TRANSFER OF MERCHANDISE FROM ZONE
9.1 General Foreign and domestic merchandise which has been brought into a zone for certain purposes may thereafter be exported, destroyed, or sent into the Customs territory in the original package or otherwise. When foreign merchandise is sent from a zone into the Customs territory of the United States, or is exported to Canada or Mexico subject to the NAFTA Duty Deferral found in 19 CFR 181.53, it shall be subject to the laws and regulations of the United States affecting imported merchandise (19 U.S.C. §81c(a)). Domestic status merchandise, whether or not it has been combined with or made part of merchandise in any other status, may be brought back into the Customs territory free of duty, or tax (Second Proviso, 19 §81c(a)). "Transfer" means to take merchandise with zone status from a zone for consumption, transportation, exportation, warehousing, cartage or lighterage, vessel supplies and equipment, admission to another zone, and like purposes (19 CFR 146.1(b)).
9.2 Temporary Removal Upon permit by the Port Director, zone status merchandise may be temporarily removed to the Customs territory from the zone for up to 120 days for repair, restoration, or incidental operation. "Incidental operation" means inspection, analysis, testing, calibration, measurement, sampling, photography, cleaning, repacking, or similar process which would not constitute "manufacturing or production" under drawback law (19 U.S.C. §1313(a) and HQ Ltr 214189 dated August 31, 1982).
(a) Application Application for temporary removal shall be made by the owner or purchaser on CBPF 216, appropriately modified. Each application must be made on an individual basis and shall not be authorized under a yearly blanket CBPF 216. The operation the merchandise is to undergo outside the zone must be described in sufficient detail to enable the Port Director to determine whether the application should be approved. If the application meets the conditions set forth below and is administratively acceptable, it will be approved by the ort director. A sample of a properly filled out CBPF 216 is shown in the Appendix to the FTZM. Transfer of merchandise may be under a local control system (19 CFR 146.66).
(b) Conditions The temporary removal transaction covered by the application must meet all of the following conditions:
(1) The merchandise may not be removed from the zone before the application is approved;
(2) Except for repairs, no other merchandise may be added to, combined with, or incorporated in the removed merchandise
, and no value may be added to it;
(3) The procedure may not be used to circumvent the FTZ Act through subjecting the merchandise to any operation or transaction which would not be authorized while in the zone, such as an excluded process of treatment or retail trade under 19 §81o;
(4) The merchandise must be returned to the same zone within 120 days and so reported to the Port Director. No extensions beyond the 120 days will be granted. The merchandise may be sent to any location within Customs territory so long as it is returned to the same zone and reported within the 120 day period. The merchandise remains the responsibility of the Operator under the Operator’s bond while outside the zone. The merchandise may not be entered for consumption while it is temporarily removed from the zone (See Section 11.7(h).
(5) Quantities removed and returned must be balanced on a transaction by transaction basis. However, fungible merchandise removed to a particular destination under different transactions and thereafter returned may be tracked using the FIFO inventory method.
(c) Return to Zone When all of the merchandise covered by an application has been returned to the zone, the Applicant shall certify the return on CBPF 216 and forward it to the Port Director to close out the temporary removal record. Upon return to the zone, the merchandise shall be received in the same zone status it had upon temporary removal.
(d) Violation of Conditions If the merchandise is not timely returned to the zone or otherwise fails to meet the conditions of temporary removal, the merchandise shall be considered to have been transferred from the zone without a permit, as required by 19 CFR 146.51 and 19 CFR 146.71(a). The violation will be treated as a default involving merchandise under the Operator’s bond (See Section 12.6 FTZM).
9.3 Domestic Status Merchandise Domestic status merchandise which has not been combined with or made part of merchandise in another zone status may be transferred from the zone without a CBP permit, unless a permit is ordered by the Commissioner (19 CFR 146.43(b)). The merchandise will be considered as having been transferred from the zone and as having lost zone status when it is: (1.) physically transferred from the zone, as evidenced by a receipt for removal by a carrier, owner, purchaser, or other appropriate party; and (2.) recorded in the inventory control and recordkeeping system(s) as transferred from the zone (19 CFR 146.24(a) and see Section 9.5 and 9.16(e) FTZM) for comparison with treatment of foreign status merchandise.
9.4 Articles Exempt from Entry Requirements Merchandise in foreign status may be manufactured in a zone into an article which is exempt from entry requirements. An example of such an article is electricity produced in the zone (C.S.D. 83 49 and see General Headnotes of the HTS). In such cases the merchandise may be transferred from the zone only upon issuance of a permit by the Port Director on a CBPF 216, appropriately modified. The Description of Activity in the form shall contain a citation of the authority to exempt the article(s) from entry.
9.5 Constructive Transfer "Constructive transfer" is a legal fiction which permits acceptance of a entry for merchandise in a zone before its physical transfer to the Customs territory (19 CFR 146.1(b)). The legal fiction is necessary because of the entry requirement and procedures imposed pursuant to 19 U.S.C. §1484. Zone status merchandise is exempt, for certain purposes, from CBP laws, pursuant to 19 U.S.C. §81c. The law would require that the merchandise be removed from the zone and held pending examination and release under 19 U.S.C. §§1484 and 1499. Under constructive transfer
, this delay and double handling is eliminated. The merchandise loses its zone status, and is deemed to be no longer subject to, or covered by, the FTZ Act upon constructive transfer (C.S.D. 79 249). However, the Operator is still responsible for the merchandise until its physical transfer from the zone (19 CFR 146.4(a), and see Section 9.16(e) FTZM).
