly, the provisions of Sec. Sec. 10.302 through 
10.311 of this part apply only to goods imported from Canada that were 
entered for consumption, or withdrawn from warehouse for consumption, 
during the period January 1, 1989, through December 31, 1993. In 
situations involving goods subject to bilateral restrictions or 
prohibitions, or country of origin marking, other criteria for 
determining origin may be applicable pursuant to Article 407 of the 
Agreement.

[T.D. 96-35, 61 FR 19835, May 3, 1996]



Sec. 10.302  Eligibility criteria in general.

    Subject to the more specific explanations of the criteria in 
Sec. Sec. 10.303 and 10.305 of this part, goods classifiable under an 
HTSUS heading or subheading for which the symbol ``CA'' appears in the 
``special'' column are eligible for a preference if:
    (a) Originating goods. The goods originate in Canada or the United 
States, or both, and
    (b) Direct shipment required. Except as provided in Sec. 10.306(b), 
are directly shipped to the United States from Canada.



Sec. 10.303  Originating goods.

    (a) General. For purposes of eligibility for a preference under the 
Agreement, goods may be regarded as originating goods if:
    (1) Wholly of Canadian or United States origin. The goods are wholly 
obtained or produced in the Territory of Canada or the United States, or 
both, as set forth in General Note 3(c), HTSUS;
    (2) Transformed with a change in classification. The goods have been 
transformed by a processing which results in a change in classification 
and, if required, a sufficient value-content, as set forth in General 
Note 3(c), HTSUS; or
    (3) Transformed without a change in classification. An assembly of 
goods, other than goods of chapters 61 to 63 of the HTSUS, which does 
not result in a change in classification because the goods were imported 
in an unassembled or disassembled form and classified as the goods, 
unassembled or disassembled, pursuant to General Rule of Interpretation 
2(a), HTSUS, or because the tariff subheading for the goods provides for 
both the goods themselves and their parts, shall nonetheless be treated 
as originating goods if:
    (i) The value of originating materials and the direct cost of 
assembling in Canada or the United States, or both, as defined in Sec. 
10.305 constitute not less than 50 percent of the value of the goods 
when exported to the United States;

[[Page 227]]

    (ii) The assembled goods are not subsequently processed or further 
assembled in a third country; and
    (iii) The goods satisfy the requirement in Sec. 10.306.
    (b) Originating materials. For purposes of this section and Sec. 
10.305, the term ``materials'' means goods, other than those included as 
part of the direct cost of processing or assembling, used or consumed in 
the production of other goods, and the term ``orginating'' when used 
with reference to such materials means that the materials satisfy one of 
the criteria for originating goods set forth in paragraph (a) of this 
section.
    (c) Change in classification. For purposes of paragraph (a) of this 
section, the expression ``change in classification'' means a change of 
classification within the Harmonized Commodity Description and Coding 
System (Harmonized System) as published and amended from time to time by 
the Customs Cooperation Council.
    (d) Articles of feather. The goods are eligible to be treated as 
originating in Canada pursuant to General Note 3(c)(vii)(R)(12)(ee), 
HTSUS.

[T.D. 92-8, 57 FR 2453, Jan. 22, 1992]



Sec. 10.304  Exclusions.

    (a) Changes based on simple processing. No goods shall be considered 
originating for purposes of eligibility under the Agreement if they have 
merely undergone simple packaging or simple combining operations, or 
have undergone mere dilution with water or with another substance that 
does not materially alter the characteristics of the goods.
    (b) Other excluded processing. No goods shall be considered to be 
originating merely by virtue of having undergone any process or work in 
which the facts clearly justify the presumption that the sole object was 
to circumvent the provisions of Chapter 3 of the Agreement.



Sec. 10.305  Value content requirement.

    (a) Direct cost of processing or assembling.
    (1) Definition. For purposes of applying a specific rule of origin 
under the Agreement which requires a value content determination, the 
terms ``direct cost of processing'' and ``direct cost of assembling'' 
mean the costs directly incurred in, or that can be reasonably allocated 
to, the production of goods, including:
    (i) The cost of all labor, including benefits and on-the-job 
training, labor provided in connection with supervision, quality 
control, shipping, receiving, storage, packaging, management at the 
location of the process or assembly, and other like labor, whether 
provided by employees or independent contractors;
    (ii) The cost of inspecting and testing the goods;
    (iii) The cost of energy, fuel, dies, molds, tooling, and the 
depreciation and maintenance of machinery and equipment, without regard 
to whether they originate within the territory of the United States or 
Canada;
    (iv) Development, design, and engineering costs;
    (v) Rent, mortgage interest, depreciation on buildings, property 
insurance premiums, maintenance, taxes and the cost of utilities for 
real property used in the production of the goods; and
    (vi) Royalty, licensing, or other like payments for the right to the 
goods.
    (2) Exclusions from direct costs of processing or assembling. 
Excluded from the direct costs of processing or assembling are:
    (i) Costs relating to the general expense of doing business, such as 
the cost of providing executive, financial, sales, advertising, 
marketing, accounting and legal services, and insurance;
    (ii) Brokerage charges relating to the importation and exportation 
of goods;
    (iii) Costs for telephone, mail, and other means of communication;
    (iv) Packing costs for exporting the goods;
    (v) Royalty payments related to a licensing agreement to distribute 
or sell the goods;
    (vi) Rent, mortgage interest, depreciation on buildings, property 
insurance premiums, maintenance, taxes, and the cost of utilities for 
real property used by personnel charged with administrative functions; 
and
    (vii) Profit on the goods.
    (3) Interpretation--(i) Indirect materials. Under the definition of 
``materials'' set forth in Sec. 10.303(b), certain types of materials 
are treated as direct

[[Page 228]]

costs of processing or assembling under paragraph (a) of this section. 
This applies principally to materials used or consumed indirectly in the 
production of exported goods, where no portion of those materials is 
physically incorporated in the exported goods. In addition to the items 
specified in paragraph (a)(1)(iii) of this section, such materials 
include items such as gloves and safety glasses worn by production 
workers, tape used in painting processes, and tools, materials and spare 
parts used in the repair and maintenance of machinery and equipment used 
in the production of the exported goods. Such materials are to be 
distinguished from waste and spoilage specified in paragraph 
(b)(1)(ii)(C) of this section, which relate to materials that are 
physically incorporated in the exported goods.
    (ii) Directly incurred. In order for costs incurred by a production 
facility to be treated as direct costs of processing or assembling, 
those costs must be directly incurred in the production of the exported 
goods and not merely associated with the production facility as 
peripheral costs necessary to operate the facility. In addition to the 
exclusions set forth in paragraph (a)(2) of this section, such 
peripheral costs include labor costs for nurses tending to employees, 
for accounting personnel involved in physical inventory taking, for 
personnel responsible for purchasing or requisitioning materials to be 
used or consumed in the production process, and for second level 
supervisors and above who are not directly involved in the production 
process.
    (iii) Labor costs. Under paragraph (a)(1)(i) of this section, labor 
costs includable as direct costs of processing or assembling are limited 
to labor provided by the producer's employees or by independent 
contractors. Thus, for example, where processing operations are 
performed on components in the United States and those components are 
sold to a manufacturer in Canada where they are incorporated in goods 
exported to the United States, the cost of those processing operations 
in the United States cannot be separately counted as a direct cost of 
processing attributable to the finished goods exported to the United 
States.
    (iv) Interest expense. Bona fide interest payments on debt of any 
form, secured or unsecured, undertaken on arm's length terms in the 
ordinary course of business to finance the acquisition of fixed assets 
such as real property, a plant, and/or equipment used in the production 
of goods in the territory of Canada or the U.S. are includable in the 
direct cost of processing or direct cost of assembling. Interest will be 
treated as a direct cost of processing or assembling, but only that 
portion of the interest which is related to a fixed asset directly used 
in the production of the goods exported; thus, where a entire production 
facility is covered by a mortgage and incorporates both production and 
administrative or other general expense space, an appropriate allocation 
must be made in order to ensure that only that portion of the interest 
allocated to the production area is counted toward the value-content 
requirement. Interest expenses attributable to general and 
administrative costs or expenses, including interest on funds borrowed 
to meet the payroll of personnel directly involved in the production of 
goods, are not considered direct costs of processing or assembly.
    (b) Value of originating materials--(1) Definition. The term ``value 
of materials originating in the United States or Canada or both'' means 
the aggregate of:
    (i) The price paid by the producer of exported goods for materials 
originating in either the United States or Canada, or both, or for 
materials imported from a third country used or consumed in the 
production of such originating materials; and
    (ii) When not included in that price, the following costs related 
thereto:
    (A) Freight, insurance, packing and all other costs incurred in 
transporting any of the materials referred to in paragraph (b)(1)(i) of 
this section to the location of the producer;
    (B) Duties, taxes and brokerage fees on such materials paid in the 
United States, or Canada, or both;
    (C) The cost of waste or spoilage resulting from the use or 
consumption of such materials, less the value of renewable scrap or by-
product; and
    (D) The value of goods and services relating to such materials 
determined

