[Federal Register Volume 64, Number 66 (Wednesday, April 7, 1999)]
[Proposed Rules]
[Pages 16868-16870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8517]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 /
Proposed Rules
[[Page 16868]]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Customs Service
19 CFR PART 19
RIN 1515-AC41
Customs Bonded Warehouses
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This document proposes to amend the Customs Regulations
regarding the filing of certain inventory reports by bonded warehouse
proprietors. Instead of requiring that these reports be filed with
Customs, the document proposes that bonded warehouse proprietors
maintain these inventory reports after their preparation. In some
instances when the inventory report is prepared a letter must be
submitted to Customs certifying that the report has been prepared. As
proposed to be amended, the port director would be the Customs officer
to whom certification letters must be submitted and to whom the annual
report covering smelting or refining operations should be submitted.
These proposed changes and other changes proposed in this document are
intended to simplify inventory recordkeeping procedures for warehouse
proprietors and are consistent with Customs movement toward a post-
audit environment and the spirit of ``shared responsibility'' embodied
in the Customs Modernization provisions of the North American Free
Trade Agreement Implementation Act.
DATES: Comments must be received on or before June 7, 1999.
ADDRESSES: Written comments may be addressed to and inspected at the
Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue,
NW., 3rd Floor, Washington, D.C. 20229.
FOR FURTHER INFORMATION CONTACT: Edward Bowles, Senior Auditor,
Regulatory Audit Division, (202-927-0071).
SUPPLEMENTARY INFORMATION:
Background
This document proposes several amendments to part 19, Customs
Regulations (19 CFR part 19), concerning the submission to Customs of
certain inventory reports covering merchandise in a bonded warehouse.
Instead of requiring that certain reports be filed with Customs, the
document proposes to amend the Customs Regulations to require that
bonded warehouse proprietors maintain these inventory reports after
their preparation. In certain instances, when the inventory report is
prepared, a letter must be submitted to Customs certifying that the
report has been prepared. As proposed to be amended, the port director
would be the Customs officer to whom certification letters must be
submitted and to whom the annual report covering smelting or refining
operations should be submitted. These proposed changes and other
changes proposed in this document are intended to simplify inventory
recordkeeping procedures for warehouse proprietors and are consistent
with Customs movement toward a post-audit environment and the spirit of
``shared responsibility'' embodied in the Customs Modernization
provisions of the North American Free Trade Agreement Implementation
Act (Pub. L. 103-182).
Warehouse Proprietor's Submission
The principal change proposed in this document concerns the
Warehouse Proprietor's Submission on Customs Form (CF) 300. Currently,
Sec. 19.12(g) of the Customs Regulations requires certain bonded
warehouse proprietors to file annually the CF 300 with the field
director of regulatory audit within 45 days from the end of the
proprietor's business year. The CF 300 describes all merchandise in the
beginning and ending inventory and all merchandise covered by entries
opened and closed during the year which do not appear in the beginning
or ending inventory.
Section 19.12(g) also provides that these proprietors may submit an
alternative format concerning the inventory information required on the
CF 300 if the field director of regulatory audit first gives written
approval to use an alternative format.
Section 19.12(d)(3) requires, with certain exceptions, that duties
and taxes applicable to any non-extraordinary shortage of, or damage
to, merchandise in a warehouse be paid when the CF 300 is due, or at
any time prior to the annual filing of the CF 300 or certified annual
reconciliation.
This document proposes to amend Sec. 19.12(g) to no longer require
the submission of the CF 300 by these warehouse proprietors. The
proposed amendment would still require these warehouse proprietors to
prepare the CF 300 within 45 calendar days from the end of these
proprietors' business years; but instead of requiring these proprietors
to submit it to Customs within that time frame, the proposed amendment
would require these proprietors to retain the document and submit to
the port director within 10 days of the preparation of the CF 300 a
letter certifying that the CF 300 has been prepared, is available for
Customs review, and is accurate.
The document also proposes to amend Sec. 19.12(g) to provide that
these warehouse proprietors would no longer need Customs permission in
order to use an alternative format to the CF 300. Of course, under the
proposed amendment, if an alternative format is used, a similar letter
would need to be submitted to Customs within 10 days of the preparation
of the alternate format certifying that the alternate to the CF 300 has
been prepared, is available for Customs review and is accurate.
Section 19.12(d)(3) is proposed to be amended to provide that
duties and taxes applicable to any non-extraordinary shortage of, or
damage to, merchandise in a warehouse be reported to Customs no later
than the date the letter is due to Customs certifying that the CF 300
or alternate has been prepared.
Annual Reconciliation Report
Section 19.12(h)(1) concerns the requirement of certain other
warehouse proprietors to prepare an annual reconciliation report,
rather than the CF 300, and establishes the date by which the report
must be prepared. Section 19.12(h)(1) currently allows for these
warehouse proprietors to apply to the field director of regulatory
audit for an extension of time within which to prepare the report and
Sec. 19.12(h)(3) requires these proprietors to submit a letter to the
field director of regulatory
[[Page 16869]]
audit certifying that the annual reconciliation report has been
prepared.