(a) Procedure The Port Director shall accept receipt of any entry in proper form as set forth in 19 CFR 146 Subpart F, and the merchandise described therein will be considered to have been constructively transferred to the Customs territory at that time, even though the merchandise remains physically in the zone. If the entry is thereafter rejected or canceled, the merchandise will be considered at that time to be constructively transferred back into the zone in its previous zone status (19 CFR 146.61). This procedure replaces a procedure in effect prior to 1986 where the Operator was required to apply for constructive transfer. Since there was rarely any reason to deny constructive transfer that could not also be satisfied by rejecting or canceling the entry, constructive transfer was made automatic under 19 CFR 146.61 upon receipt of the entry.
9.6 Entry Procedures An entry is that documentation required by 19 CFR 142.3 to be filed with the appropriate CBP personnel to secure the physical transfer of foreign or zone restricted status merchandise from the zone (19 CFR 146, Subpart F). This section covers entry procedures peculiar to zones, but does not attempt to cover all entry procedures pursuant to 19 CFR 141 – 19 CFR 144 that may be applicable to entries for zone status merchandise.
(a) Place of Filing Entry documentation shall be presented to the appropriate CBP office at the location designated by the Port Director, as set forth in 19 CFR 141.62(a). An entry for zone status merchandise must be presented to CBP personnel within a port of entry, even if the zone is distant from the port, except as set forth in Section 2.9 FTZM.
(b) Administrative Requirements All entry forms shall be filled out completely, accurately, and legibly. All signatures required on the form and supporting documents shall be valid signatures. All supporting documentation shall be filed with the entry or otherwise timely filed. An entry will not be accepted nor a permit for transfer from the zone issued unless and until all administrative requirements are met.
(c) Penalties for False or Inaccurate Information If the information in any entry document is not true or accurate, the importer or agent may be subject to civil penalties under 19 U.S.C. §1592 for fraudulent
, negligent, or grossly negligent acts or omissions in connection with the entry. In addition the importer or agent may be subject to a fine or imprisonment, or both, under 18 U.S.C. §541, 18 U.S.C. §542, 18 U.S.C. §543, 18 U.S.C. §545, or other provisions of Title 18, U.S.C. (See Section 13.15 and 13.16 FTZM).
9.7 Entry for Consumption In order to transfer zone merchandise into the Customs territory for consumption, the importer of record shall file a consumption entry under the procedures of 19 CFR 141 and 19 CFR 142. In addition, an appraisement, informal, or electronic entry for consumption may be filed as set forth in 19 CFR 143. An informal consumption entry may be filed for samples that do not qualify for zone removal (19 CFR 10.151 and Section 8.3 FTZM). Also, an informal entry may be filed for payment of internal revenue tax on any sample of beer in excess of 8 ounces, wine in excess of 4 ounces, or distilled spirits in excess of 2 ounces, taken for the purpose of soliciting orders of products of foreign countries (27 CFR 251.49)).
(a) Entry Filing Procedure In the case of formal entries, there are 3 basic procedures to initiate the entry filing process: entry, entry summary which acts as an entry/entry summary, and immediate delivery.
(1) Entry An entry is filed on CBPF 3461, Entry/Immediate Delivery (19 CFR 142.3(a)(1)). Instructions for preparing this form are found in CD 099 3550 029, and a properly filled out sample is shown in the Appendix to the FTZM. The following special instructions should be noted in filling out CBPF 3461.
1. Block 1 The arrival date is the date of presentation of the entry.
Block 3 Insert Entry Type Code 06.
Block 14 – Insert Facilities Information Resource Management Systems (FIRMS) code. This identifies the zone in which the merchandise is located. The FIRMS code is assigned by the ort director.
4. Block 15 Insert "FTZ" with the three digit zone number and alpha character if applicable with no spaces (ex. FTZ123, FTZ123A, FTZ001, FTZ001A).
5. Block 22 - Show the zone status for each line.
6. Block 23 Since there is no manifest, insert the number of packages. If loose freight, insert the number of pieces. If in bulk, insert the quantity in the units in which the merchandise was sold or shipped.
7. Blocks 12, 13, 16, 17, 18, and 21 should not be filled out.
8. Block 26 - If the product is of foreign origin, or in privileged foreign status, use the MID of the foreign manufacturer. If the product is manufactured in the foreign-trade zone, use the following MID construction: CD 099 3550-055, November 24, 1986, “Instructions for Deriving Manufacturer/Shipper Identification Code”.
Country of Origin: US
Manufacturer Name: FTZ
Street Address: Zone number (if subzone,
Place subzone designation in City field in front of zone User’s name)
City: Zone User’s name
Example: Smith Manufacturing, Inc., located in subzone 215G. USFTZ215GSM
Example: Jones & Co., located in general-purpose zone 220. USFTZ220JON
The entry shall be accompanied by an invoice
, packing list, or other documentation required to obtain a permit by the Port Director to transfer the merchandise from the zone. An entry summary shall be filed within 10 working days after time of entry, as set forth in 19 CFR 142.12(a) and 146.62(a).