[[Page 229]]

in accordance with subparagraph 1(b) of Article 8 of the Agreement on 
Implementation of Article VII of the General Agreement on Tariffs and 
Trade.
    (2) Directly attributable. Whenever a value-content determination is 
required by the rules of the Agreement and whenever originating 
materials and materials obtained or produced in a third country are used 
or consumed together in the production of goods in the United States or 
Canada, the value of originating materials may be treated as such only 
to the extent that the value is directly attributable to the goods under 
consideration.
    (3) Interpretation. (i) Price paid. As provided in paragraph (b)(1) 
of this section, the ``price paid'' for materials by the producer of 
exported goods forms the basis for determining the value of such 
materials when incorporated in the exported goods. The actual price paid 
for such materials will determine the value of those materials for 
purposes of the value-content requirement, even though a relationship 
between the producer and the seller of the materials may have influenced 
the price, except where the price did not include items specified in 
paragraph (b)(1)(ii) of this section that relate to the materials. The 
following examples will illustrate these principles. Notwithstanding 
these examples, the totality of the facts must be examined in each case 
to determine whether Sec. 10.304(b) is applicable.

    Example 1. Non-originating materials are sold by Company X (a 
foreign corporation located outside the United States or Canada) to 
Company Y (a Canadian corporation) for $100; Company X also sold 
identical materials to Company Z (a U.S. corporation) for $200 which was 
the price Company Z had paid to Company X for similar materials prior to 
implementation of the Agreement; and those non-originating materials 
sold by Company X to Company Y are then incorporated by Company Y into 
goods exported to the United States. In this case the $100 price paid by 
Company Y to Company X constitutes the value of those materials for 
purposes of the value-content requirement.
    Example 2. Company X purchased materials for $100, added a four 
percent mark-up to the price paid to defray purchasing expenses, and 
then sold the marked-up materials to Company Y (a Canadian corporation) 
which incorporated the materials in goods exported to the United States. 
In this case the $104 price paid by Company Y to Company X constitutes 
the value of the materials for purposes of the value-content 
requirement.
    Example 3. Company X (a foreign corporation located outside the 
United States) sold non-originating materials to Company Y (a U.S. 
corporation) for $200, and Company Y then sold those materials for $100 
to Company Z (a Canadian corporation) which incorporated the materials 
in goods which were imported into the United States by Company P (the 
U.S. parent company of Company Y). In this case, in accordance with 
paragraph (b)(1)(ii)(D) of this section, $100 would be added to the 
price paid by Company Z for purposes of the value-content requirement 
because the materials were sold at a reduced cost within the meaning of 
subparagraph 1(b) of Article 8 of the Agreement on Implementation of 
Article VII of the General Agreement on Tariffs and Trade.

    (ii) Originating materials for which no price paid. In cases 
involving a vertically integrated producer (that is, an entity which 
produces goods for export from materials which that producer has also 
made) a ``price paid'' for such originating materials normally does not 
exist. Even in the absence of a ``price paid'', such a vertically 
integrated producer may still claim the materials as originating 
materials for purposes of qualifying the finished goods exported to the 
United States as goods originating in Canada. However, under paragraph 
(b)(1)(i) of this section the value of those materials for purposes of 
applying the value-content requirement is limited to the price paid for 
those materials imported from the third country plus any costs added 
thereto under paragraph (b)(1)(ii) of this section. The following 
examples will illustrate these principles.

    Example 1. If an automobile producer in the United States or Canada 
fabricates body panels wholly from third country steel coil, those body 
panels can qualify as originating materials without having to satisfy a 
value-content requirement because steel coil is classified in chapter 72 
of the Harmonized System and body panels are classified in chapter 87 
and the change in classification rules in chapter 87 do not incorporate 
a value-content requirement in this context. Thus, the producer can 
claim the body panels fabricated from the third country steel as 
originating materials for purposes of the value-content requirement 
applicable to the finished automobile which will be exported to the 
United States. The value of those originating materials is the price 
paid for

[[Page 230]]

the steel coil imported from the third country and used or consumed in 
the production of the body panels.
    Example 2. An automobile exporter in Canada purchases and imports 
body panels fabricated in a third country in order to join them with 
vertically (locally) fabricated body panels to form an automobile body. 
If the body qualifies as an originating material, the exporter has two 
options. Under the first option, the exporter can claim the body as 
originating material, in which case the value of originating material is 
the price paid for the foreign body panels. Under the second option, the 
exporter may elect not to claim the body as originating material; but, 
rather, the exporter may claim as originating material any domestic 
steel coil used in producing the vertically (locally) fabricated body 
panels, in which case the value of originating material is the price 
paid for the domestic steel coil.

    (c) Value of goods when exported. The term ``value of the goods when 
exported to the United States'' means the aggregate of:
    (1) The price paid by the producer for all materials, whether or not 
the materials originate in the United States, or Canada, or both, and, 
when not included in the price paid for the materials, the following 
costs related thereto:
    (i) Freight, insurance, packing, and all other costs incurred in 
transporting all materials to the location of the producer;
    (ii) Duties, taxes, and brokerage fees on all materials paid in the 
United States, or Canada, or both;
    (iii) The cost of waste or spoilage resulting from the use or 
consumption of such materials, less the value of renewable scrap or by-
product; and
    (iv) The value of goods and services relating to all materials 
determined in accordance with subparagraph 1(b) of Article 8 of the 
Agreement on Implementation of Article VII of the General Agreement on 
Tariffs Trade; and
    (2) The direct cost of processing or the direct cost of assembling 
the goods.

[T.D. 92-8, 57 FR 2453, Jan. 22, 1992; 57 FR 4793, Feb. 7, 1992, as 
amended by T.D. 92-98, 57 FR 46504, Oct. 9, 1992]



Sec. 10.306  Direct shipment to the United States.

    Goods shall be considered as directly shipped to the United States 
from Canada for the purpose of eligibility for preferences under the 
Agreement only under the following circumstances:
    (a) Through shipment. The goods have been shipped directly from 
Canada to the United States without passage through the territory of any 
third country; or
    (b) Shipment through a third country. The goods were shipped through 
the territory of a third country but:
    (1) The goods did not enter the commerce of any third country;
    (2) The goods did not undergo any operation other than unloading, 
reloading, or any operation necessary to transport them to the United 
States or to preserve them in good condition; and
    (3) All shipping and export documents show the United States as the 
final destination.



Sec. 10.307  Documentation.

