[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: 19CFR19.11]

[Page 308-309]
 
                        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

[[Page 309]]

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.
    (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]

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