This document proposes to amend Sec. 19.12(h)(1) to make port
directors, rather than field directors of regulatory audit, responsible
for approving extensions of time within which reconciliation reports
must be prepared. The document proposes to amend Sec. 19.12(h)(3) to
require that the certification letter be submitted to the port
director.
Smelting and Refining Warehouses
This document also proposes two changes regarding the submission of
inventory reports by bonded smelting and refining warehouses. One
proposed change concerns the filing of a monthly report and the other
concerns the filing of an annual report.
Section 19.17(g) currently provides that where two or more smelting
and refining warehouses are included under one blanket smelting and
refining bond, an overall monthly statement of inventory and bond
charges must be filed by the principal named in the bond with each
involved Field Director, Regulatory Audit, showing the inventory at
each plant covered by the bond. Furthermore, Sec. 19.17(g) provides
that each port director at whose port a plant or plants are located is
responsible for determining the correctness of the inventory report
covering merchandise at those plants under his jurisdiction.
As proposed to be amended by this document, Sec. 19.17(g) would no
longer require the proprietor named as principal in the bond to file
the monthly statement with any Field Director, Regulatory Audit, but
would instead require the proprietor to maintain the monthly statement
after its preparation. In addition, Sec. 19.17(g) would be changed to
make clear, as is currently the case, that if the warehouses covered by
an overall statement are located in more than one port, each port
director may choose to verify the accuracy of the inventory report only
with respect to that portion of the report that relates to amounts held
at a plant that is located within that port director's jurisdiction.
Section 19.19(b) currently requires that an annual report covering
the smelting or refining operations conducted by each manufacturer be
submitted to the Field Director, Regulatory Audit. As proposed to be
amended by this document, the regulations would no longer require the
annual report to be submitted to the Field Director, Regulatory Audit.
Instead, the annual report would be filed with the port director.
Other Amendments
Section 19.12(d)(3) currently refers to the filing of the annual
reconciliation when the filing of the annual reconciliation is not
required. Accordingly, this document proposes to remove the reference
to the filing of the annual reconciliation from that paragraph.
Also, Sec. 19.12(d)(3) currently includes a cross-reference to
paragraph (f) of that section in relation to the annual reconciliation
report. However, the annual reconciliation report is dealt with in
paragraph (h) of that section, not paragraph (f). Accordingly, this
document proposes to replace the cross-reference to paragraph (f) in
Sec. 19.12(d)(3) with a cross-reference to paragraph (h).
Comments
Before adopting the proposal, consideration will be given to any
written comments that are timely submitted to Customs. Customs
specifically requests comments on the clarity of this proposed rule and
how it may be made easier to understand. Comments submitted will be
available for public inspection in accordance with the Freedom of
Information Act (5 U.S.C. 552), Sec. 1.4, Treasury Department
Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs Regulations (19
CFR 103.11(b)), on regular business days between the hours of 9:00 a.m.
and 4:30 p.m. at the Regulations Branch, U.S. Customs Service, 1300
Pennsylvania Avenue, NW., 3rd Floor, Washington, D.C.
The Regulatory Flexibility Act and Executive Order 12866
The proposed amendments are intended to simplify inventory
recordkeeping procedures for warehouse proprietors and be consistent
with Customs movement toward a post-audit environment and the spirit of
``shared responsibility'' embodied in the Customs Modernization
provisions of the North American Free Trade Agreement Implementation
Act. As such, pursuant to the provisions of the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.), it is hereby certified that the proposed
rule, if adopted, will not have a significant economic impact on a
substantial number of small entities. Accordingly, it is not subject to
the regulatory analysis or other requirements of 5 U.S.C. 603 and 604.
Nor does the proposed rule result in a ``significant regulatory
action'' under E.O. 12866.
Paperwork Reduction Act
The collections of information contained in this notice of proposed
rulemaking have been previously reviewed and approved by the Office of
Management and Budget (OMB) in accordance with the Paperwork Reduction
Act of 1995 and assigned the following OMB control numbers: 1515-0093
for bonded warehouse proprietor's submission; 1515-0121 for information
to be supplied by owner or lessee in support of application to
establish a bonded warehouse facility; 1515-0127 for application by
manufacturer to bond (or discontinue a previously bonded) establishment
engaged in the smelting or refining of metal-bearing materials; and
1515-0135 for record of smelting or refining operation showing receipt
and disposition of each shipment of material. This document restates
the collections of information without substantive change.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control number assigned by OMB.
Although this document restates the collections of information
without substantive change, comments are specifically requested
concerning: (a) Whether the collections of information are necessary
for the proper performance of the functions of the agency, including
whether the information will have practical utility; (b) how to enhance
the quality, utility, and clarity of the information to be collected;
(c) how to minimize the burden of complying with the collections of
information, including through the application of automated collection
techniques or other forms of information technology; and (d) estimates
of capital or start-up costs and costs of operation, maintenance, and
purchase of services to provide information.