    (a) Claims for a preference. A preference in accordance with the 
Agreement may be claimed by including on the entry summary, or 
equivalent documentation, the symbol ``CA'' as a prefix to the 
subheading of the HTSUS under which each eligible good is classified.
    (b) Failure to claim a preference. Failure to make a timely claim 
for a preference under the Agreement will result in liquidation at the 
rate which would otherwise be applicable.
    (c) Documentation showing origin. A claim for a preference under the 
Agreement shall be based on the Exporter's Certificate of Origin, 
properly completed and signed by the person who exports or knowingly 
causes the goods to be exported from Canada. The Exporter's Certificate 
of Origin must be available at the time the preference is claimed and 
shall be presented to the port director upon request.
    (d) Exporter's Certificate of Origin--(1) General. The Exporter's 
Certificate of Origin shall be prepared on Customs Form 353. In lieu of 
the Customs Form 353, the exporter may use an approved computerized 
format or such other format as is approved by the Headquarters, U.S. 
Customs Service, Office of Trade Operations, Washington, DC 20229. 
Alternative formats must contain the same information and certification 
set forth on Customs Form 353.

[[Page 231]]

    (2) Blanket certifications. A blanket Exporter's Certificate of 
Origin, not to exceed a period of 12 months, issued for goods claimed as 
originating goods under the Agreement, can only be used if the 
certifying exporter is able to verify that the goods in each shipment to 
be covered by the blanket certification actually qualify for treatment 
under the Agreement. A blanket certification does not allow an exporter 
to average its costs over the blanket certification period in order to 
establish that the exported goods meet the criteria for originating 
goods under the Agreement. Under Sec. 10.308, the exporter must retain 
supporting records that will permit a review of the eligibility of the 
goods in each shipment covered by a blanket certification.
    (e) Exceptions to documentation requirements. Exceptions to the 
foregoing documentation requirements may be authorized at the discretion 
of the port director in the following circumstances:
    (1) Exception for informal entries. As set forth in paragraphs 
(e)(1) (i) and (ii) of this section, an Exporter's Certificate of Origin 
may be waived in connection with an entry entitled to informal entry 
procedures as authorized in Sec. Sec. 143.21 and 143.22 of this chapter 
if:
    (i) Commercial goods which qualify for informal entry. The invoice, 
or an appropriate Customs release document, for commercial goods which 
qualify both for informal entry and a preference must include the 
following statement, on the invoice or appropriate Customs document:

    I hereby certify that the goods described herein are eligible for a 
preference based upon the rules of origin enumerated in the United 
States-Canada Free-Trade Agreement.
    Check One:

( ) Manufacturer
( ) Supplier
( ) Exporter
________________________________________________________________________
Signature
________________________________________________________________________
Title
Date:___________________________________________________________________

    (ii) Noncommercial goods which qualify for informal entry. The 
importation of goods from Canada by a person for noncommercial use may 
be exempt from documentation requirements if the goods are legally 
marked ``Made in Canada'', or it can otherwise be shown that they are 
originating goods under the Agreement and there is no evidence to the 
contrary.
    (2) Waiver of evidence of direct shipment. The port director may 
waive the submission of evidence of direct shipment when otherwise 
satisfied, taking into consideration the kind and value of the goods, 
that the goods were, in fact, imported directly from Canada, and that 
they otherwise qualify for a preference in accordance with the 
Agreement.

[T.D. 89-3, 53 FR 51766, Dec. 23, 1988, as amended by T.D. 92-8, 57 FR 
2455, Jan. 22, 1992]



Sec. 10.308  Records retention.

    (a) Importer. The importer of record shall retain the exporter's 
certificate of origin required by Sec. 10.307(d) for a period of 5 
years and it must be made available upon request by the appropriate 
Customs official.
    (b) Exporter. Any person who exports, or who knowlingly causes to be 
exported, any merchandise to Canada shall make, keep, and render for 
examination and inspection, such records (including certifications of 
origin or copies thereof), which pertain to such exportation for a 
period of 5 years from the date of exportation. In the event that the 
appropriate Customs official requests submission of the records, they 
shall be submitted directly to the requesting official.



Sec. 10.309  Verification of documentation.

    Any evidence of country of origin or of direct shipment submitted in 
support of a preference under the Agreement shall be subject to such 
verification as the appropriate Customs official may deem necessary. If 
the U.S. importer or U.S. exporter or their agent does not provide the 
information requested by the appropriate Customs officer, the port 
director may refuse to grant the claim for preference, in addition to 
other available sanctions.

[[Page 232]]



Sec. 10.310  Election to average for motor vehicles.

    (a) Election. In determining whether a motor vehicle is originating 
for purposes of the preferences under the Agreement or a Canadian 
article under the Automotive Products Trade Act of 1965 (APTA), a 
manufacturer may elect to average, over its 12-month financial year, its 
calculation of the value-content requirement for vehicles of the same 
class or sister vehicles which are assembled in the same plant as 
provided for in the Agreement. A manufacturer must declare its election 
to average before the importation of any vehicles produced within the 
identified 12-month period. The election to average is subject to the 
conditions and requirements set forth in Sec. Sec. 10.310 and 10.311.
    (b) Effect of election. An election to average shall be binding at 
the time of the first entry of vehicles for which the election has been 
made and shall remain binding for the plant for the entire period 
covered by the election. If a manufacturer's annual report, required by 
Sec. 10.311, does not verify the claim that the vehicles are 
originating goods under the Agreement or Canadian articles under APTA, 
or if a manufacturer otherwise fails to comply with the reporting 
requirements, entries of the vehicles identified in the averaging 
declaration will be subject to liquidation in accordance with the rate 
of duty which would otherwise apply.
    (c) Election in lieu of certificate of origin. In lieu of the 
Exporter's Certificate of Origin required in Sec. 10.307(c), an 
importer of vehicles covered by an election to average under this 
section may have its claim for preference based on a copy of the 
declaration of election.

[T.D. 89-3, 53 FR 51766, Dec. 23, 1988, as amended by T.D. 92-8, 57 FR 
2455, Jan. 22, 1992]



Sec. 10.311  Documentation for election to average for motor vehicles.

    A manufacturer who elects to average for motor vehicles shall submit 
a declaration of election to average, quarterly reports, and an annual 
report in the form and manner as follows:
    (a) Declaration of election. A declaration of election to average, 
signed by an authorized company official, shall be submitted by the 
manufacturer to the U.S. Customs Service, Regulatory Audit Division, 
Detroit, Michigan 48226-2568 on Customs Form 355, Declaration of 
Election to Average.
    (b) Quarterly Report. A quarterly report shall be submitted to the 
Regulatory Audit Division, at the above address, on Customs Form 356, 
Vehicle Cost Report (Quarterly), within 30 days after the end of each 
quarter. In lieu of the Customs Form 356, the manufacturer may submit 
the information required on the form in an approved computerized format 
or such other format as is approved by the U.S. Customs Service, 
Regulatory Audit Division, Detroit, Michigan 48226-2568. Alternative 
formats must contain the same information set forth on the Customs Form 
356. Negative quarterly reports are required.
    (c) Annual Report. An annual report shall be submitted to the U.S. 
Customs Service, Regulatory Audit Division, Detroit, Michigan 48226-
2568, on Customs Form 357, Vehicle Cost Report (Annual), within 90 days 
of the end of the financial year identified in the Election to Average, 
Customs Form 355. In lieu of the Customs Form 357, Vehicle Cost Report 
(Annual), the manufacturer may submit the information required on the 
form in an approved computerized format or such other format as is 
approved by the U.S. Customs Service, Regulatory Audit Division, 
Detroit, Michigan 48226-2568. Alternative formats must contain the same 
information set forth on Customs Form 357.



           Subpart H_United States-Chile Free Trade Agreement

    Source: CBP Dec. 05-07, 70 FR 10873, Mar. 7, 2005, unless otherwise 
noted.

                           General Provisions



Sec. 10.401  Scope.

