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[Code of Federal Regulations]
[Title 19, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR125]

[Page 618-619]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 125--CARTAGE AND LIGHTERAGE OF MERCHANDISE--Table of Contents
 
Subpart D--Delivery and Receipt

Sec. 125.31  Documents used.

    When merchandise is carted or lightered to and received from a 
bonded store or bonded warehouse, it shall be accompanied by one of the 
following tickets or documents:
    (a) Customs Form 6043--Delivery Ticket.
    (b) Customs Form 7501, Entry Summary, annotated ``Permit''.
    (c) Customs Form 7512--Transportation Entry and Manifest of Goods 
Subject to Customs Inspection and Permit.

[T.D. 82-204, 47 FR 49375, Nov. 1, 1982, as amended by T.D. 84-129, 49 
FR 23167, June 5, 1984; T.D. 95-81, 60 FR 52295, Oct. 6, 1995]

Sec. 125.32  Merchandise delivered to a bonded store or bonded 
          warehouse.

    When merchandise is carried, carted or lightered to and received in 
a bonded store or bonded warehouse, the proprietor or his representative 
shall check the goods against the accompanying delivery ticket, Customs 
Form 6043, or copy of the permit, Customs Form 7501, and countersign the 
document acknowledging receipt of the merchandise as listed thereon. If 
the proprietor or his agent has been designated to carry the merchandise 
to his own bonded warehouse, he shall check the goods against the 
accompanying delivery ticket, Customs Form 6043, or copy of the permit, 
Customs Form 7501, at the time he picks up the cargo. Receipt of 
merchandise by a bonded warehouse proprietor for the purpose of 
transportation to his own warehouse constitutes receipt into a bonded 
warehouse.

[T.D. 94-81, 59 FR 51496, Oct. 12, 1994]

Sec. 125.33  Procedure on receiving merchandise.

    (a) From public or bonded store. A receipt shall be taken from the 
cartman, lighterman or bonded carrier for all goods delivered to him 
from public store or bonded store. The receipt may be taken on Customs 
Form 6043, or on the appraising officer's release ticket at the time 
delivery is made.
    (b) From bonded warehouse. In case of withdrawals from bonded 
warehouse,

[[Page 619]]

the merchandise shall be released only to the proprietor of the 
warehouse, who shall acknowledge such release on the appropriate 
withdrawal or removal document.
    (c) All other cases. A receipt shall be taken for all goods 
delivered from Customs custody in any other case where the port director 
deems such receipt necessary.

[T.D. 73-140, 38 FR 13554, May 23, 1973, as amended by T.D. 82-204, 47 
FR 49375, Nov. 1, 1982; T.D. 94-81, 59 FR 51496, Oct. 12, 1994]

Sec. 125.34  Countersigning of documents and notation of bad order or 
          discrepancy.

    When a cartman, lighterman, other bonded carrier, foreign trade zone 
operator, bonded warehouse proprietor, container station operator or 
centralized examination station operator, as provided for in Sec. 112.2, 
receives merchandise remaining in Customs custody, he shall countersign 
the appropriate document in the space provided and shall note thereon 
any bad order or discrepancy. When available, the importing carrier's 
tally slip for the merchandise shall be attached to the delivery ticket 
which accompanies the merchandise while it is being carted or lightered 
in bond, for the use of Customs officers only at destination.

[T.D. 73-140, 38 FR 13554, May 23, 1973, as amended by T.D. 94-81, 59 FR 
51496, Oct. 12, 1994]

Sec. 125.35  Report of loss, detention, or accident.

    Any loss or detention of bonded merchandise, or any accident 
happening to a vehicle or lighter while carrying bonded merchandise 
shall be immediately reported by the cartman, lighterman, qualified 
bonded carrier, foreign trade zone operator, bonded warehouse 
proprietor, container station operator or centralized examination 
station operator to the port director.

[T.D. 94-81, 59 FR 51496, Oct. 12, 1994]

Sec. 125.36  Inability to deliver merchandise.

    If the warehouse is closed or the warehouseman refuses to receive 
the merchandise, the cartman or bonded carrier shall notify the 
appropriate Customs inspector. The inspector shall promptly report the 
facts to the port director or his delegated representative for 
instructions. The merchandise shall then be returned to the Customs 
inspector, deposited in the public stores for safekeeping, or handled as 
ordered by the port director.