(2) Entry/Entry Summary At the option of the importer, an importer may file the entry summary documentation at the time of entry (19 CFR 142.12(a)). The Port Director may also require an importer to file the entry summary documentation at the time of entry under certain circumstances (19 CFR 142.13). Otherwise, the entry summary will be filed 10 working days after CBPF 3461, as set forth in 19 CFR 142.12 and 19 CFR 146.62(a). Instructions for preparing CBPF 7501 are found in CD 099 3550-061. A properly filled out sample is shown in the Appendix to the FTZM. The following special instructions for zone status merchandise are noted in filling out CBPF 7501:
1. Block 2 Insert entry type code 06 or 08 (NAFTA Duty Deferral). This entry type code must be used for all merchandise transferred from a zone for consumption; including visa, and AD/CVD merchandise.
2. Block 10 Regardless of marking or other country of origin considerations, the country to be reported in block 15 is the country of origin of the foreign status merchandise for which entry is required. If components of articles are from more than one country, report the foreign country of the components with the greatest value. When a single entry summary covers separately classifiable merchandise from more than one country, record the word "MULTI" in this block. To identify the country of origin in Block 28, directly below the line number, and prefixed with the letter "O", indicate a separate ISO (International Standard Country Code) for the country of origin corresponding for each line item. CD 099 3550 061, September 18, 1992, "Instructions for Preparation of CF 7501."
3. Block 13 - If the product is of foreign origin, or in privileged foreign status, use the MID of the foreign manufacturer. If the product is manufactured in the zone use the following MID construction: CD 099 3550-055, November 24, 1986, “Instructions for Deriving Manufacturer/Shipper Identification Code”
Country of Origin: US
Manufacturer Name: FTZ
Street Address: Zone number (if subzone, place subzone designation in City field in front of zone User’s name)
Example: Smith Manufacturing, Inc., located in subzone 215G. USFTZ215GSM
Example: Jones & Co., located in general-purpose zone 220. USFTZ220JON
Block 8 Insert "FTZ" followed by zone or subzone number. (Also, for certain textiles and textile products, insert the zone admission number). (See Section 9.7(e) FTZM.)
Block 21 - Insert Facilities Information Resource Management Systems (FIRMS) code. This identifies the zone where the merchandise is located. The FIRMS code is assigned by the Port Director.
6. Do not fill out Blocks 9, 11, 12, 14, 15, 16, 17, 19, and 20.
(3) Immediate Delivery Port Directors shall not issue any Special Permit for Immediate Delivery from a zone unless authorized under 19 CFR 142.21. If such a Special Permit is issued
, the procedures of 19 CFR 142.21 through 19 CFR 142.28 shall be followed.
(4) Electronic Entry Filing Entry documentation may be transmitted electronically from a zone to a CBP facility for approval and signature by CBP and returned to the zone through use of a facsimile machine, provided one is available C.S.D. 87 2. Procedures for qualifying for the Automated Broker Interface (ABI) are specified in 19 CFR 143, Subpart A. Procedures for filing electronic entries and electronic entry summaries are found in 19 CFR 143, Subpart D. Such entries must be filed through ABI (TD 90 92). Specific procedures for filing electronic entries and entry summaries for zone merchandise were issued via administrative message #0696 dated 10/2/90, and became effective 6/30/91.
(5) Supporting Documentation with Entry Summary CBPF 3461 or the entry/entry summary on CBPF 7501 will be accompanied by the entry documentation, including invoices, as set forth in 19 CFR 141 and 19 CFR 142. 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, declared values, quantity, and classification of the merchandise.
(i) Examination Invoice The Operator shall give a copy of the examination invoice filed upon admission of the merchandise to the zone to the person making entry to transfer the merchandise from the zone upon request of that person or the Port Director (19 CFR 146.37(b)).
The examination invoice presented by the importer upon admission of the goods to the zone may be used for making entry at the option of either the person making entry or the Port Director (19 CFR 146.32(b)). That is, the Port Director may demand that the examination invoice be used upon entry of the same merchandise. The examination invoice should be used when the merchandise has not been transformed in the zone into a new and different product. A copy of the invoice, modified to show the quantity and value of the merchandise being entered, may be accepted when merchandise covered by one examination invoice appears in two or more subsequent entries.
(ii) Waiver of Documentation The Port Director may waive presentation of an invoice and supporting documentation required in 19 CFR 146.62(b)(1) 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 CBP (19 CFR 146.62(c)). The Port Director and the Operator or importer should develop a format of such documentation which is within the practical capability of the Operator or importer and which provides all the information required by CBP.
(iii) Estimated Values - If the declared values are predicated on estimates or estimated costs, that information must be clearly identified to CBP as required at the time an entry or entry summary is filed (19 CFR 146.62(b)(1)). Estimated values must be reconciled upon determination of the actual value using CBP reconciliation procedures.
(6) Right to Make Entry Under 19 U.S.C. §484, only the "importer of record" has the right to make entry. The importer of record is the owner or purchaser of the goods, or when designated by the owner, purchaser, or consignee
, a licensed broker. The owner or purchaser is any party with a financial interest in a transaction, including, but not limited to, the actual owner or purchaser of the goods, a buying or selling agent; or a person or firm which imports on consignment, or under loan or lease, or for exhibition at a trade fair, or for repair, alteration, or further fabrication of the goods (See CD 099 3530 002, June 29, 2001). Operator s may not make entry for zone merchandise unless they are the owner or purchaser or otherwise qualify as a party with a financial interest as noted above. Operators who do not otherwise qualify also may not designate a customs broker to make entry, since only an owner, purchaser, or consignee may make such a designation.
(b) Entry Bond Merchandise will not be released for transfer to the Customs territory unless the importer of record has a single transaction or continuous bond on CBPF 301 – Activity Code 1 Importer’s bond, containing the bond conditions set forth in 19 CFR 113.62, on file with CBP (19 CFR 142.4(a)). A continuous bond may cover entries made at more than one port by the same principal. These types of bonds should not be confused with the Operator’s bond (See Section 4.7(c)(2) FTZM).
