[Code of Federal Regulations]
[Title 19, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR191.2]

[Page 521-524]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 191--DRAWBACK--Table of Contents
 
                      Subpart A--General Provisions
 
Sec. 191.2  Definitions.

    For the purposes of this part:
    (a) Abstract. Abstract means the summary of the actual production 
records of the manufacturer.
    (b) Act. Act, unless indicated otherwise, means the Tariff Act of 
1930, as amended.
    (c) Certificate of delivery. Certificate of delivery (see 
Sec. 191.10 of this part) means Customs Form 7552, Delivery Certificate 
for Purposes of Drawback, summarizing information contained in original 
documents, establishing:
    (1) The transfer from one party (transferor) to another (transferee) 
of:
    (i) Imported merchandise;
    (ii) Substituted merchandise under 19 U.S.C. 1313(j)(2);
    (iii) A qualified article under 19 U.S.C. 1313(p)(2)(A)(ii) from the 
manufacturer or producer to the exporter or under 1313(p)(2)(A)(iv) from 
the importer to the exporter; or
    (iv) Drawback product;
    (2) The identity of such merchandise or article as being that to 
which a potential right to drawback exists; and
    (3) The assignment of drawback rights for the merchandise or article 
transferred from the transferor to the transferee.
    (d) Certificate of manufacture and delivery. Certificate of 
manufacture and delivery (see Sec. 191.24 of this part) means Customs 
Form 7552, Delivery Certificate for Purposes of Drawback, summarizing 
information contained in original documents, establishing:
    (1) The transfer of an article manufactured or processed under 19 
U.S.C. 1313(a) or 1313(b) from one party (transferor) to another 
(transferee);
    (2) The identity of such article as being that to which a potential 
right to drawback exists; and
    (3) The assignment of drawback rights for the article transferred 
from the transferor to the transferee.
    (e) Commercially interchangeable merchandise. Commercially 
interchangeable merchandise means merchandise which may be substituted 
under the substitution unused merchandise drawback law, Sec. 313(j)(2) 
of the Act, as amended (19 U.S.C. 1313(j)(2)) (see Sec. 191.32(b)(2) and 
(c) of this part), or under the provision for the substitution of 
finished petroleum derivatives, Sec. 313(p), as amended (19 U.S.C. 
1313(p)).
    (f) Designated merchandise. Designated merchandise means either 
eligible imported duty-paid merchandise or drawback products selected by 
the drawback claimant as the basis for a drawback claim under 19 U.S.C. 
1313(b) or (j)(2), as applicable, or qualified articles selected by the 
claimant as the

[[Page 522]]

basis for drawback under 19 U.S.C. 1313(p).
    (g) Destruction. Destruction means the complete destruction of 
articles or merchandise to the extent that they have no commercial 
value.
    (h) Direct identification drawback. Direct identification drawback 
means drawback authorized either under Sec. 313(a) of the Act, as 
amended (19 U.S.C. 1313(a)), on imported merchandise used to manufacture 
or produce an article which is either exported or destroyed, or under 
Sec. 313(j)(1) of the Act, as amended (19 U.S.C. 1313(j)(1)), on 
imported merchandise exported, or destroyed under Customs supervision, 
without having been used in the United States (see also Secs. 313(c), 
(e), (f), (g), (h), and (q)). Merchandise or articles may be identified 
for purposes of direct identification drawback by use of the accounting 
methods provided for in Sec. 191.14 of this subpart.
    (i) Drawback. Drawback means the refund or remission, in whole or in 
part, of a customs duty, fee or internal revenue tax which was imposed 
on imported merchandise under Federal law because of its importation, 
and the refund of internal revenue taxes paid on domestic alcohol as 
prescribed in 19 U.S.C. 1313(d) (see also Sec. 191.3 of this subpart).
    (j) Drawback claim. Drawback claim means the drawback entry and 
related documents required by regulation which together constitute the 
request for drawback payment.
    (k) Drawback entry. Drawback entry means the document containing a 
description of, and other required information concerning, the exported 
or destroyed article on which drawback is claimed. Drawback entries are 
filed on Customs Form 7551.
    (l) Drawback product. A drawback product means a finished or 
partially finished product manufactured in the United States under the 
procedures in this part for manufacturing drawback. A drawback product 
may be exported, or destroyed under Customs supervision with a claim for 
drawback, or it may be used in the further manufacture of other drawback 
products by manufacturers or producers operating under the procedures in 
this part for manufacturing drawback, in which case drawback would be 
claimed upon exportation or destruction of the ultimate product. 
Products manufactured or produced from substituted merchandise (imported 
or domestic) also become ``drawback products'' when applicable 
substitution provisions of the Act are met. For purposes of Sec. 313(b) 
of the Act, as amended (19 U.S.C. 1313(b)), drawback products may be 
designated as the basis for drawback or deemed to be substituted 
merchandise (see Sec. 1313(b)). For a drawback product to be designated 
as the basis for drawback, the product must be associated with a 
certificate of manufacture and delivery (see Sec. 191.24 of this part).
    (m) Exportation; exporter. (1) Exportation. Exportation means the 
severance of goods from the mass of goods belonging to this country, 
with the intention of uniting them with the mass of goods belonging to 
some foreign country. An exportation may be deemed to have occurred when 
goods subject to drawback are admitted into a foreign trade zone in 
zone-restricted status, or are laden upon qualifying aircraft or vessels 
as aircraft or vessel supplies in accordance with Sec. 309(b) of the 
Act, as amended (19 U.S.C. 1309(b)) (see Secs. 10.59 through 10.65 of 
this chapter).
    (2) Exporter. Exporter means that person who, as the principal party 
in interest in the export transaction, has the power and responsibility 
for determining and controlling the sending of the items out of the 
United States. In the case of ``deemed exportations'' (see paragraph 
(m)(1) of this section), the exporter means that person who, as the 
principal party in interest in the transaction deemed to be an 
exportation, has the power and responsibility for determining and 
controlling the transaction (in the case of aircraft or vessel supplies 
under 19 U.S.C. 1309(b), the party who has the power and responsibility 
for lading the vessel supplies on the qualifying aircraft or vessel).
    (n) Filing. Filing means the delivery to Customs of any document or 
documentation, as provided for in this part, and includes electronic 
delivery of any such document or documentation.
    (o) Fungible merchandise or articles. Fungible merchandise or 
articles means