[T.D. 73-140, 38 FR 13554, May 23, 1973, as amended by T.D. 94-81, 59 FR 
51496, Oct. 12, 1994]



[Code of Federal Regulations]
[Title 19, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR19.9]

[Page 307-308]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 19--CUSTOMS WAREHOUSES, CONTAINER STATIONS AND CONTROL OF MERCHANDISE THEREIN--Table of Contents
 
Sec. 19.9  General order, abandoned, and seized merchandise.

    (a) Acceptance of merchandise. 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) is responsible 
for preparing a Customs Form (CF) 6043 (Delivery Ticket), or other 
similar Customs document as designated by the port director or an 
electronic equivalent as authorized by Customs, to cover the 
proprietor's receipt of 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). A joint 
determination will be made by the warehouse proprietor and the bonded 
carrier of the quantity and condition of the goods or articles so 
delivered to the warehouse. Within two working days of the joint 
determination, the warehouse proprietor will report to the port director 
any discrepancy between the quantity and condition of the goods and that 
reported on

[[Page 308]]

CF 6043, or other similar Customs document as designated by the port 
director or an electronic equivalent as authorized by Customs.
    (b) Recording and storing. General order, abandoned, and seized 
goods and articles shall be recorded and stored in the warehouse as 
prescribed by Sec. 19.12.
    (c) Release of merchandise. Merchandise in general order may be 
released by the warehouse proprietor, after Customs inspection or 
examination as ordered by the port director, to the person named in a 
release order under Sec. 141.11 of this chapter. The release may only be 
made by the proprietor upon presentation of a permit to release or 
delivery authorization signed by the appropriate Customs officer on 
Customs Form 3461, 7501, 368 or 368A or other Customs form as designated 
by the port director. General order goods which have been unclaimed 
under Sec. 127.11 of this chapter, voluntarily abandoned, or seized and 
forfeited may be released for transfer to the place of sale upon 
presentation to the warehouse proprietor of an approved copy of Customs 
Form 5251 (Order to Transfer Merchandise for Public Auction (Sale)), and 
an approved copy of Customs Form 6043 (Delivery Ticket). The quantity 
and condition of the goods so transferred shall be determined jointly by 
the proprietor and the cartman or lighterman picking up the goods for 
delivery to the place of sale. Any discrepancies shall be noted on the 
delivery ticket, a copy of which shall be sent to the port director 
within two business days of agreement. Seized goods that are released 
for a purpose other than sale may be released from warehouse only upon 
such written terms and conditions as directed by the port director.

[T.D. 82-204, 47 FR 49371, Nov. 1, 1982, as amended by T.D. 92-56, 57 FR 
24944, June 12, 1992; T.D. 02-65, 67 FR 68032, Nov. 8, 2002]



[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR146.66]

[Page 111-112]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 146--FOREIGN TRADE ZONES--Table of Contents
 
             Subpart F--Transfer of Merchandise From a Zone
 
Sec. 146.66  Transfer of merchandise from one zone to another.

    (a) At the same port. A transfer of merchandise to another zone with 
a different operator at the same port (including a consolidated port) 
will be by a licensed cartman or a bonded carrier as provided for in 
Sec. 112.2(b) of this chapter or by the operator of the zone for which 
the merchandise is destined under an entry for immediate transportation 
on Customs Form 7512 or other appropriate form with a Customs Form 214 
filed at the destination zone. A transfer of merchandise between zone 
sites at the same port having the same operator may be made under a 
permit on CF 6043 or under a local control system approved by the port 
director wherein any loss of merchandise between sites will be treated 
as if the loss occurred in the zone.
    (b) At a different port. A transfer of merchandise from a zone at 
one port of entry to a zone at another port will be by bonded carrier 
under an entry for immediate transportation on Customs Form 7512. All 
copies of the entry must bear a notation that the merchandise is being 
transferred to another zone designated by its number.
    (c) Forwarding of merchandise history; documentation. When 
merchandise is transferred under the provisions of this section, the 
operator of the transferring zone shall provide the operator of the 
destination zone with the documented history of the merchandise being 
transferred.
    (1) The following documentation must accompany merchandise 
maintained under a lot inventory control system:
    (i) A copy of the original Customs Form(s) 214 with accompanying 
invoices for admission of the merchandise and all components thereof;
    (ii) A copy of any Customs Form 214 filed subsequent to admission to 
change the status of the merchandise or its components; and

[[Page 112]]

