19 Cfr 146.53

§ 146.53

19 CFR Ch. I (4–1–03 Edition)

that the destruction will be effective;
or (iv) the Executive Secretary of the
Board has not granted approval of a
new manufacturing operation.
(2) The port director is authorized to
approve a blanket application for a period of up to one year for a continuous
or repetitive operation. The port director may disapprove or revoke approval
of any application, or may require the
operator to file an individual application.
(c) Appeal of adverse ruling. If an approved application is subsequently rescinded by the port director for any
reason, the applicant or grantee may
appeal the adverse ruling pursuant to
the hearing provisions of § 146.82(b)(2).
The rescission shall remain in effect
pending the decision on the appeal.
(d) Report results—(1) Separate application. The operator shall report on Customs Form 216 the results of an approved manipulation, manufacture, exhibition, or certification of destruction
(other than by a blanket application),
unless the port director chooses physically to supervise the operation.
(2) Blanket application. The operator
shall maintain a record of an approved
manipulation,
manufacture,
exhibition, or certification of destruction,
in its inventory control and recordkeeping system so as to provide an accounting and audit trail of the merchandise through the approved operation.
(e) Destruction. The port director may
permit destruction to be done outside
the zone, in whole or in part and at the
risk and expense of the applicant, and
under such conditions as are necessary
to protect the revenue, if proper destruction cannot be accomplished within the zone. Any residue from the destruction within a zone, which is determined to be without commercial value,
may be removed to Customs territory
for disposal.
§ 146.53

Shortages and overages.

(a) Report required. The operator shall
report, in writing, to the port director
upon identification, as such, of any:
(1) Theft or suspected theft of merchandise;
(2) Merchandise not properly admitted to the zone; or

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

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United States Customs Service, Treasury
granted an extension of the time provided, the merchandise shall be sent to
general order.
(e) Damage. The liability of the operator under its Foreign Trade Zone Operator’s Bond may be adjusted for the
loss of value resulting from damage to
merchandise occurring in the zone. The
operator shall segregate, mark, and
otherwise secure damaged merchandise
to preserve its identity as damaged
merchandise.

Subpart F—Transfer of
Merchandise From a Zone
§ 146.61 Constructive transfer to Customs territory.
The port director shall accept receipt
of any entry in proper form provided
under this subpart, and the merchandise described therein will be considered to have been constructively transferred to Customs territory at that
time, even though the merchandise remains physically in the zone. If the
entry is thereafter rejected or cancelled, the merchandise will be considered at that time to be constructively
transferred back into the zone in its
previous zone status.
§ 146.62 Entry.
(a) General. Entry for foreign merchandise which is to be transferred
from a zone, or removed from a zone
for exportation or transportation to
another port, for consumption or warehouse, will be made on Customs Form
7512, Customs Form 3461, Customs
Form 7501, or other applicable Customs
forms. If entry is made on Customs
Form 3461, the person making entry
shall file an entry summary for all the
merchandise covered by the Customs
Form 3461 within 10 working days after
the time of entry.
(b) Documentation. (1) Customs Form
7501 or the entry summary will be accompanied by the entry documentation, including invoices as provided in
parts 141 and 142 of this chapter. The
person with the right to make entry
shall submit any other supporting documents required by law or regulations
that relate to the transferred merchandise and provide the information necessary to support the admissibility, the
declared values, quantity, and classi-

§ 146.63
fication of the merchandise. If the declared values are predicated on estimates or estimated costs, that information must be clearly stated in writing at the time an entry or entry summary is filed.
(2) Customs Form 7512 for merchandise to be transferred to another port
or zone or for exportation shall state
that the merchandise covered is foreign
trade zone merchandise; give the number of the zone from which the merchandise was transferred; state the status of the merchandise; and, if applicable, bear the notation or endorsement
provided for in § 146.64(c), § 146.66(b), or
§ 146.70(c).
(c) Waiver of supporting documents.
The port director may waive presentation of an invoice and supporting
documentation required in paragraph
(b) of this section with the entry or
entry summary, if satisfied that presentation of those documents would be
impractical, and the person making
entry or the operator either files invoices and supporting documentation
with the port director or maintains and
makes those records available for examination by Customs.
§ 146.63 Entry for consumption.
(a) Foreign merchandise. Merchandise
in foreign status or composed in part of
merchandise in foreign status may be
entered for consumption from a zone.
(b) Zone-restricted merchandise. Merchandise in a zone-restricted status
may be entered for consumption only
when the Board has ruled that merchandise can be entered for consumption.
(c) Estimated production—(1) Weekly
entry. When merchandise is manufactured or otherwise changed in a zone
(exclusive of packing) to its physical
condition as entered within 24 hours
before physical transfer from the zone
for consumption, the port director may
allow the person making entry to file
an entry on Customs Form 3461 for the
estimated removals of merchandise
during the calendar week. The Customs
Form 3461 must be accompanied by a
pro forma invoice or schedule showing
the number of units of each type of
merchandise to be removed during the
week and their zone and dutiable values. Merchandise covered by an entry

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