(1) Bond Amount The amount of a consumption entry bond will be determined by the Port Director according to the guidelines in 19 CFR 113.13(b) and CD 099 3510-004. The minimum amount of a continuous bond is $50,000. In the case of a continuous bond, the amount will be fixed in multiples of $10,000 nearest to 10 percent of the duties paid by the importer during the previous calendar year
, up to $1,000,000 of the previous year's duties. If the amount paid during the previous calendar year was more than $1,000,000, the amount will be fixed in multiples of $100,000 nearest to 10 percent of the duties paid during the previous calendar year. If no imports were made during the previous year, the amount will be based on the importer's estimate of duties that will accrue on merchandise during the current calendar year. In no event shall the limit of liability amount of any continuous Activity 1 bond be less than $50,000. In the case of a single transaction bond, generally, the bond amount will be the total value of the merchandise, plus the estimated amount of any duties, taxes, fees, and other charges collectable by the Port Director. If restricted merchandise is being entered, the bond amount will be the entered value of the merchandise or value plus duty and tax, as appropriate. When merchandise is subject to other agency requirements, where failure to redeliver could pose a threat to public health and safety, the bond amount will be set at not less than 3 times the total entered value of the merchandise. These bond amounts will be periodically reviewed by the Port Director as set forth in 19 CFR 113.13(c), and increased security may be demanded as set forth in 19 CFR 113.13(c) or (d).
(c) Deposit of Duties Estimated duties and taxes will be deposited by the importer of record with the CBP personnel designated to receive them, as set forth in 19 CFR 141, Subpart G.
(d) Entry Processing and Release Consumption entries are processed by CBP on a selective basis according to the risk to the revenue and proper law enforcement represented by the merchandise or the transaction. At most ports, selective processing is done through the automated procedures of the Automated Commercial System (ACS). Key data elements are fed into the computer, which advises CBP personnel whether examination or further review by Import Specialists is needed before the goods are released for transfer from the zone. Because of the selective processing, the majority of entries are approved for release without examination within a day after the entry is filed. If the required duties and taxes have been paid, the merchandise is admissible into U.S. commerce
, and CBP determines that no examination is necessary, a permit to transfer the merchandise into the Customs territory will be issued through an authorized signature on the CBPF 3461 and CBPF 7501, or other document authorized by the Port Director. In the case of electronic entry filing, a permit to transfer shall be transmitted electronically to the filer by CBP (19 CFR 143.34).
(e) Admissibility and Restricted Merchandise "Restricted merchandise" as defined in CD 099 3250-005, is merchandise which may not be authorized for delivery from CBP custody without a special permit, or waiver thereof, by an agency of the U.S. Government. In the absence of the special permit, such merchandise is not admissible into the commerce of the U.S. Entry procedures for zone restricted status merchandise are described in Section 9.15 FTZM.
(f) Merchandise Examination Merchandise entered for consumption from a zone is examined by CBP much less frequently than other merchandise entered for consumption. This is because much of the merchandise (1) is in the same condition as it was when it was subject to examination upon admission (19 CFR 146.36), or (2) is the product of repetitive manufacturing or processing in the zone. Nevertheless, the Port Director is authorized to examine the merchandise upon entry for consumption as well as upon admission. If merchandise is ordered for examination, it may be required to be transferred to a CES or other location as designated by the Port Director (See Sections 6.7(d) and 2.9 FTZM). Upon completion of the examination, a permit to release shall be issued on CBP Form 3461, 7501, or other authorized form, or electronically in the case of an entry filed electronically under the procedures of 19 CFR 143 Subpart D, if the merchandise is admissible and all requirements of law and regulation have been met.
(g) Tariff Classification Zone merchandise which is entered for consumption is classified according to the Harmonized Tariff Schedule of the United States, with the General Rules of Interpretation taken in order.
(1) Privileged Foreign (PF) Status Merchandise Merchandise in PF status will be subject to tariff classification according to its character, condition, and quantity at the rate of duty and tax in force on the date of filing, in complete and proper form
, of the application for admission to the zone and for privileged status designation (19 CFR 146.65(a)(1)). Merchandise will not be deemed to have any zone status, including privileged foreign status, unless and until it is admitted to a zone on an e-214/CBPF 214 (See Section 6.4 FTZM). Once privileged foreign status is selected, it can not be abandoned. Entries containing PF status merchandise must list the PF status merchandise on a separate line item(s) from any NPF status merchandise. (See Section 9.9(d) FTZM concerning the effect of privileged foreign status on U.S. Government importations of goods manufactured in a zone into other articles.).
(i) Waste Recoverable waste of privileged foreign status merchandise remaining after a casualty retains its privileged foreign status, and the merchandise is dutiable in its condition at the time privileged foreign status was requested (LD 86 0007, C.S.D. 86-7 and HQ 216240). It is distinct from recoverable waste of a manufacturing or manipulation operation under 19 CFR 146.42(b), which is changed to nonprivileged foreign status (See Section 9.7(g)(2) and 9.7(h)(1)(i) FTZM).