    (iii) A copy of any Customs Form 216 to manipulate or manufacture 
the merchandise.
    (2) The following documentation must accompany merchandise not under 
a lot system, and not manufactured in a zone:
    (i) A copy of the original Customs Form(s) 214 with accompanying 
invoices for admission of the merchandise as attributed under the 
particular zone inventory method;
    (ii) A copy of any Customs Form 214 filed subsequent to admission to 
change the status of the merchandise as attributed under the particular 
zone inventory method; and
    (iii) A copy of any Customs Form 216 to manipulate the merchandise 
as attributed under the particular zone inventory method.
    (3) If the documents specified in paragraph (c)(2) of this section 
are not presented, the operator of the transferring zone shall submit 
the following:
    (i) A statement of the zone value, dutiable value, quantity, 
description, unique identifier, and zone status (showing any changes of 
status after admission and whether the merchandise was manipulated so as 
to change its tariff classification) of all the merchandise in the 
shipment covered by the transportation entry; and
    (ii) A certification that the statement in paragraph (c)(3)(i) of 
this section, is true and that the information contained therein is 
contained in the inventory control and recordkeeping system of the 
transferring zone.
    (4) The following documentation must accompany merchandise not under 
a lot system, but manufactured in a zone:
    (i) A statement by the transferring zone operator of the zone value, 
dutiable value, quantity, description, unique identifier, and zone 
status of all the merchandise (and components thereof, where applicable) 
covered by the transportation entry. The statement will also show any 
change in zone status in the transferring zone and whether the 
merchandise has been manufactured or manipulated in the zone so as to 
change its tariff classification; and
    (ii) A certification by the operator of the transferring zone that 
the statement in paragraph (c)(4)(i) of this section is true and the 
information therein is contained in the inventory control and 
recordkeeping system of the zone.
    (5) The operator of the transferring zone shall transmit the 
historical documentation of the merchandise to the receiving zone within 
10 working days after it has been delivered to the bonded carrier for 
transportation. The documentation will be referenced to the I.T. number 
covering the merchandise.
    (d) Arrival at destination zone. Upon arrival of the merchandise at 
the destination zone, it will be admitted under the procedure provided 
for in Sec. 146.32, except that no invoice or Customs examination will 
be required. When the historical documentation is received, the operator 
of the destination zone shall associate it with the Customs Form 214 for 
admission of the merchandise and incorporate that information into the 
zone inventory control and recordkeeping system.

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



[Code of Federal Regulations]
[Title 19, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR123.10]

[Page 598-599]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 123--CUSTOMS RELATIONS WITH CANADA AND MEXICO--Table of Contents
 
                      Subpart A--General Provisions
 
Sec. 123.10  General order merchandise.

    (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 owner or operator of the vehicle 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 owner or operator of the vehicle 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 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 as designated by 
the port director or an electronic equivalent as authorized by Customs, 
to cover the proprietor's receipt of 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 vehicle 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 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

[[Page 599]]

and conditions of his international carrier or custodial bond (see 
Secs. 113.63(b), 113.63(c) and 113.64(b) of this chapter).
    (d) If 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 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 proprietor 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 
Secs. 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) 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 
vehicle arrived, to be held there at the risk and expense of the 
consignee.

[T.D. 98-74, 63 FR 51289, Sept. 25, 1998, as amended by T.D. 02-65, 67 
FR 68033, Nov. 8, 2002]



[Code of Federal Regulations]
[Title 19, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR122.50]

[Page 557-558]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 122--AIR COMMERCE REGULATIONS--Table of Contents
 
              Subpart E--Aircraft Entry and Entry Documents
 
Sec. 122.50  General order merchandise.

    (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 pilot or owner of the aircraft 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 pilot or owner of the aircraft 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 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 as designated by 
the port director or an electronic equivalent as authorized by Customs, 
to cover the proprietor's receipt of 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, pilot, or person in charge of 
the importing aircraft, 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 to whom custody 
of the unentered merchandise or baggage has been transferred by a 
Customs-authorized permit to transfer or in-bond entry

[[Page 558]]

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 Secs. 113.63(b), 113.63(c) and 113.64(b) of this 
chapter).
    (d) If 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 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 proprietor 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 
Secs. 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 that 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) 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 
aircraft arrived, to be held there at the risk and expense of the 
consignee.