    This subpart implements the duty preference and related customs 
provisions applicable to imported goods under the United States-Chile 
Free Trade Agreement (the US-CFTA) entered into on June 6, 2003, and 
under the United States-Chile Free Trade Agreement Implementation Act 
(the

[[Page 233]]

Act; 117 Stat. 909). Except as otherwise specified in this subpart, the 
procedures and other requirements set forth in this subpart are in 
addition to the customs procedures and requirements of general 
application contained elsewhere in this chapter. Additional provisions 
implementing certain aspects of the US-CFTA and the Act are contained in 
parts 12, 24, 162, 163 and 191 of this chapter.



Sec. 10.402  General definitions.

    As used in this subpart, the following terms will 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 section of this subpart:
    (a) Certification. ``Certification'' means, either when used by 
itself or in the expression ``certification of origin'', the 
certification established under article 4.13 of the US-CFTA, that a good 
qualifies as an originating good under the US-CFTA;
    (b) Claim of origin. ``Claim of origin'' means a claim that a 
textile or apparel good is an originating good or a good of a Party;
    (c) Claim for preferential tariff treatment. ``Claim for 
preferential tariff treatment'' means a claim that a good is entitled to 
the duty rate applicable under the US-CFTA to an originating good;
    (d) Customs authority. ``Customs authority'' means the competent 
authority that is responsible under the law of a Party for the 
administration of customs laws and regulations;
    (e) Customs Valuation Agreement. ``Customs Valuation Agreement'' 
means the Agreement on Implementation of Article VII of the General 
Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
    (f) Days. ``Days'' means calendar days;
    (g) Customs duty. ``Customs duty'' includes 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, but, for purposes of implementing the US-CFTA, does 
not include any:
    (1) Charge equivalent to an internal tax imposed consistently with 
Article III:2 of the GATT 1994; in respect of like, directly 
competitive, or substitutable goods of the Party, 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; and
    (3) Fee or other charge in connection with importation commensurate 
with the cost of services rendered;
    (h) Enterprise. ``Enterprise'' means any entity constituted or 
organized under applicable law, whether or not for profit, and whether 
privately-owned or governmentally-owned, including any corporation, 
trust, partnership, sole proprietorship, joint venture, or other 
association;
    (i) GATT 1994. ``GATT 1994'' means the General Agreement on Tariffs 
and Trade 1994, which is part of the WTO Agreement;
    (j) Goods. ``Goods'' means domestic products as these are understood 
in the GATT 1994 or such goods as the Parties may agree, and includes 
originating goods of that Party. A good of a Party may include materials 
of other countries;
    (k) Harmonized System. ``Harmonized System (HS)'' means the 
Harmonized Commodity Description and Coding System, including its 
General Rules of Interpretation, Section Notes, and Chapter Notes, as 
adopted and implemented by the Parties in their respective tariff laws;
    (l) Heading. ``Heading'' means the first four digits in the tariff 
classification number under the Harmonized System;
    (m) HTSUS. ``HTSUS'' means the Harmonized Tariff Schedule of the 
United States as promulgated by the U.S. International Trade Commission;
    (n) Indirect material. ``Indirect material'' means a good used in 
the production, testing, or inspection of a good in the territory of the 
United States or Chile 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 in the territory of 
the United States or Chile, including--
    (1) Fuel and energy;

[[Page 234]]

    (2) Tools, dies, and molds;
    (3) Spare parts and materials used in the maintenance of equipment 
and buildings;
    (4) Lubricants, greases, compounding materials, and other materials 
used in production or used to operate equipment and buildings;
    (5) Gloves, glasses, footwear, clothing, safety equipment, and 
supplies;
    (6) Equipment, devices, and supplies used for testing or inspecting 
the goods;
    (7) Catalysts and solvents; and
    (8) Any other goods that are not incorporated into the good but 
whose use in the production of the good can reasonably be demonstrated 
to be a part of that production;
    (o) National. ``National'' means a natural person who has the 
nationality of a Party according to Annex 2.1 of the US-CFTA or a 
permanent resident of a Party;
    (p) Originating. ``Originating'' means qualifying under the rules of 
origin set out in Chapter Four (Rules of Origin and Origin Procedures) 
of the US-CFTA;
    (q) Party. ``Party'' means the United States or the Republic of 
Chile;
    (r) Person. ``Person'' means a natural person or an enterprise;
    (s) Preferential tariff treatment. ``Preferential tariff treatment'' 
means the duty rate applicable under the US-CFTA to an originating good;
    (t) Subheading. ``Subheading'' means the first six digits in the 
tariff classification number under the Harmonized System;
    (u) Tariff preference level. ``Tariff preference level'' means a 
quantitative limit for certain non-originating textiles and textile 
apparel goods that may be entitled to preferential tariff treatment as 
if such goods were originating based on the goods meeting the production 
requirements set forth in Sec. 10.421 of this subpart.
    (v) Textile or apparel good. ``Textile or apparel good'' means a 
good listed in the Annex to the Agreement on Textiles and Clothing 
(commonly referred to as ATC), which is part of the WTO Agreement;
    (w) Territory. ``Territory'' means:
    (1) With respect to Chile, the land, maritime and air space under 
its sovereignty, and the exclusive economic zone and the continental 
shelf within which it exercises sovereign rights and jurisdiction in 
accordance with international law and its domestic law; and
    (2) With respect to 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;
    (x) WTO Agreement. ``WTO Agreement'' means the Marrakesh Agreement 
Establishing the World Trade Organization of April 15, 1994.

                           Import Requirements



Sec. 10.410  Filing of claim for preferential tariff treatment upon 
importation.

    (a) Declaration. In connection with a claim for preferential tariff 
treatment for an originating good under the US-CFTA, the U.S. importer 
must make a written declaration that the good qualifies for such 
treatment. The written declaration is made by including on the entry 
summary, or equivalent documentation, the symbol ``CL'' as a prefix to 
the subheading of the HTSUS under which each qualifying good is 
classified, or by the method specified for equivalent reporting via 
electronic interchange.
    (b) Corrected declaration. If, after making the declaration required 
under paragraph (a) of this section, the U.S. importer has reason to 
believe that the declaration or the certification on which the 
declaration was based contains information that is not correct, the 
importer must, within 30 calendar days after the date of discovery of 
the error, make a corrected declaration, submit a letter or other 
written statement to the CBP office where the original declaration was 
filed specifying the correction and pay any duties that may be due.

[[Page 235]]



Sec. 10.411  Certification of origin.

    (a) Contents. An importer who claims preferential tariff treatment 
on a good must submit, at the request of the port director, a 
certification that the good qualifies as originating. A certification 
submitted to CBP under this paragraph:
    (1) Need not be in a prescribed format but must be in writing or 
must be transmitted electronically pursuant to any electronic means 
authorized by CBP for that purpose;
    (2) Must include the following information:
    (i) The legal name, address, telephone and e-mail address of the 
importer of record of the good (if known);
    (ii) The legal name, address, telephone and e-mail address of the 
exporter of the good (if different from the producer);
    (iii) The legal name, address, telephone and e-mail address of the 
producer of the good (if known);
    (iv) A description of the good, which must be sufficiently detailed 
to relate it to the invoice and the HS nomenclature;
    (v) The HTSUS tariff classification, to six or more digits, as 
necessary for the specific change in tariff classification rule for the 
good set forth in General Note 26(n), HTSUS;
    (vi) The preference criterion as set forth in paragraph (e) of this 
section;
    (vii) For multiple shipments of identical goods, the blanket period 
in ``mm/dd/yyyy to mm/dd/yyyy'' format (12-month maximum); and
    (3) Must include a statement, in substantially the following form:

    ``I Certify that:
    The information on this document is true and accurate and I assume 
the responsibility for proving such representations. I understand that I 
am liable for any false statements or material omissions made on or in 
connection with this document;
    I agree to maintain, and present upon request, documentation 
necessary to support this certification, and to inform, in writing, all 
persons to whom the certification was given of any changes that could 
affect the accuracy or validity of this certification; and
    The goods originated in the territory of one or more of the parties, 
and comply with the origin requirements specified for those goods in the 
United States-Chile Free Trade Agreement; there has been no further 
production or any other operation outside the territories of the 
parties, other than unloading, reloading, or any other operation 
necessary to preserve it in good condition or to transport the good to 
the United States; and
    This document consists of -------- pages, including all 
attachments.''