(iii) Duties Based on Relative Value Where two or more products result from the manipulation or manufacture of privileged foreign status merchandise in a zone, the duties and taxes applicable upon entry for consumption shall be distributed to the several products in accordance with their relative values at the time of separation, with due allowance for recoverable waste (First Proviso, 19 U.S.C. §81c (a)). In the calculation of relative values in the operations of a petroleum refinery in a zone, the time of separation is defined as the entire manufacturing period. The price of products required for computing relative values shall be the average per unit value of each product for the manufacturing period (19 U.S.C. §81c and see Section 11.6(j) FTZM).
(2) Nonprivileged Foreign Status Merchandise Nonprivileged foreign status merchandise set forth for in 19 CFR 146.42 will be subject to tariff classification in accordance with the character, condition and quantity of the actual product that is constructively transferred to the Customs territory at the time the entry or entry summary is filed with CBP (19 CFR 146.65(a)(2)).
Waste resulting from the manufacture or manipulation of merchandise in privileged foreign status, and domestic status merchandise which has lost its identity as such, lose their former statuses and become nonprivileged foreign status merchandise (19 CFR 146.42(b) and (c); see sections 5.7(d), 9.7(g)(1)(ii), and 9.7(h)(1)(i) FTZM).
(3) Generalized System of Preferences To be eligible for duty free treatment under the Generalized System of Preferences (19 CFR 10.171 through 10.178), several conditions must be met. 1) The merchandise must be imported directly from the Beneficiary Developing Country; (19 CFR 10.175); 2) nonprivileged foreign status merchandise entered for consumption must be in the same condition that it was in at the time of admission to the zone (C.S.D. 80-188).
(4) Entireties Any reference in a HTS heading to an article shall include a reference to that article entered unassembled or disassembled. General Rule of Interpretation 2(a), HTS. This allows unassembled articles imported into the United States on the same conveyance on the same day to be treated as an entirety for tariff classification purposes. The FTZ Act creates an exception to this general rule governing entireties, with a choice of changing entireties being afforded a User. When nonprivileged foreign and privileged domestic status merchandise are attached or packaged together or withdrawn in an entirety in a zone, the nonprivileged foreign merchandise is classifiable at the rate of the entirety, even though the domestic portion is separately classifiable (C.S.D. 82 29). Election of privileged foreign status allows a User to have individual parts or components classified at the time privileged status is requested without reference to the classification of the entirety (C.S.D. 83 97).
(h) Valuation Both privileged and nonprivileged foreign status merchandise are appraised in the same manner
, as set forth in 19 CFR 146.65(b).
(1) Dutiable Value The dutiable value of merchandise transferred from a zone is the price actually paid or payable for the merchandise in the transaction that caused the merchandise to be admitted into the zone, plus the statutory additions contained in 19 U.S.C. §402(b)(1) less, if included, international shipment and insurance costs and U.S. inland freight costs. If there is no such price actually paid or payable, or no reasonable representation of that cost or of the statutory additions, the dutiable value may be determined by excluding from the total zone value any included zone costs of processing or fabrication, general expenses and profit, and the international shipment and insurance costs and U.S. inland freight costs related to the merchandise transferred from the zone. The dutiable value shall reflect the total value of the foreign merchandise used in the manipulation or manufacture of the entered merchandise. In order to arrive at the dutiable value, a deduction from the transaction value of the foreign merchandise or total zone value, as appropriate, for recoverable and irrecoverable waste or scrap, generated as a result of the processing performed in that zone, will be permitted (19 CFR 146.65(b)(2)).
When items are combined in the zone, the dutiable value of the merchandise transferred from the zone shall be the sum of the value of the foreign status materials used in the manipulation or manufacture of the entered merchandise (HQ Ltrs 543048 dated June 17, 1983 and 543197 dated May 23, 1984).
(i) Valuation of Waste or Scrap The dutiable value of recoverable waste or scrap from the manufacture or manipulation of foreign status merchandise will be the price actually paid or payable to the zone seller in the transaction that caused the recoverable waste or scrap to be transferred from the zone (19 CFR 146.42(b) and 19 CFR 146.65(b)(2)).
(ii) Allowance for waste or scrap for privileged foreign merchandise - The deduction for waste or scrap to be made from the transaction value of the foreign merchandise used in the manipulation or manufacture of the entered merchandise shall represent the difference between: 1) the market value of the foreign merchandise admitted to the zone (i.e., the quantity of scrap or waste multiplied by the value, as appropriately measured, of the foreign merchandise); and 2) the market value of the scrap or waste (i.e., the transaction value of the scrap or waste).
(iii) Allowance for Damage An allowance in the dutiable value of zone merchandise may be made by the Port Director in accordance with the provisions of 19 CFR 158, Subparts B and C, for damage
, deterioration, or casualty while the merchandise is in the zone (19 CFR 146.65(b)(3)).
(2) Total Zone Value The total value of merchandise transferred from a zone will be determined in accordance with the principles of valuation contained in 19 U.S.C. §1401a and 19 U.S.C. §1500. The total value is that price actually paid or payable to the seller in the transaction that caused the merchandise to be transferred from the zone. Where there is no price actually paid or payable, the total zone value shall be the cost of all materials and zone processing costs related to the merchandise transferred from the zone (19 CFR 146.65(b)(1)).
(i) Liquidation When the declared value or values of the merchandise are based on an estimate or estimates or standard cost, the person making entry may request an extension of liquidation pending the presentation of updated or actual cost data. A request for an extension may be granted at the discretion of the Port Director (19 CFR 146.65(c)). If the declared values are predicated on estimates, estimated costs, or standard costs, that information must be clearly identified to CBP as required at the time an entry or entry summary is filed (19 CFR 146.62(b)(1)). Estimated values must be reconciled upon determination of the actual value using CBP reconciliation procedures.