[T.D. 98-74, 63 FR 51288, Sept. 25, 1998, as amended by T.D. 02-65, 67 
FR 68033, Nov. 8, 2002]



[Code of Federal Regulations] [Title 19, Volume 1] [Revised as of April 1, 2003] From the U.S. Government Printing Office via GPO Access [CITE: 19CFR4.34] [Page 34-36] TITLE 19--CUSTOMS DUTIES CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES--Table of Contents 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 [[Page 35]] 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. <SUP>68-69</SUP> [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 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. [[Page 36]] (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] 
[Code of Federal Regulations]
[Title 19, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR4.37]

[Page 36-38]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES--Table of Contents
 
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

[[Page 37]]

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 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 Secs. 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

[[Page 38]]

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 Secs. 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]

[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR144.34]

[Page 73-74]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 144--WAREHOUSE AND REWAREHOUSE ENTRIES AND WITHDRAWALS--Table of Contents
 
                  Subpart D--Withdrawals from Warehouse
 
Sec. 144.34  Transfer to another warehouse.

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

[[Page 74]]

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

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



Code of Federal Regulations] [Title 19, Volume 1] [Revised as of April 1, 2003] From the U.S. Government Printing Office via GPO Access [CITE: 19CFR19.12] [Page 309-315] TITLE 19--CUSTOMS DUTIES CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY PART 19--CUSTOMS WAREHOUSES, CONTAINER STATIONS AND CONTROL OF MERCHANDISE THEREIN--Table of Contents Sec. 19.12 Inventory control and recordkeeping system. (a) Systems capability. The proprietor of a class 11 general order warehouse as described in Sec. 19.1 must have an automated inventory control and recordkeeping system. Proprietors of existing class 3, 4, or 5 warehouses as described in Sec. 19.1 certified before December 9, 2002, to receive general order merchandise must have automated inventory control and recordkeeping systems in place with respect to general order merchandise after a period of 2 years from December 9, 2002. All other warehouse proprietors have a choice of maintaining manual or automated inventory control and recordkeeping systems or a combination of manual and automated systems. All inventory control and recordkeeping systems must be capable of: (1) Accounting for all merchandise transported, deposited, stored, manipulated, manufactured, smelted, refined, [[Page 310]] destroyed in or removed from the bonded warehouse and all merchandise collected by a proprietor or his agent for transport to his warehouse. The records shall provide an audit trail from deposit through manipulation, manufacture, destruction, and withdrawal from the bonded warehouse either by specific identification or other Customs authorized inventory method. The records to be maintained are those which a prudent businessman in the same type of business can be expected to maintain. The records are to be kept in sufficient detail to permit effective and efficient determination by Customs of the proprietor's compliance with these regulations and correctness of his annual submission or reconciliation; (2) Producing accurate and timely reports and documents as required by this part; and (3) Identifying shortages and overages of merchandise in sufficient detail to determine the quantity, description, tariff classification and value of the missing or excess merchandise so that appropriate reports can be filed with Customs on a timely basis. (b) Procedures manual. (1) The proprietor shall have available at the warehouse an English language copy of its written inventory control and recordkeeping systems procedures manual in accordance with the requirements of this part. (2) The proprietor shall keep current its procedures manual and shall submit to the port director a new certification at the time any change in the system is implemented. (c) Entry of merchandise into a warehouse--(1) Identification. All merchandise collected by a proprietor or his agent for transport to his warehouse shall be receipted. In addition, all merchandise entered in a warehouse will be recorded in a receiving report or document using a Customs entry number or unique identifier if an alternate inventory control method has been approved. All merchandise will be traceable to a Customs entry and supporting documentation. (2) Quantity verification. Quantities received will be reconciled to a receiving report or document such as an invoice with any discrepancy reported to the port director as provided in Sec. 19.6(a). (3) Recordation. Merchandise received will be accurately recorded in the accounting and inventory system records from the receiving report or document using the Customs entry number or unique identifier if an alternative inventory control method has been approved. (d) Accountability for merchandise in a warehouse--(1) Identification of merchandise. The Customs entry number or unique identifier, as applicable under Sec. 19.4(b)(8), will be used to identify and trace merchandise. (2) Inventory records. The inventory records will specify by Customs entry number or unique identifier if an alternative inventory control method is approved: (i) The location of the merchandise within the