    (b) Responsible official or agent. The certification required to be 
submitted under paragraph (a) of this section must be signed and dated 
by a responsible official of the importer; exporter; producer; or by the 
importer's, exporter's, or producer's authorized agent having knowledge 
of the relevant facts. If the person making the certification is not the 
producer of the good, or the producer's authorized agent, the person may 
sign the certification of origin based on:
    (1) A certification that the good qualifies as originating issued by 
the producer; or
    (2) Knowledge of the exporter or importer that the good qualifies as 
an originating good.
    (c) Language. The certification must be completed either in the 
English or Spanish language. If the certification is completed in 
Spanish, the importer must also provide to the port director, upon 
request, a written English translation of the certification.
    (d) Applicability of certification. A certification may be 
applicable to:
    (1) 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
    (2) Multiple importations of identical goods into the United States 
that occur within a specified blanket period, not exceeding 12 months, 
set out in the certification. For purposes of this paragraph, 
``identical goods'' means goods that are the same in all respects 
relevant to the production that qualifies the goods as originating.
    (e) Preference criteria. The preference criterion to be included on 
the certification as required in paragraph (a)(2)(vi) of this section is 
as follows:
    (1) Preference criterion ``A'', refers to a good that is wholly 
obtained or produced entirely in the territory of Chile or of the United 
States, or both (see General Note 26(b)(i), HTSUS);

[[Page 236]]

    (2) Preference criterion ``B'', refers to a good that is produced 
entirely in the territory of Chile or the United States, or both (see 
General Note 26(b)(ii), HTSUS), and
    (i) Each of the non-originating materials used in the production of 
the good undergoes an applicable change in tariff classification 
specified in General Note 26(n), HTSUS, or
    (ii) The good otherwise satisfies any applicable regional value 
content or other requirements specified in General Note 26(n), HTSUS;
    (3) Preference criterion ``C'' refers to a good that is produced 
entirely in the territory of Chile or the United States, or both, 
exclusively from originating materials (see General Note 26(b)(iii), 
HTSUS).



Sec. 10.412  Importer obligations.

    (a) General. An importer who makes a declaration under Sec. 
10.410(a) is responsible for the truthfulness of the declaration and of 
all the information and data contained in the certification, for 
submitting any supporting documents requested by CBP, and for the 
truthfulness of the information contained in those documents.
    (b) Compliance. In order to make a claim for preferential treatment 
under Sec. 10.410 of this subpart, the importer:
    (1) Must have records that explain how the importer came to the 
conclusion that the good qualifies for preferential treatment. Those 
records must include documents that support a claim that the article in 
question qualifies for preferential treatment because it meets the 
applicable rules of origin set forth in General Note 26, HTSUS, and in 
this subpart. Those records may include a properly completed 
certification as set forth in Sec. 10.411 of this subpart; and
    (2) May be required to demonstrate that the conditions set forth in 
Sec. 10.463 of this subpart were met if the imported article was 
shipped through an intermediate country.
    (c) Information provided by exporter or producer. The fact that the 
importer has issued a certification based on information provided by the 
exporter or producer will not relieve the importer of the responsibility 
referred to in paragraph (a) of this section. A U.S. importer who 
voluntarily makes a corrected declaration will not be subject to 
penalties for having made an incorrect declaration (see Sec. 10.481 of 
this subpart).
    (d) Internal controls. In accordance with Part 163 of this chapter, 
importers are expected to establish and implement internal controls 
which provide for the periodic review of the accuracy of the 
certifications or other records referred to in paragraph (b)(1) of this 
section.



Sec. 10.413  Validity of certification.

    A certification that is completed, signed and dated in accordance 
with the requirements listed in Sec. 10.411 will be accepted by CBP as 
valid for four years from the date on which the certification was 
signed. If the port director determines that a certification is 
illegible or defective or has not been completed in accordance with 
Sec. 10.411, the importer will be given a period of not less than five 
business days to submit a corrected certification.



Sec. 10.414  Certification not required.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, an importer will not be required to submit a certification that 
the good qualifies for preferential tariff treatment for:
    (1) A non-commercial importation of a good; or
    (2) A commercial importation of a good whose value does not exceed 
U.S. $2,500, or the equivalent amount in Chilean currency.
    (b) Exception. If the port director determines that an importation 
described in paragraph (a) of this section may reasonably be considered 
to have been carried out or planned for the purpose of evading 
compliance with the rules and procedures governing claims for preference 
under the US-CFTA, the port director will notify the importer in writing 
that for that importation the importer must submit to CBP a valid 
certification that the good qualifies as originating. The importer must 
submit such a certification within 30 calendar days from the date of the 
written notice. Failure to timely submit the certification or 
information

[[Page 237]]

will result in denial of the claim for preferential tariff treatment.



Sec. 10.415  Maintenance of records.

    (a) General. An importer claiming preferential treatment for a good 
imported into the United States must maintain in the United States, for 
five years after the date of importation of the good, a certification 
(or a copy thereof) that the good qualifies as originating, and any 
records and documents that the importer has relating to the origin of 
the good, including records and documents associated with:
    (1) The purchase of, cost of, value of, and payment for, the good;
    (2) Where appropriate, the purchase of, cost of, value of, and 
payment for, all materials, including recovered goods and indirect 
materials, used in the production of the good; and,
    (3) Where appropriate, the production of the good in the form in 
which the good was exported.
    (b) Method of maintenance. The records referred to in paragraph (a) 
of this section must be maintained by importers as provided in Sec. 
163.5 of this chapter.



Sec. 10.416  Effect of noncompliance; failure to provide documentation 
regarding transshipment.

    (a) Effect of noncompliance. If the importer fails to comply with 
any requirement under this subpart, including submission of a 
certification of origin under Sec. 10.411(a) or submission of a 
corrected certification under Sec. 10.413, 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 subpart 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 Chile or the 
United States, and the importer of the good does not provide, at the 
request of the port director, copies of documents demonstrating to the 
satisfaction of the port director that the requirements set forth in 
Sec. 10.463 were met.

                         Tariff Preference Level



Sec. 10.420  Filing of claim for tariff preference level.

    A cotton or man-made fiber fabric or apparel good described in Sec. 
10.421 that does not qualify as an originating good under Sec. 10.451 
may nevertheless be entitled to preferential tariff treatment under the 
US-CFTA under an applicable tariff preference level (TPL). To make a TPL 
claim, the importer must include on the entry summary, or equivalent 
documentation, the applicable subheading in Chapter 99 of the HTSUS 
(9911.99.20 for a good described in Sec. 10.421(a) or (b) or 9911.99.40 
for a good described in Sec. 10.421(c)) immediately above the 
applicable subheading in Chapter 52 through 62 of the HTSUS under which 
each non-originating cotton or man-made fiber fabric or apparel good is 
classified.



Sec. 10.421  Goods eligible for tariff preference claims.