(j) Antidumping and Countervailing Duties The Board requires that merchandise which is subject to antidumping or countervailing duties in its condition as imported be placed in privileged foreign status (15 CFR 400.33(b)). Upon entry for consumption such items shall be subject to bonding or cash deposit requirements under the AD/CVD order or the suspension of liquidation, as appropriate, under 19 CFR 351. HTSUS duty rates are established for privileged foreign status merchandise based on the date of admission to the zone. However, AD/CVD rates are assessed based on the rates applicable at the time of entry from the zone.
An AD/CVD investigation or order may be initiated on merchandise that has been previously admitted to a zone in nonprivileged foreign status. When this merchandise is entered for consumption, a determination is made as to whether the merchandise is within the scope of an AD/CDV investigation or order.
9.8 Weekly Entries for other than Quota Class Merchandise - The Trade and Development Act of 2000, Pub. L. 106-200, amended CBP entry statute, 19 U.S.C. §1484, to extend the use of weekly consumption entries to include all zones instead of limiting the use to only manufacturing operations. The week is defined as any consecutive 7-day period. The use of the weekly consumption entry is at the option of the Operator or User.
The CBPF 3461 (estimate), filed on or before the first day of the 7-day period in which the merchandise is to be withdrawn from the zone, must be accompanied by a proforma invoice or schedule showing the number of units of each type of merchandise anticipated to be transferred during the week and their total zone or dutiable values. For special instructions on filling out the Weekly Estimated CBPF 3461, please refer to Section 9.7((a)(1). Notwithstanding that a weekly estimated entry may be allowed, all merchandise will be dutiable as set forth in 19 CFR 146.65; see sections 9.7(g) and (h) FTZM. If estimated removals exceed actual removals, that excess quantity will not be considered to have been entered or constructively transferred to the Customs territory (19 CFR 146.63(c)). If the entry summary presented to CBP per Section 9.8(c) FTZM shows merchandise transferred from the zone in excess of the quantity entered on the weekly entry (plus any supplemental entry), the excess will be considered to have been transferred to the Customs territory without a permit, a breach of the Operator’s bond (19 CFR 146.71(a); see section 12.6 FTZM).
The estimated entry or release shall be treated as a single entry and a single release of merchandise. All fee exclusions and limitations of Section 13031(a)(9)(A) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. §58c(a)(9)(a)) shall apply
, including the maximum and minimum fee amounts set forth for under subsection (b)(8)(a)(i) of such Section.
The Secretary of the Treasury may require the Operator or User to use an electronic data interchange approved by CBP (such as its Automated Broker Interface) to file the weekly consumption entry and to pay the applicable duties, fees, and taxes with respect to the entries. The Operator or User may also be required to satisfy CBP that accounting, transportation, and other controls over the merchandise are adequate to protect the revenue and meet the requirements of other Federal agencies.
Purpose of Weekly Entries - Weekly entries are authorized under The Trade and Development Act of 2000, Title IV, Section 410, (amending 19 U.S.C. §1484; see also 19 CFR 146.63(c)), for rapid removal of merchandise from zones. If weekly entries were not allowed, it would be very difficult for the importer to make entry for the zone merchandise without unacceptable delays in the manufacturing process or in the distribution of goods. It would also be difficult for CBP to review and accept the entry and examine the merchandise in its form as entered.
Specific Estimate of Quantities and Values - Estimated weekly entries shall contain a specific estimate of the quantity of each HTS unit and total value to be entered during the covered 7-day period. This is required whether the merchandise is in privileged or nonprivileged foreign status. Weekly entries of parts shall contain a specific estimate of the quantity of each HTS unit to be shipped, and the total value. (19 CFR 146.63(c)).
(c) Filing of Entry Summary - The follow-up entry summary for a weekly entry shall be filed within the time limit specified in 19 CFR 142.12(b). The entry summary on CBPF 7501 must show in item 29 the quantity and value of the merchandise by HTS number, actually entered during the covered 7-day period. An entry summary shall not be accepted if:
(1) The quantity of HTS numbers on the entry summary exceeds the corresponding quantity on the weekly entry; or
(2) It does not include the quantity, value, as specified in this paragraph.
If a supplementary entry is filed to cover extra estimated entered merchandise during the 7-day period, a separate entry summary must be filed to cover that entry. The above quantity, value, requirements apply also to supplementary entries and their follow-up entry summaries. If there are no shipments of non-duty paid merchandise made during the week, the Operator requests, by letter, that the Port Director cancel the estimated CBPF 3461 entry. The entry number assigned to the weekly estimated CBPF 3461 is cancelled and cannot be re-used for the next shipping period.
(d) Limitations and Prohibitions -
(1) Sugar-Processing Operations - A weekly entry for estimated production shall not be accepted for any sugar or sugar-containing product which is subject to an absolute quota (See Section 11.6(i) FTZM).
(2) "Blue Sky" Estimates - Port Director s shall not accept weekly entries for estimated quantities that are grossly in excess of past amounts covered by entry summaries unless the estimate is accompanied by a reasonable explanation for the disparity.
(e) Exceptions to Other Provisions - The following exceptions to other provisions of the Customs regulations are noted:
(1) The restriction in 19 CFR 146.71(c) against further manufacture or manipulation will not be applied by CBP to weekly entries of estimated production.
(2) Weekly entry estimates may be accepted for merchandise which has not yet been imported or admitted to the zone
, as long as that merchandise is subsequently admitted, and is included in the follow up entry summary.
