Supporting Law/Regulation

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. 19.11 Manipulation in bonded warehouses and elsewhere.

(a) So far as applicable, the general provisions of the regulations

governing warehouses bonded for the storage of imported merchandise

shall apply to bonded manipulation warehouses and to other designated

places of manipulation.

(b) Merchandise to be manipulated under section 562, Tariff Act of

1930, as amended, may be entered on Customs Form 7501 and sent directly

to a storage-manipulation warehouse.

(c) Warehouse proprietors shall not allow manipulation of any

merchandise without a prior permit issued by the port director, except

as provided in paragraph (h) of this section. Merchandise entered for

warehouse may be transferred to a storage-manipulation warehouse; or

merchandise entered for storage-manipulation warehouse may be

transferred after manipulation to the storage portion of the same

warehouse, to another storage warehouse, or to a manufacturing warehouse

of class 6.

(d) The application to manipulate, which shall be filed on Customs

Form 3499 with the port director having jurisdiction of the warehouse or

other designated place of manipulation, shall describe the contemplated

manipulation in sufficient detail to enable the port director to

determine whether the imported merchandise is to be cleaned, sorted,

repacked, or otherwise changed in condition, but not manufactured,

within the meaning of section 562, Tariff Act of 1930, as amended. If

the port director is satisfied that the merchandise is to be so

manipulated, he may issue a permit on Customs Form 3499, making any

necessary modification in such form. The port director may approve a

blanket application to manipulate on Customs Form 3499, for a period of

up to one year, for a continuous or a repetitive manipulation. The

warehouse proprietor must maintain a running record of manipulations

performed under a blanket application, indicating the quantities before

and after each manipulation. The record must show what took place at

each manipulation describing marks and numbers of packages, location

within the facility, quantities, and description of goods before and

after manipulation. The port director is authorized to revoke a blanket

approval to manipulate and require the proprietor to file individual

applications if necessary to protect the revenue, administer any law or

regulation, or both. Manipulation resulting in a change in condition of

the merchandise, which will make it subject to a lower rate of duty or

free of duty upon withdrawal for consumption, is not precluded by the

provisions of such section 562.

(e) No merchandise shall be manipulated elsewhere than in a bonded

warehouse unless the merchandise has been regularly entered for

consumption or warehouse and is of a class entitled to the warehousing

privilege under section 557, Tariff Act of 1930, as amended.

(f) Upon compliance with the provisions of paragraph (d) of this

section, manipulated merchandise may be further manipulated before

withdrawal in cases where the port director is satisfied that this will

not endanger the revenue or interfere with the efficient conduct of

Customs business. The merchandise remaining in the warehouse shall be

properly repacked after each manipulation.

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(g) Except as provided in Sec. 144.38 of this chapter, manipulated

merchandise may be withdrawn under any form of withdrawal, but no

withdrawal shall be accepted for less than an entire repacked package.

Each type of withdrawal filed shall contain a summary statement

indicating the quantity in the warehouse account after manipulation and

immediately before the withdrawal, the quantity withdrawn on the

particular withdrawal, and the quantity remaining in the warehouse after

the withdrawal. When merchandise covered by a consumption entry is

manipulated elsewhere than in a bonded warehouse and thereafter

withdrawn for consumption, the withdrawal shall be on Customs Form 7501

and shall be liquidated in accordance with Sec. 159.9 of this chapter.

(h) Merchandise which has been entered for warehouse and placed in a

Class 9 warehouse (duty-free store) may be unpacked into its smallest

irreducible unit for sale without a prior permit issued by the port

director. The port director may issue a blanket permit to a duty-free

store for up to one year permitting the destruction of merchandise

covered by any entry and found to be nonsaleable, if the merchandise to

be destroyed is valued at less than 5 percent of the value of the

merchandise at time of entry or $1,250, whichever is less, in its

undamaged condition. Such permit may be revoked in favor of a permit for

each entry and/or destruction whenever necessary to assure proper

destruction and protection of the revenue. The proprietor shall maintain

a record of unpacking merchandise into saleable units and destruction of

nonsaleable merchandise in its inventory and accounting records.

[28 FR 14763, Dec. 31, 1963, as amended by T.D. 82-204, 47 FR 49371,

Nov. 1, 1982; T.D. 84-129, 49 FR 23166, June 5, 1984; T.D. 84-171, 49 FR

31253, Aug. 3, 1984; T.D. 84-213, 49 FR 41169, Oct. 19, 1984; T.D. 85-

38, 50 FR 8723, Mar. 5, 1985; T.D. 89-1, 53 FR 51254, Dec. 21, 1988;

T.D. 92-81, 57 FR 37698, Aug. 20, 1992; T.D. 95-81, 60 FR 52295, Oct. 6,

1995; T.D. 97-19, 62 FR 15836, Apr. 3, 1997]