    The following goods are eligible for a TPL claim filed under Sec. 
10.420:
    (a) Woven fabrics. Certain woven fabrics of Chapters 52, 54 and 55 
of the HTS (Headings 5208 to 5212; 5407 and 5408; 5512 to 5516) that 
meet the applicable conditions for preferential tariff treatment under 
the US-CFTA other than the condition that they are originating goods, if 
they are wholly formed in the U.S. or Chile regardless of the origin of 
the yarn used to produce these fabrics.
    (b) Cotton or man-made fabric goods. Certain cotton or man-made 
fabric goods of Chapters 58 and 60 of the HTS that meet the applicable 
conditions for preferential tariff treatment under the US-CFTA other 
than the condition that they are originating goods if they are wholly 
formed in the U.S. or Chile regardless of the origin of the fibers used 
to produce the spun yarn or the yarn used to produce the fabrics.\1\
---------------------------------------------------------------------------

    \1\ The relevant HTS subheadings for fabric goods in Chapters 58 or 
60 eligible under HTS 9911.99.20 are as follows: 5801.21, 5801.22, 
5801.23, 5801.24, 5801.25, 5801.26, 5801.31, 5801.32, 5801.33, 5801.34, 
5801.35, 5801.36, 5802.11, 5802.19, 5802.20.0020, 5802.30.0030, 5803.10, 
5803.90.30, 5804.10.10, 5804.21, 5804.29.10, 5804.30.0020, 5805.00.30, 
5805.00.4010, 5806.10.10, 5806.10.24, 5806.10.28, 5806.20, 5806.31, 
5806.32, 5807.10.05, 5807.10.2010, 5807.10.2020, 5807.90.05, 
5807.90.2010, 5807.90.2020, 5808.10.40, 5808.10.70, 5808.90.0010, 
5809.00, 5810.10, 5810.91, 5810.92, 5811.00.20, 5811.00.30, 6001.10, 
6001.21, 6001.22, 6001.91, 6001.92, 6002.40, 6002.90, 6003.20, 6003.30, 
6003.40, 6004.10, 6004.90, 6005.21, 6005.22, 6005.23, 6005.24, 6005.31, 
6005.32, 6005.33, 6005.34, 6005.41, 6005.42, 6005.43, 6005.44, 6006.21, 
6006.22, 6006.23, 6006.24, 6006.31, 6006.32, 6006.33, 6006.34, 6006.41, 
6006.42, 6006.43, 6006.44.

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

[[Page 238]]

    (c) Cotton or man-made apparel goods. Cotton or man-made apparel 
goods in Chapters 61 and 62 of the HTS that are both cut (or knit-to-
shape) and sewn or otherwise assembled in the U.S. or Chile regardless 
of the origin of the fabric or yarn, provided that they meet the 
applicable conditions for preferential tariff treatment under the US-
CFTA, other than the condition that they are originating goods.



Sec. 10.422  Submission of certificate of eligibility.

    (a) Contents. An importer who claims preferential tariff treatment 
on a non-originating cotton or man-made fiber fabric or apparel good 
must submit, at the request of the port director, a certificate of 
eligibility containing information demonstrating that the good satisfies 
the requirements for entry under the applicable TPL, as set forth in 
Sec. 10.421. A certificate of eligibility submitted to CBP under this 
section:
    (1) Need not be in a prescribed format but must be in writing or 
must be transmitted electronically pursuant to any electronic means 
authorized by CBP for that purpose;
    (2) Must include the following information:
    (i) The legal name, address, telephone and e-mail address of the 
importer of record of the good;
    (ii) The legal name, address, telephone and e-mail address of the 
exporter of the good (if different from the producer);
    (iii) The legal name, address, telephone and e-mail address of the 
producer of the good (if known);
    (iv) A description of the good, which must be sufficiently detailed 
to relate it to the invoice and the HS nomenclature;
    (v) The HTSUS tariff classification of the good, to six or more 
digits, as well as the applicable subheading in Chapter 99 of the HTSUS 
(9911.99.20 or 9911.99.40);
    (vi) For a single shipment, the commercial invoice number;
    (vii) For multiple shipments of identical goods, the blanket period 
in ``mm/dd/yyyy to mm/dd/yyyy'' format (12-month maximum); and
    (3) Must include a statement, in substantially the following form:

    ``I Certify that:
    The information on this document is true and accurate and I assume 
the responsibility for proving such representations. I understand that I 
am liable for any false statements or material omissions made on or in 
connection with this document;
    I agree to maintain and present upon request, documentation 
necessary to support this certificate, and to inform, in writing, all 
persons to whom the certificate was given of any changes that could 
affect the accuracy or validity of this certificate; and
    The goods were produced in the territory of one or more of the 
parties, and comply with the preference requirements specified for those 
goods in the United States-Chile Free Trade Agreement and Chapter 99, 
subchapter XI of the HTSUS. There has been no further production or any 
other operation outside the territories of the parties, other than 
unloading, reloading, or any other operation necessary to preserve it in 
good condition or to transport the good to the United States; and
    This document consists of ---- pages, including all attachments.''

    (b) Responsible official or agent. The certificate of eligibility 
required to be submitted under this section must be signed and dated by 
a responsible official of the importer or by the importer's authorized 
agent having knowledge of the relevant facts.
    (c) Language. The certificate of eligibility must be completed 
either in the English or Spanish language. If the certificate is 
completed in Spanish, the importer must also provide to the port 
director, upon request, a written English translation of the 
certificate;
    (d) Applicability of certificate of eligibility. A certificate of 
eligibility may be applicable to:
    (1) 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

[[Page 239]]

    (2) Multiple importations of identical goods into the United States 
that occur within a specified blanket period, not exceeding 12 months, 
set out in the certification. For purposes of this paragraph, 
``identical goods'' means goods that are the same in all respects 
relevant to the production that qualifies the goods for preferential 
tariff treatment under an applicable TPL.



Sec. 10.423  Certificate of eligibility not required.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, an importer will not be required to submit a certificate of 
eligibility for:
    (1) A non-commercial importation of a good; or
    (2) A commercial importation of a good whose value does not exceed 
U.S. $2,500, or the equivalent amount in Chilean currency.
    (b) Exception. If the port director determines that an importation 
described in paragraph (a) of this section may reasonably be considered 
to have been carried out or planned for the purpose of evading 
compliance with the rules and procedures governing TPL claims for 
preference under the US-CFTA, the port director will notify the importer 
in writing that for that importation the importer must submit to CBP a 
valid certificate of eligibility. The importer must submit such a 
certificate within 30 calendar days from the date of the written notice. 
Failure to timely submit the certificate will result in denial of the 
claim for preferential tariff treatment.



Sec. 10.424  Effect of noncompliance; failure to provide documentation 

regarding transshipment of non-originating cotton or man-made fiber 
fabric or apparel 
          goods.

    (a) Effect of noncompliance. If the importer fails to comply with 
any requirement under this subpart, including submission of a 
certificate of eligibility under Sec. 10.422, 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 subpart are met, the port director nevertheless may deny 
preferential tariff treatment to a good for which a TPL claim is made if 
the good is shipped through or transshipped in a country other than 
Chile or the United States, and the importer of the good does not 
provide, at the request of the port director, copies of documents 
demonstrating to the satisfaction of the port director that the 
requirements set forth in Sec. 10.425 were met.



Sec. 10.425  Transit and transshipment of non-originating cotton or 
man-made fiber fabric or apparel goods.

    (a) General. A good will not be considered eligible for preferential 
tariff treatment under an applicable TPL by reason of having undergone 
production that occurs entirely in the territory of Chile, the United 
States, or both, that would enable the good to qualify for preferential 
tariff treatment if subsequent to that production the good undergoes 
further production or any other operation outside the territories of 
Chile and the United States, other than unloading, reloading, or any 
other process necessary to preserve the good in good condition or to 
transport the good to the territory of Chile or the United States.
    (b) Documentary evidence. An importer making a claim for 
preferential tariff treatment may be required to demonstrate, to CBP's 
satisfaction, that no further production or subsequent operation, other 
than permitted under paragraph (a) of this section, occurred outside the 
territories of Chile or the United States. An importer may demonstrate 
compliance with this section by submitting documentary evidence. Such 
evidence may include, but is not limited to, bills of lading, packing 
lists, commercial invoices, and customs entry and exit documents.