warehouse; (ii) Except for merchandise in general order, the cost or value of the merchandise, unless the proprietor's financial records maintain cost or value and the records are made available for Customs review; and (iii) The beginning balance, cumulative receipts and withdrawals, adjustments, destructions, and current balance on hand by date and quantity. (3) Theft, shortage, overage or damage. Any theft or suspected theft or overage or any extraordinary shortage or damage (equal to one percent or more of the value of the merchandise in an entry or covered by a unique identifier; or if the missing merchandise is subject to duties and taxes in excess of $100) shall be immediately brought to the attention of the port director, and confirmed in writing within five business days after the shortage, overage, or damage has been brought to the attention of the port director. An entry for warehouse must be filed for all overages by the person with the right to make entry within five business days of the date of discovery. The applicable duties, taxes and interest on thefts and shortages so reported shall be paid by the responsible party to Customs within 20 calendar days following the end of the calendar month in which the shortage is discovered. The port director may allow the consolidation of duties and taxes applicable to multiple [[Page 311]] shortages into one payment; however, the amount applicable to each warehouse entry is to be listed on the submission and shall specify the applicable duty, tax and interest. These same requirements shall apply when cumulative thefts, shortages or overages under a specific entry or unique identifier total one percent or more of the value of the merchandise or if the duties and taxes owed exceed $100. Upon identification, the proprietor shall record all shortages and overages in its inventory control and recordkeeping system, whether or not they are required to be reported to the port director at the time. The proprietor must also record all shortages and overages as required in the Customs Form 300 or annual reconciliation report under paragraphs (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 paragraphs (g) or (h) of this section. Discrepancies found in a Class 9 warehouse with integrated locations as set forth in Sec. 19.35(c) will be the net discrepancies for a unique identifier (see Sec. 19.4(b)(8)(ii) of this part) such that overages within one sales location will be offset against shortages in another location that is within the integrated location. A Class 9 proprietor who transfers merchandise between facilities in different ports without being required to file a rewarehouse entry in accordance with Sec. 144.34 of this chapter may offset overages and shortages within the same unique identifier for merchandise located in stores in different ports (see Sec. 19.4(b)(8)(ii) of this part). (4) Permit file folders--(i) Maintenance. Permit file folders shall be maintained and kept up to date by filing all receipts, damage or shortage reports, manipulation requests, withdrawals, removals and blanket permit summaries within five business days after the event occurs. The permit file folders shall be kept in a secure area and shall be made available for inspection by Customs at all reasonable hours. (ii) Review. When the final withdrawal of merchandise relating to a specific warehouse entry, general order or seizure occurs, the warehouse proprietor shall: review the permit file folder to ensure that all necessary documentation is in the file folder accounting for the merchandise covered by the entry; notify Customs of any merchandise covered by the warehouse entry, general order or seizure which has not been withdrawn or removed; and file the permit file folder with Customs within 30 calendar days after final withdrawal, except as allowed by paragraph (b)(4)(iv) of this section. The permit file folder for merchandise not withdrawn during the general order period shall be submitted to the port director upon receipt from Customs of the Customs Form 6043. (iii) Exemption to maintenance requirement. Maintenance of permit file folders will not be required, if the proprietor has an automated system capable of: satisfactorily summarizing all actions by Customs warehouse entry; providing upon demand by Customs an entry activity summary report which lists all individual receipts, withdrawals, destructions, manipulations and adjustments by warehouse entry and is cross-referenced to the source documents for each transaction; and maintaining source documents so that the documents can be readily retrieved upon request. Failure to provide the entry activity summary report or documentation supporting the entry activity summary report upon demand by the port director or the field director of regulatory audit could result in reinstatement by the port director of the requirement to maintain the permit file folder for all warehouse entries. When final withdrawal is made, the proprietor must submit the entry activity summary report to Customs. Prior to submission, the proprietor must ensure the accuracy of the summary report and assure that all supporting documentation is on file and available for review if requested by Customs. (iv) Exemption to submission requirement. At the discretion of the port director, a proprietor may be allowed to [[Page 312]] furnish formal notification of final withdrawal in lieu of the requirement to submit the permit file folder or entry activity summary within 30 calendar days of each final withdrawal. If approved to use this procedure the proprietor could be required by the port director to submit permit file folders or entry activity summaries on a selective basis. Failure to promptly provide the permit file folder or entry activity