(f) Inventory Relief Point - Where the Operator of a zone relieves its inventory at or before the inventory relief point (usually the end of the final assembly line), the ort director may accept the weekly entry on the basis of the quantity and value of merchandise passing through the inventory relief point. In this case, the follow-up entry summary shall be made on the quantity and value of the merchandise passing the same inventory relief point. Extension of the time limit for physical removal from the zone pursuant to 19 CFR 146.71(c) for a period of up to 60 days shall not be deemed excessive for such operations.
9.9 9.9 Procedures for FDA Weekly Entry Filing (WEF) - Filers of entries containing FDA regulated products wishing to participate in CBP Weekly Entry Filing procedures must apply in writing to both the local FDA office and the local CBP Port Director under special procedures developed jointly by CBP and FDA. A copy of the letter of application should also be sent to the FDA Division of Import Operations and Policy (DIOP). The application must contain specific product and firm information depending on the actions taken within the zone. For goods that are manufactured in a FTZ, the following information is required: Commercial product name and a description, Harmonized Tariff Schedule (HTS) codes, FDA Product code, and Name, Address and MID of the site specific manufacturer of the highest valued, non-US, FDA regulated ingredient or component. For goods stored in an FTZ, the following information is required: The name, address, and MID of the site specific foreign manufacturer, FDA Country of origin, name, address and MID of the FDA shipper (i.e. the FTZ site from which the product is offered for entry into the US, and any FDA required registrations, listings, approvals
, and/or notifications (FCE# FDA 2877, etc.). This information is needed to determine if the product is suitable for WEF. In order to qualify for FDA WEF the product must be "low risk" and therefore, not subject to an import alert.
The FDA District office will determine the compliance history of both the products and the firms (both manufacturer and filer). The Application will be forwarded to the DIOP and the FDA Center responsible for the commodities in the application to determine the level of risk to the public health posed by the product. Once the application is completed by DIOP's Operations Branch and the appropriate center and found acceptable, DIOP's System's Branch will set screening criteria into OASIS. FDA and CBP will then inform the filer, in writing, that they have been accepted for WEF. Entries filed under the WEF will be issued FDA MAY PROCEED status through ACS/OASIS and will not be subject to redelivery for sampling and examination. WEF are subject to reevaluation and withdrawal at any time by DIOP, the Centers, or the local District Office. If at any time a decision is made that a filer should be removed from the WEF, the Division of Import Operations and Policy will be notified in writing. DIOP's System's Branch will ensure that all subsequent entries will undergo normal OASIS screening, and will be subject to redelivery for sampling and examination if required by FDA. The FTZ sites identified in the application will be added to the district OEI (if not already there), and appropriate inspectional coverage will be initiated. Any violative products collected or violative conditions observed, during inspection of the FTZ site will cause a review of the WEF application. FDA data for WEF entry processing will be submitted via ACS/OASIS. Products entered through WEF matching the elements submitted in WEF Application will receive a "MAY PROCEED" through ACS/OASIS, and will not normally be subject to redelivery.
9.10 Entries for Bonded Warehouse, TIB, Trade Fair, or U.S. Government Importations The first proviso of 19 U.S.C. §81c, provides that when foreign merchandise in a zone has been given privileged status, the merchandise may be sent into Customs territory on payment of duties and taxes. CBP interprets this proviso to forbid any delay in the payment of duties upon transfer to Customs territory (19 CFR 146.62). A similar kind of restriction is applicable to entries of merchandise imported by the U.S. Government which have been manufactured in a zone. It must also be noted that entries for quota class merchandise under TIB must also be charged to the appropriate quota. If the quota is closed, the TIB is not admissible.
(a) Bonded Warehouse Entries Most of the procedures and requirements of Section 9.7 FTZM, apply also to entries for warehouse. However, the following provisions apply to entries for warehouse, but not to entries for consumption:
(1) Privileged Foreign Status Merchandise Merchandise in privileged foreign status or composed in part of merchandise in privileged foreign status may not be entered for warehouse from a zone (C.S.D. 81 8 and 19 CFR 146.64(a)).
(2) Nonprivileged Foreign Status Merchandise Merchandise in nonprivileged foreign status containing no components in privileged foreign status may be entered for warehouse in the same or at a different port
, unless it was imported more than 5 years before the warehouse entry was filed (19 CFR 146.64(a), (d)). If such merchandise was entered for warehouse within the 5-year period, it may not remain in a bonded warehouse longer than 5 years from the date of importation of the merchandise. For example, if merchandise has been in a zone for a period of three (3) years from the date of original unlading at the first port of arrival in the U.S., the merchandise could only remain in the bonded warehouse for the remaining two (2) years. (See 19 CFR 146.64(d)).
(3) Zone Restricted Status Merchandise Foreign or domestic merchandise in zone restricted status may be entered for warehouse in the same or a different port only for storage pending exportation, unless the Board has approved another disposition (19 CFR 146.64(b), 146.70(c) and HQ 224147).
(4) Domestic or Previously Entered Merchandise – Per bonded warehouse regulations, domestic status, or previously entered merchandise, may not be entered into a bonded warehouse (See 19 U.S.C. §1555 and 19 U.S.C. §1557; 19 CFR 19).
(5) Textile Articles Textiles and textile products, including quota class merchandise, which have been changed as set forth in 19 CFR 146.63(d) may be entered for warehouse only if the entry is endorsed by the Port Director to show that the merchandise may not be withdrawn for consumption (19 CFR 146.64(c) and See Section 11.6(h) FTZM).