                           Export Requirements



Sec. 10.430  Export requirements.

    (a) Submission of certification to CBP. An exporter or producer in 
the United States that signs a certification of origin for a good 
exported from the United States to Chile must provide a copy of the 
certification (or such other medium or format approved by the Chile 
customs authority for that purpose) to CBP upon request.

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    (b) Notification of errors in certification. An exporter or producer 
in the United States who has completed and signed a certification of 
origin, and who has reason to believe that the certification contains or 
is based on information that is not correct, must immediately after the 
date of discovery of the error notify in writing all persons to whom the 
certification was given by the exporter or producer of any change that 
could affect the accuracy or validity of the certification.
    (c) Maintenance of records--(1) General. An exporter or producer in 
the United States that signs a certification of origin for a good 
exported from the United States to Chile must maintain in the United 
States, for a period of at least five years after the date the 
certification was signed, all records and supporting documents relating 
to the origin of a good for which the certification was issued, 
including records and documents associated with:
    (i) The purchase of, cost of, value of, and payment for, the good;
    (ii) Where appropriate, the purchase of, cost of, value of, and 
payment for, all materials, including recovered goods and indirect 
materials, used in the production of the good; and
    (iii) Where appropriate, the production of the good in the form in 
which the good was exported.
    (2) Method of maintenance. The records referred to in paragraph (c) 
of this section must be maintained in accordance with the Generally 
Accepted Accounting Principles applied in the country of production and 
in the case of exporters or producers in the United States must be 
maintained in the same manner as provided in Sec. 163.5 of this 
chapter.
    (3) Availability of records. For purposes of determining compliance 
with the provisions of this part, the exporter's or producer's records 
required to be maintained under this section must be stored and made 
available for examination and inspection by the port director or other 
appropriate CBP officer in the same manner as provided in part 163 of 
this chapter.



Sec. 10.431  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(g) for failure to 
retain records required to be maintained under Sec. 10.430.

                   Post-Importation Duty Refund Claims



Sec. 10.440  Right to make post-importation claim and refund duties.

    Notwithstanding any other available remedy, 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 was made, 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. 10.441 of this part. 
Subject to the provisions of Sec. 10.416 of this part, CBP may refund 
any excess duties by liquidation or reliquidation of the entry covering 
the good in accordance with Sec. 10.442(c) of this part.



Sec. 10.441  Filing procedures.

    (a) Place of filing. A post-importation claim for a refund under 
Sec. 10.440 of this part must 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 must 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 or entries covering the good;
    (2) Subject to Sec. 10.413 of this part, a copy of a certification 
that the good qualifies for preferential tariff treatment;
    (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

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must identify each recipient by name, CBP identification number and 
address and must specify the date on which the documentation was 
provided; and
    (4) 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 must identify 
the protest, petition or request by number and date.



Sec. 10.442  CBP processing procedures.

    (a) Status determination. After receipt of a post-importation claim 
under Sec. 10.441 of this part, the port director will 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 will 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 will 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 will 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 
will reliquidate the entry taking into account the claim for refund 
under this subpart.
    (d) Denial of claim--(1) General. The port director may deny a claim 
for a refund filed under Sec. 10.441 of this part if the claim was not 
filed timely, if the importer has not complied with the requirements of 
Sec. 10.441 of this part, if the certification submitted under Sec. 
10.441(b)(2) of this part cannot be accepted as valid (see Sec. 10.413 
of this part), or if, following initiation of an origin verification 
under Sec. 10.470 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. 10.470 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 will deny 
the claim in connection with the liquidation of the entry, and written 
notice of the denial and the reason for the denial will be given to the 
importer.
    (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 will 
give written notice of the denial and the reason for the denial to the 
importer.

                             Rules of Origin



Sec. 10.450  Definitions.

    For purposes of Sec. Sec. 10.450 through 10.463:
    (a) Adjusted value. ``Adjusted value'' means the value determined in 
accordance with Articles 1 through 8, Article

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15, and the corresponding interpretative notes of the Customs Valuation 
Agreement, adjusted, if necessary, to exclude any costs, charges, 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 and the value of 
packing materials and containers for shipment as defined in Sec. 
10.450(m) of this subpart;
    (b) Exporter. ``Exporter'' means a person who exports goods from the 
territory of a Party;
    (c) Fungible goods or materials. ``Fungible goods or materials'' 
means goods or materials that are interchangeable for commercial 
purposes and whose properties are essentially identical;
    (d) Generally Accepted Accounting Principles. ``Generally Accepted 
Accounting Principles'' means the principles, rules, and procedures, 
including both broad and specific guidelines, that define the accounting 
practices accepted in the territory of a Party;
    (e) Good. ``Good'' means any merchandise, product, article, or 
material;
    (f) Goods wholly obtained or produced entirely in the territory of 
one or both of the Parties. ``Goods wholly obtained or produced entirely 
in the territory of one or both of the Parties'' means:
    (1) Mineral goods extracted in the territory of one or both of the 
Parties;
    (2) Vegetable goods, as such goods are defined in the Harmonized 
System, harvested in the territory of one or both of the Parties;
    (3) Live animals born and raised in the territory of one or both of 
the Parties;
    (4) Goods obtained from hunting, trapping, or fishing in the 
territory of one or both of the Parties;
    (5) Goods (fish, shellfish, and other marine life) taken from the 
sea by vessels registered or recorded with a Party and flying its flag;
    (6) Goods produced on board factory ships from the goods referred to 
in paragraph (f)(5) provided such factory ships are registered or 
recorded with that Party and fly its flag;
    (7) Goods taken by a Party or a person of a Party from the seabed or 
beneath the seabed outside territorial waters, provided that a Party has 
rights to exploit such seabed;
    (8) Goods taken from outer space, provided they are obtained by a 
Party or a person of a Party and not processed in the territory of a 
non-Party;
    (9) Waste and scrap derived from:
    (i) Production in the territory of one or both of the Parties, or
    (ii) Used goods collected in the territory of one or both of the 
Parties, provided such goods are fit only for the recovery of raw 
materials;
    (10) Recovered goods derived in the territory of a Party from used 
goods, and utilized in the Party's territory in the production of 
remanufactured goods; and
    (11) Goods produced in the territory of one or both of the Parties 
exclusively from goods referred to in paragraphs (f)(1) through (f)(10) 
of this section, or from their derivatives, at any stage of production;
    (g) Importer. ``Importer'' means a person who imports goods into the 
territory of a Party;
    (h) Issued. ``Issued'' means prepared by and, where required under a 
Party's domestic law or regulation, signed by the importer, exporter, or 
producer of the good;
    (i) Location of the producer. ``Location of the producer'' means 
site of production of a good;
    (j) Material. ``Material'' means a good that is used in the 
production of another good, including a part, ingredient, or indirect 
material;
    (k) Non-originating good. ``Non-originating good'' means a good that 
does not qualify as originating under this subpart;
    (l) Non-originating material. ``Non-originating material'' means a 
material that does not qualify as originating under this subpart;
    (m) Packing materials and containers for shipment. ``Packing 
materials and containers for shipment'' means the goods used to protect 
a good during its transportation to the United States, and does not 
include the packaging materials and containers in which a good is 
packaged for retail sale;
    (n) Producer. ``Producer'' means a person who engages in the 
production of a good in the territory of a Party;

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    (o) Production. ``Production'' means growing, mining, harvesting, 
fishing, raising, trapping, hunting, manufacturing, processing, 
assembling, or disassembling a good;
    (p) Recovered goods. ``Recovered goods'' means materials in the form 
of individual parts that are the result of:
    (1) The complete disassembly of used goods into individual parts; 
and
    (2) The cleaning, inspecting, testing, or other processing of those 
parts as necessary for improvement to sound working condition by one or 
more of the following processes: welding, flame spraying, surface 
machining, knurling, plating, sleeving, and rewinding in order for such 
parts to be assembled with other parts, including other recovered parts 
in the production of a remanufactured good of Annex 4.18, US-CFTA;
    (q) Remanufactured goods. ``Remanufactured goods'' means industrial 
goods assembled in the territory of a Party, listed in Annex 4.18, US-
CFTA, that:
    (1) Are entirely or partially comprised of recovered goods;
    (2) Have the same life expectancy and meet the same performance 
standards as new goods; and
    (3) Enjoy the same factory warranty as such new goods; and
    (r) Self-produced material. ``Self-produced material'' means a 
material that is produced by the producer of a good and used in the 
production of that good; and
    (s) Value. ``Value'' means the value of a good or material for 
purposes of calculating customs duties or for purposes of applying this 
subpart.



