19 Cfr 146.40

§ 146.40

19 CFR Ch. I (4–1–07 Edition)

§ 146.40 Operator responsibilities for
direct delivery.
(a) Arrival of conveyance. Upon arrival
at a subzone or zone site of a conveyance containing foreign merchandise,
the operator shall:
(1) Collect in-bond or cartage documentation from the carrier;
(2) Check the condition of any seal
affixed to the conveyance, and if broken, missing or improperly affixed, notify the port director and receive instructions before unloading the merchandise;
(3) Check each incoming in-bond and
cartage shipment to determine if the
manifested quantity or the quantity on
the cartage document agrees with the
quantity actually received;
(4) Sign and date the in-bond or cartage documentation to accept responsibility for the merchandise under the
Foreign Trade Zone Operator’s Bond
and to relieve the carrier of responsibility.
(5) Forward the in-bond or cartage
documentation so as to reach the port
director within 2 working days after
the date of arrival of the conveyance at
the subzone or zone site;
(6) Maintain a file of open in-bond
manifests in chronological order of
date of conveyance arrival to identify
shipments that have arrived but the
entire contents of which have not been
admitted to the subzone or zone site;
and
(7) Notify the port director, by annotation on the Customs Form 214, when
the entire contents of a shipment have
been admitted.
(b) Transportation by operator. If merchandise is transported to a subzone or
zone site by the foreign trade zone operator from a location in the district
(see definition of ‘‘district’’ at § 112.1)
in which the subzone or zone site is situated, the merchandise is deemed admitted at the time the foreign trade
zone operator picks it up. At the time
of pick-up, the operator is responsible
for:
(1) Receipting for the merchandise
and recording on the appropriate document any discrepancies regarding
quantity, condition or the status of the
seals;
(2) Transporting the merchandise to
the zone or subzone; and

(3) Ensuring that the zone records reflect that the merchandise is received
in the zone.
(c) Admission of merchandise: alternative procedures—(1) Cumulative Customs Form 214. If the operator has an
agreement with the Bureau of Census
for direct transmittal of statistical information, he shall submit to the port
director each business day a properly
signed and uniquely numbered Customs
Form 214 listing all merchandise except for domestic status merchandise
admitted under § 146.43 recorded into
the inventory control and recordkeeping system during the previous
business day. The Customs Form 214
must contain a list of all in-bond (I.T.)
numbers or the unique number of any
cartage document, as well as the number of invoices for each I.T. or cartage
document, pertaining to merchandise
which has been entered into the system.
(2) Individual Customs Form 214. If a
cumulative Customs Form 214 is not
submitted as provided in paragraph
(b)(1) of this section, the operator shall
file with the port director each business day an individual Customs Form
214 and 214–A covering each shipment
recorded into the inventory control
and recordkeeping system during the
previous business day. The forms shall
be submitted within 10 days after the
end of the month in which the merchandise was received in the zone, and
no extension beyond that time will be
approved by the port director.
(3) General order. Merchandise not admitted into a subzone or zone site as
provided in this section within 15 calendar days after its arrival there shall
be disposed of in accordance with the
applicable procedures in § 4.37 or § 122.50
or § 123.10 of this chapter.
(4) Inventory control and recordkeeping
system. The operator shall establish and
maintain a continuing input quality
control program to ensure that information concerning merchandise in admission documents, verified or corrected by counts and checks, is accurately recorded in the inventory control and recordkeeping system. Quantities recorded in the system, after allowance by the port director for any
discrepancies, will be the quantities of
merchandise for which the operator

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Bureau of Customs and Border Protection, DHS; Treasury
shall be held liable under its bond for
admission to the subzone or zone site.
A discrepancy involving a within-case
shortage (or overage) need not be reported on Customs Form 5931, if the operator is able to report that information in another manner so that the
port director can determine whether
there is liability for the discrepancy
under the bond of any party to the importation.
[T.D. 86–16, 51 FR 5049, Feb. 11, 1986, as
amended by T.D. 94–81, 59 FR 51497, Oct. 12,
1994; T.D. 95–77, 60 FR 50020, Sept. 27, 1995;
T.D. 98–74, 64 FR 6801, Feb. 11, 1999]

Subpart D—Status of Merchandise
in a Zone
§ 146.41 Privileged foreign status.
(a) General. Foreign merchandise
which has not been manipulated or
manufactured so as to effect a change
in tariff classification will be given
status as privileged foreign merchandise on proper application to the port
director.
(b) Application. Each application for
this status will be made on Customs
Form 214 at the time of filing the application for admission of the merchandise into a zone or at any time thereafter before the merchandise has been
manipulated or manufactured in the
zone in a manner which has effected a
change in tariff classification.
(c) Supporting documentation. Each
applicant for this status shall submit
to the port director, with the application, an invoice notated as provided for
in § 141.90 of this chapter.
(d) Determination of duties and taxes.
Upon receipt of the application and accompanying invoice, the port director
may examine the merchandise to determine whether to approve the application. The merchandise will be subject to classification and valuation as
provided in § 146.65.
(e) Status as privileged foreign merchandise binding. A status as privileged
foreign merchandise cannot be abandoned and remains applicable to the
merchandise even if changed in form
by manipulation or manufacture, except in the case of recoverable waste
(see § 146.42(b)), as long as the merchandise remains within the purview of the
Act. However, privileged foreign mer-

§ 146.43

chandise may be exported or withdrawn for supplies, equipment, or repair material of vessels or aircraft
without the payment of taxes and duties, in accordance with §§ 146.67 and
146.69.
§ 146.42 Nonprivileged foreign status.
All of the following will have the status of nonprivileged foreign merchandise:
(a) Foreign merchandise. Foreign merchandise properly in a zone which does
not have the status of privileged foreign merchandise or of zone-restricted
merchandise;
(b) Waste. Waste recovered from any
manipulation or manufacture of privileged foreign merchandise in a zone;
and
(c) Certain domestic merchandise. Domestic merchandise in a zone, which by
reason of noncompliance with the regulations in this part has lost its identity
as domestic merchandise, will be treated as foreign merchandise. Any domestic merchandise will be considered to
have lost its identity if the port director determines that it cannot be identified positively by a Customs officer as
domestic merchandise on the basis of
an examination of the articles or consideration of any proof that may be
submitted promptly by a party-in-interest.
§ 146.43 Domestic status.
(a) General. Domestic status may be
granted to merchandise:
(1) The growth, product, or manufacture of the U.S. on which all internalrevenue taxes, if applicable, have been
paid;
(2) Previously imported and on which
duty and tax has been paid; or
(3) Previously entered free of duty
and tax.
(b) Application. No application or permit is required for the admission of domestic status merchandise, including
domestic packing and repair material,
to a zone, except upon order of the
Commissioner of Customs. No application or permit is required for the manipulation, manufacture, exhibition,
destruction, or transfer to Customs
territory of domestic status merchandise, including packing and repair materials, except: (1) When it is mixed or

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