(b) Entry under Temporary Importation Bond
Privileged Foreign Status – Privileged Foreign status merchandise or composed in part of Privileged Foreign status merchandise may not be entered on a TIB (19 CFR 10.31 and C.S.D. 81-213).
Zone-Restricted Status - Zone restricted status merchandise may be entered for TIB only if the Board has ruled that it is in the public interest and has not specified that an entry other than a consumption entry shall be made (C.S.D. 81 119).
Non-Privileged Foreign Status - Nonprivileged foreign status merchandise may be entered on a TIB unless:
It contains Privileged Foreign status merchandise; or
It has been in the zone for longer than one year (C.S.D. 79 454); or
If quota merchandise, the quota is closed
(c) Trade Fair Entries
Privileged Foreign Status Merchandise – Cannot be subject to a Trade Fair Entry.
Zone-Restricted Status Merchandise –May be transferred to a trade fair for exhibition and subsequently entered for consumption if the Board has approved it as being in the public interest (19 CFR 147.45).
Non-Privileged Foreign Status Merchandise - Merchandise in NPF status not composed in part of merchandise in privileged foreign status may be transferred to a trade fair, from which it may be granted any disposition set forth in 19 CFR 147.42.
(d) Entries of U.S. Government Importations – Importations, by or for the account of the U.S. Government, are subject to the usual CBP entry and examination requirements. In the absence of express exemptions from duty, such as those contained in Chapter 98, Subchapter VIII, HTS, they are subject to duty (19 CFR 10.100). Procedures for entering such merchandise are set forth in 19 CFR 10.100 10.104. Merchandise in privileged foreign status which is transformed in a zone into merchandise which is covered by an HTS subheading in Chapter 98, Subchapter VII, HTS, as a U.S. Government importation is not eligible for the duty free exemption because the duties were fixed on the merchandise at the time privileged foreign status was requested (HQ 222452 dated August 15, 1990 and See Section 5.5 FTZM).
9.11 Entries for Diplomatic and Foreign Military Use Entries for diplomatic use are, for CBP purposes, entries for consumption, filed as set forth in Section 9.7(a) FTZM but with special control requirements of the Operator. Upon the request of the Department of State, merchandise may be transferred from a zone without the payment of duty and tax for the personal use of diplomatic, consular, and other privileged personnel. It cannot be used as an accommodation for others or for sale or other commercial use (19 CFR 148.85). There is no authority for a blanket transfer permit from a zone for such merchandise similar to the blanket withdrawal permit authorized under 19 CFR 19.6(d) for bonded warehouse operations.
(a) Regulatory Provisions for Exemption from Duties and Taxes - Diplomatic, consular and other privileged personnel are referenced in 19 CFR 148.85(a)-(c). In addition, 19 CFR 148.87 identifies public international organizations whose officers and employees, and representatives are entitled to such free entry privileges. 19 CFR 148.88 specifies certain representatives to, and personnel of, the United Nations and the Organization of American States entitled to the same privileges. Property of designated international organizations listed in 19 CFR 148.87 or of foreign governments will be admitted free of duty and internal revenue taxes imposed upon or by reason of importation under Title 22 U.S.C. §288, but such exemption will be granted only upon the receipt
, in each instance, of instructions from CBP issued at the request of the Department of State (19 CFR 148.87(a)). Foreign military personnel are entitled to exemption from duty and internal revenue taxes in accordance with 19 CFR 148.90.
(1) Procedure for Diplomatic Exemptions Permission for transfer to the Customs territory of zone status merchandise for diplomatic, consular, or public international organization use is requested by a representative of such an entity from the Department of State on DS Form 1504. If the Department of State finds that U.S. personnel in those countries are offered reciprocal privileges and approval of the request is otherwise warranted, it will so advise the appropriate Port Director. However, requests from the United Nations or foreign country missions to the United Nations in New York for exemptions shall be made directly to the New York Area Port Director. Requests from consulates in New York other than those associated with the United Nations shall be made to the Department of State.
(2) Procedures for Military Exemptions A request for exemption from duties and taxes on merchandise withdrawn for the official or personal use of members of the armed forces of a foreign country in the United States, but not as an accommodation to others or for sale or other commercial use, shall be made directly to the Port Director having jurisdiction over the zone and not, through the State Department (19 CFR 148.90(a)). The Port Director will accord duty and tax free treatment only to the extent to which the foreign government accords similar treatment to members of U.S. armed forces in that country, as advised by CBP Headquarters Diplomatic Privileges Office (19 CFR 148.90(b)). The withdrawal of alcoholic beverages for the personal or family use of foreign military personnel is limited to one case per month, except in exceptional circumstances (19 CFR 148.90(d)).
(b) Zone Admission File Records Entries under this section shall be made on CBPF 7501, accompanied by a copy of DS Form 1504. The Operator shall place a copy of the entry and the foregoing support documents in the zone admission file folder.
(c) Transfer to Other Ports after Entry An entry made under this section may be made at a port other than the one where the embassy, consulate, public international organization, or foreign military unit is located. Merchandise which has been entered for such diplomatic use may be transported to the location where it will be used for diplomatic purposes, but shall not be transported under CBP bond.
(d) Refused Merchandise If merchandise entered for diplomatic use is rejected by the diplomatic agency due to a language misunderstanding as to the quantity or kind of merchandise ordered, the refused delivery may be treated as a mistake of fact pursuant to 19 §