summary upon request by the port director or the field director of regulatory audit could result in withdrawal of this privilege. (5) Physical inventory. The proprietor shall take at least an annual physical inventory of all merchandise in the warehouse, or periodic cycle counts of selected categories of merchandise such that each category is counted at least once during the year, with prior notification of the date(s) given to Customs so that Customs personnel may observe or participate in the inventory if deemed necessary. If the proprietor of a Class 2 or Class 9 warehouse has merchandise covered by one warehouse entry, but stored in multiple warehouse facilities as provided for under Sec. 144.34 of this chapter, the facility where the original entry was filed must reconcile the on-hand balances at all locations with the record balance for those entries with merchandise in multiple locations. The proprietor shall notify the port director of any discrepancies, record appropriate adjustments in the inventory control and recordkeeping system, and make required payments and entries to Customs, in accordance with paragraph (d)(3) of this section. (e) Withdrawal of merchandise from a warehouse. All bonded merchandise withdrawn from a warehouse will be accurately recorded within the inventory control and recordkeeping system. The inventory control and recordkeeping system must have the capability to trace all withdrawals back to a Customs entry and to ultimate disposition of the merchandise by the proprietor. (f) Special provisions for use of FIFO inventory procedures--(1) Notification. A proprietor who wishes to use FIFO procedures for all or part of the merchandise in a bonded warehouse shall provide the port director a written certification that: The proprietor has read and understands Customs FIFO procedures set forth in this section; the proprietor's procedures are in accordance with Customs FIFO procedures, and the proprietor agrees to abide by those procedures; and the proprietor of a public warehouse will obtain the written consent of any importer using the warehouse before applying FIFO procedures to their merchandise. (2) Qualifying merchandise. FIFO inventory procedures may be used only for fungible merchandise. For purposes of this section, ``fungible merchandise'' means merchandise which is identical and interchangeable for all commercial purposes. While commercial interchangeability is usually decided between buyer and seller or between proprietor and importer, Customs is the final arbiter of fungibility in bonded warehouses. The criteria for determining whether merchandise is fungible include, but are not limited to, Governmental and recognized industrial standards, part numbers, tariff classification, value, brand name, unit of quantity (such as barrels, gallons, pounds, pieces), model number, style and same kind and quality. Fungible textile and textile products which are withdrawn from a Class 9 warehouse may be accounted for using FIFO inventory procedures, inasmuch as such articles would be exempt from textile quotas. (3) Merchandise specifically excluded. FIFO procedures cannot be applied to the following merchandise, as well as any other merchandise which does not comply with the requirements of paragraph (f)(2) of this section: (i) Merchandise subject to quota, visa or export restrictions chargeable to different countries of origin; (ii) Textile and textile products of different quota categories; (iii) Merchandise with different tariff classifications or rates of duty, except where the difference is within the merchandise itself (such as kits, merchandise in unusual containers) or where the tariff classification or dutiability is determined only by conditions upon withdrawal (for example, withdrawal for vessel supplies, bonded wool transactions); [[Page 313]] (iv) Merchandise with different legal requirements for marking, labeling or stamping; (v) Merchandise with different trademarks; (vi) Merchandise of different grades or qualities; (vii) Merchandise with different importers of record; (viii) Damaged or deteriorated merchandise; (ix) Restricted merchandise; or (x) General order, abandoned or seized merchandise. (4) Maintenance of FIFO. FIFO procedures used for merchandise in any inventory category, must be used consistently throughout the warehouse storage and recordkeeping practices and procedures for the merchandise. For example, merchandise may not be added to inventory by FIFO but withdrawn by bypassing certain inventory layers to reach a specific warehouse entry other than the oldest one. However, this does not preclude the use of specific identification for some merchandise in a warehouse entry and FIFO for other merchandise, so long as they are segregated in physical storage and clearly distinguished in the inventory and accounting records. (5) FIFO recordkeeping. In the inventory and accounting records, the proprietor shall establish an inventory layer for each warehouse entry represented in each inventory category. The layers shall be established in the order of time of acceptance of the entry or by the date of importation of merchandise covered by each applicable warehouse entry. There shall be no mixing of layering both by time of acceptance and date of importation in the same warehouse. Records for each layer shall, as a minimum, show the warehouse entry number, date of acceptance, date of importation, quantity and unit of quantity. They shall also show for each entry the type of warehouse withdrawal number or other specific removal event charged against the entry, by date and quantity. Each addition to or deduction from the inventory category shall be posted in the appropriate inventory category within 2 business days after the event occurs. All FIFO records