Comments concerning suggestions for reducing the burden of the
collections of information should be sent to the Regulations Branch,
Office of Regulations and Rulings, U.S. Customs Service, 1300
Pennsylvania Avenue, NW., 3rd Floor, Washington, D.C. 20229. A copy
should also be sent to U.S. Customs Service, Information Services
Group, Attention: J. Edgar Nichols, Room 3.2-C, 1300 Pennsylvania
Avenue, NW., Washington, D.C. 20229. Comments should be submitted
within the same time frame that comments are due regarding the
substance of the proposal.
[[Page 16870]]
List of Subjects in 19 CFR Part 19
Customs duties and inspection, Exports, Freight, Imports, Reporting
and recordkeeping requirements, Warehouses.
Proposed Amendments to the Regulations
It is proposed to amend part 19, Customs Regulations (19 CFR part
19), as set forth below.
PART 19--CUSTOMS WAREHOUSES, CONTAINER STATIONS, AND CONTROL OF
MERCHANDISE THEREIN
1. The general authority citation for part 19, and the relevant
sectional authority citation, would continue to read as follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 20,
Harmonized Tariff Schedule of the United States), 1624.
* * * * *
Sections 19.17-19.25 also issued under 19 U.S.C. 1312;
* * * * *
2. It is proposed to amend Sec. 19.12 by revising the seventh and
eighth sentences of paragraph (d)(3), by revising the first sentence of
paragraph (g), adding a sentence thereafter, and revising the last
sentence of paragraph (g), and by revising the first sentence,
respectively, of paragraphs (h)(1) and (h)(3), to read as follows:
Sec. 19.12 Inventory control and recordkeeping system.
* * * * *
(d) Accountability for merchandise in a warehouse. * * *
(3) Theft, shortage, overage or damage. * * * The proprietor must
also record all shortages and overages as required in the Customs Form
300 or annual reconciliation report under paragraph (g) or (h) of this
section, as appropriate. Duties and taxes applicable to any non-
extraordinary shortage or damage and not required to be paid earlier
must be reported and submitted to the port director no later than the
date the certification of preparation of Customs Form 300 is due or at
the time the certification of preparation of the annual reconciliation
report is due, as prescribed in paragraph (g) or (h) of this section. *
* *
* * * * *
(g) Warehouse proprietor submission. Except as otherwise provided
in paragraph (h) of this section or Sec. 19.19(b) of this part, the
warehouse proprietor must prepare a Warehouse Proprietor's Submission
on Customs Form (CF) 300 within 45 calendar days from the end of the
business year and maintain the Submission on file for 5 years from the
end of the business year covered by the Submission. The proprietor must
submit to the port director, within 10 business days after preparation
of the CF 300, a letter signed by the proprietor certifying that the CF
300 has been prepared, is available for Customs review, and is
accurate. * * * An alternative format may be used for providing the
information required on the CF 300.
(h) Annual reconciliation. * * *
(1) Report. Instead of preparing Customs Form 300 as required under
paragraph (g) of this section, the proprietor of a class 2, importers'
private bonded warehouse, and proprietors of classes 4, 5, 6, 7, 8, and
9 warehouses if the warehouse proprietor and the importer are the same
party, must prepare a reconciliation report within 90 days after the
end of the fiscal year unless the port director authorizes an extension
for reasonable cause. * * *
* * * * *
(3) Certification. The proprietor must submit to the port director
within 10 business days after preparation of the annual reconciliation
report, a letter signed by the proprietor certifying that the annual
reconciliation has been prepared, is available for Customs review, and
is accurate. * * *
* * * * *
3. It is proposed to amend Sec. 19.17 by revising the first and
second sentences of paragraph (g) to read as follows:
Sec. 19.17 Application to establish warehouse; bond.
* * * * *
(g) Statement of inventory and bond charges. Where two or more
smelting or refining warehouses are included under one blanket smelting
and refining bond, an overall statement must be prepared and maintained
by the principal named in the bond by the 28th of each month, showing
the inventory as of the close of the preceding month, of all metals on
hand at each plant covered by the blanket bond and the total of bonded
charges for all plants. If the warehouses covered by an overall
statement are located in more than one port, each port director may
choose to verify the accuracy of the inventory report only with respect
to that portion of the report that relates to amounts held at a plant
that is located within that port director's jurisdiction. * * *
4. It is proposed to amend Sec. 19.19 by revising the first
sentence of paragraph (b) to read as follows:
Sec. 19.19 Manufacturers' records; annual statement.
* * * * *
(b) Every manufacturer engaged in smelting or refining, or both,
must prepare and submit to the port director at the port nearest which
the plant is located an annual statement for the fiscal year for the
plant involved not later than 60 days after the termination of that
fiscal year. * * *
Raymond W. Kelly,
Commissioner of Customs.
Approved: March 12, 1999.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 99-8517 Filed 4-6-99; 8:45 am]
BILLING CODE 4820-02-P