Sec. 10.451  Originating goods.

    A good imported into the customs territory of the United States will 
be considered an originating good under the US-CFTA only if:
    (a) The good is wholly obtained or produced entirely in the 
territory of Chile or of the United States, or both; or
    (b) The good is produced entirely in the territory of Chile or of 
the United States, or both, satisfies all other applicable requirements 
of this subpart, and
    (1) Each of the non-originating materials used in the production of 
the good undergoes an applicable change in tariff classification 
specified in General Note 26(n), HTSUS, and
    (2) The good otherwise satisfies any applicable regional value 
content or other requirements specified in General Note 26(n), HTSUS; or
    (c) The good is produced entirely in the territory of Chile or the 
United States, or both, exclusively from originating materials.



Sec. 10.452  Exclusions.

    A good will not be considered to be an originating good and a 
material will not be considered to be an originating material by virtue 
of having undergone:
    (a) Simple combining or packaging operations; or
    (b) Mere dilution with water or with another substance that does not 
materially alter the characteristics of the good or material.



Sec. 10.453  Treatment of textile and apparel sets.

    Notwithstanding the specific rules specified in General Note 26(n), 
HTSUS, textile and apparel goods classifiable as goods put up in sets 
for retail sale as provided for in General Rule of Interpretation 3, 
HTSUS, will not be regarded as originating goods unless each of the 
goods in the set is an originating good or the non-originating goods in 
the set do not exceed 10 percent of the adjusted value of the set.



Sec. 10.454  Regional value content.

    Where General Note 26, subdivision (n), HTSUS, sets forth a rule 
that specifies a regional value content test for a good, the regional 
value content of such good may be calculated, at the choice of the 
person claiming the tariff treatment authorized by this note for such 
good, on the basis of the build-down method or the build-up method 
described in this section, unless otherwise specified in the note.
    (a) Build-down method. For the build-down method, the regional value 
content must be calculated on the basis of the formula RVC = ((AV-VNM)/
AV) x 100, where RVC is the regional value content, expressed as a 
percentage; AV is the adjusted value; and VNM is the value of non-
originating materials used

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by the producer in the production of the good; or
    (b) Build-up method. For the build-up method, the regional value 
content must be calculated on the basis of the formula RVC = (VOM/AV) x 
100, where RVC is the regional value content, expressed as a percentage; 
AV is the adjusted value; and VOM is the value of originating materials 
used by the producer in the production of the good.



Sec. 10.455  Value of materials.

    (a) Calculating the regional value content. For purposes of 
calculating the regional value content of a good under General Note 
26(n), HTSUS, and for purposes of applying the de minimis (see Sec. 
10.459) provisions of subdivision (e) of the note, the value of a 
material is:
    (1) In the case of a material imported by the producer of the good, 
the adjusted value of the material;
    (2) In the case of a material acquired in the territory where the 
good is produced, except for a material to which paragraph (a)(3) of 
this section applies, the producer's price actually paid or payable for 
the material;
    (3) In the case of a material provided to the producer without 
charge, or at a price reflecting a discount or similar reduction, the 
sum of--
    (i) All expenses incurred in the growth, production or manufacture 
of the material, including general expenses, and
    (ii) A reasonable amount for profit; or
    (4) In the case of a material that is self-produced, the sum of--
    (i) All expenses incurred in the production of the material, 
including general expenses, and
    (ii) A reasonable amount for profit.
    (b) Adjustments to value. The value of materials may be adjusted as 
follows:
    (1) For originating materials, the following expenses, if not 
included under paragraph (a) of this section, may be added to the value 
of the originating material:
    (i) The costs of freight, insurance, packing and all other costs 
incurred in transporting the material within or between the territory of 
Chile, the United States, or both, to the location of the producer;
    (ii) Duties, taxes and customs brokerage fees on the material paid 
in the territory of Chile or of the United States, or both, other than 
duties and taxes that are waived, refunded, refundable or otherwise 
recoverable, including credit against duty or tax paid or payable; and
    (iii) The cost of waste and spoilage resulting from the use of the 
material in the production of the good, less the value of renewable 
scrap or by-product; and
    (2) For non-originating materials, if included under paragraph (a) 
of this section, the following expenses may be deducted from the value 
of the non-originating material:
    (i) The costs of freight, insurance, packing and all other costs 
incurred in transporting the material within or between the territory of 
Chile, the United States, or both, to the location of the producer;
    (ii) Duties, taxes and customs brokerage fees on the material paid 
in the territory of Chile or of the United States, or both, other than 
duties and taxes that are waived, refunded, refundable or otherwise 
recoverable, including credit against duty or tax paid or payable;
    (iii) The cost of waste and spoilage resulting from the use of the 
material in the production of the good, less the value of renewable 
scrap or by-products; and
    (iv) The cost of originating materials used in the production of the 
non-originating material in the territory of Chile or of the United 
States.
    (c) Accounting method. Any cost or value referenced in General Note 
26(n), HTSUS and this subpart, must be recorded and maintained in 
accordance with the generally accepted accounting principles applicable 
in the territory of the country in which the good is produced (whether 
Chile or the United States).



Sec. 10.456  Accessories, spare parts or tools.

    Accessories, spare parts or tools that form part of the good's 
standard accessories, spare parts or tools and are delivered with the 
good will be treated as a material used in the production of the good, 
if--

[[Page 245]]

    (a) The accessories, spare parts or tools are classified with and 
not invoiced separately from the good; and
    (b) The quantities and value of the accessories, spare parts or 
tools are customary for the good.



Sec. 10.457  Fungible goods and materials.

    (a) A person claiming preferential tariff treatment under the US-
CFTA for a good may claim that a fungible good or material is 
originating either based on the physical segregation of each fungible 
good or material or by using an inventory management method. For 
purposes of this subpart, the term ``inventory management method'' 
means--
    (1) Averaging,
    (2) ``Last-in, first-out,''
    (3) ``First-in, first-out,'' or
    (4) Any other method that is recognized in the generally accepted 
accounting principles of the country in which the production is 
performed (whether Chile or the United States) or otherwise accepted by 
that country.
    (b) A person selecting an inventory management method under 
paragraph (a) of this section for particular fungible goods or materials 
must continue to use that method for those fungible goods or materials 
throughout the fiscal year of that person.



Sec. 10.458  Accumulation.

    (a) Originating goods or materials of Chile or the United States 
that are incorporated into a good in the territory of the other country 
will be considered to originate in the territory of the other country 
for purposes of determining the eligibility of the goods or materials 
for preferential tariff treatment under the US-CFTA.
    (b) A good that is produced in the territory of Chile, the United 
States, or both, by one or more producers, will be considered as an 
originating good if the good satisfies the applicable requirements of 
Sec. 10.451 and General Note 26, HTSUS.



Sec. 10.459  De minimis.

    (a) Except as provided in paragraphs (b) and (c) of this section, a 
good that does not undergo a change in tariff classification pursuant to 
General Note 26(n), HTSUS, will nonetheless be considered to be an 
originating good if--
    (1) The value of all non-originating materials that are used in the 
production of the good and do not undergo the applicable change in 
tariff classification does not exceed 10