and documentation shall consistently use the same unit of quantity within each inventory category. (6) Entry requirements. Warehouse entries covering any merchandise to be accounted for under FIFO must be prominently marked ``FIFO'' on the face of the entry document. The entry document or an attachment thereto shall show the unique identifier of each inventory category to be accounted for under FIFO, the quantity in each inventory category and the unit of quantity. (7) Receipts. Any shortages, overages, or damage found upon receipt shall be attributed to the entry under which the merchandise was received. FIFO procedures will not take effect until the merchandise is physically placed in the storage location for the inventory category represented in the entry. (8) Manipulation. When manipulation results in a product with a different unique identifier, the inventory and accounting records shall show the quantities of merchandise in each inventory category appearing in the product covered by the new unique identifier. The withdrawal shall show the unique identifiers of both the materials used in the manipulation and the product as manipulated. The quantities of the original unique identifiers will be deducted from their respective warehouse entries on a FIFO basis when the resultant product is withdrawn. (9) Discontinuance of FIFO. A proprietor may voluntarily discontinue the use of FIFO procedures for all or part of the merchandise currently under FIFO by providing written notification to the port director. The notification shall clearly describe the merchandise, by commercial names and unique identifiers, to be removed from FIFO. Following notification, the merchandise shall be segregated in both the recordkeeping system and the physical location by warehouse entry number and the quantities so removed shall be deducted from the appropriate FIFO inventory category balances. Merchandise so removed shall be maintained under the specific identification inventory method. FIFO procedures which were voluntarily discontinued may be reinstated, but not for merchandise covered by any warehouse entry for which FIFO was discontinued. [[Page 314]] (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. If the proprietor of a Class 2 or Class 9 warehouse has merchandise covered by one warehouse entry, but stored in multiple warehouse facilities as provided for under Sec. 144.34 of this chapter, the CF 300 shall cover all locations and warehouses of the proprietor. 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. The proprietor shall retain the annual reconciliation report for 5 years from the end of the fiscal year covered by the report. The report must be available for a spot check or audit by Customs, but need not be furnished to Customs unless requested. There is no form specified for the preparation of the report. (2) Information required. The report must contain the company name; address of the warehouse; class of warehouse; date of inventory or information on cycle counts; a description of merchandise for each entry or unique identifier, quantity on hand at the beginning of the year, cumulative receipts and transfers (by unit), quantity on hand at the end of the year, and cumulative positive and negative adjustments (by unit) made during the year. If the proprietor of a Class 2 or Class 9 warehouse has merchandise covered by one warehouse entry, but stored in multiple warehouse facilities as provided for under Sec. 144.34 of this chapter, the reconciliation shall cover all locations and warehouses of the proprietor at the same port. If the annual reconciliation includes entries for which merchandise was transferred to a warehouse without filing a rewarehouse entry, as allowed under Sec. 144.34, the annual reconciliation must contain sufficient detail to show all required information by location where the merchandise is stored. For example, if merchandise covered by a single entry is stored in warehouses located in 3 different ports, the annual reconciliation should specify individually the beginning and ending inventory balances, cumulative receipts, transfers, and positive and negative adjustments for each location. (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. The certification letter must contain the proprietor's IRS number; date of fiscal year end; the name and street address of the warehouse; the name, title, and telephone number of the person having custody of the records; and the address where the records are stored. Reporting of shortages and overages based on the annual reconciliation will be made in accordance with paragraph (d)(3) of this section. Any previously unreported shortages and overages should be reported to the port director and any unpaid duties, taxes and fees should be paid at this time. (i) System review. The proprietor shall perform an annual internal review of the inventory control and recordkeeping system and shall prepare and maintain on file a report identifying any deficiency discovered and corrective action taken, to ensure that the system meets the requirements of this part. (j) Special requirements. A warehouse proprietor submission (CF 300) or annual reconciliation must be prepared [[Page 315]] for each facility or location as defined in Secs. 19.2(a) and 19.35(c) of this part. When merchandise is transferred from one facility or location to another without filing a rewarehouse entry, as provided for in Sec. 144.34(c) of this chapter, the submission/reconciliation for the warehouse where the entry was originally filed should account for all merchandise under the warehouse entry, indicating the quantity in each location. [T.D. 97-19, 62 FR 15836, Apr. 3, 1997, as amended by T.D. 99-78, 64 FR 57565, Oct. 26, 1999; T.D. 02-65, 67 FR 68033, Nov. 8, 2002]