[[Page 523]]

merchandise or articles which for commercial purposes are identical and 
interchangeable in all situations.
    (p) General manufacturing drawback ruling. A general manufacturing 
drawback ruling means a description of a manufacturing or production 
operation for drawback and the regulatory requirements and 
interpretations applicable to that operation (see Sec. 191.7 of this 
subpart).
    (q) Manufacture or production. Manufacture or production means:
    (1) A process, including, but not limited to, an assembly, by which 
merchandise is made into a new and different article having a 
distinctive ``name, character or use''; or
    (2) A process, including, but not limited to, an assembly, by which 
merchandise is made fit for a particular use even though it does not 
meet the requirements of paragraph (q)(1) of this section.
    (r) Multiple products. Multiple products mean two or more products 
produced concurrently by a manufacture or production operation or 
operations.
    (s) Possession. Possession, for purposes of substitution unused 
merchandise drawback (19 U.S.C. 1313(j)(2)), means physical or 
operational control of the merchandise, including ownership while in 
bailment, in leased facilities, in transit to, or in any other manner 
under the operational control of, the party claiming drawback.
    (t) Records. Records include, but are not limited to, statements, 
declarations, documents and electronically generated or machine readable 
data which pertain to the filing of a drawback claim or to the 
information contained in the records required by Chapter 4 of Title 19, 
United States Code, in connection with the filing of a drawback claim 
and which are normally kept in the ordinary course of business (see 19 
U.S.C. 1508).
    (u) Relative value. Relative value means, except for purposes of 
Sec. 191.51(b), the value of a product divided by the total value of all 
products which are necessarily manufactured or produced concurrently in 
the same operation. Relative value is based on the market value, or 
other value approved by Customs, of each such product determined as of 
the time it is first separated in the manufacturing or production 
process. Market value is generally measured by the selling price, not 
including any packaging, transportation, or other identifiable costs, 
which accrue after the product itself is processed. Drawback law 
requires the apportionment of drawback to each such product based on its 
relative value at the time of separation.
    (v) Schedule. A schedule means a document filed by a drawback 
claimant, under Sec. 313(a) or (b), as amended (19 U.S.C. 1313(a) or 
(b)), showing the quantity of imported or substituted merchandise used 
in or appearing in each article exported or destroyed for drawback.
    (w) Specific manufacturing drawback ruling. A specific manufacturing 
drawback ruling means a letter of approval issued by Customs 
Headquarters in response to an application, by a manufacturer or 
producer for a ruling on a specific manufacturing or production 
operation for drawback, as described in the format used. Synopses of 
approved specific manufacturing drawback rulings are published in the 
Customs Bulletin with each synopsis being published under an identifying 
Treasury Decision. Specific manufacturing drawback rulings are subject 
to the provisions in part 177 of this chapter.
    (x) Substituted merchandise or articles. Substituted merchandise or 
articles means merchandise or articles that may be substituted under 19 
U.S.C. 1313(b), 1313(j)(2), or 1313(p) as follows:
    (1) Under Sec. 1313(b), substituted merchandise must be of the same 
kind and quality as the imported designated merchandise or drawback 
product, that is, the imported designated merchandise or drawback 
products and the substituted merchandise must be capable of being used 
interchangeably in the manufacture or production of the exported or 
destroyed articles with no substantial change in the manufacturing or 
production process;
    (2) Under Sec. 1313(j)(2), substituted merchandise must be 
commercially interchangeable with the imported designated merchandise; 
and
    (3) Under Sec. 1313(p), a substituted article must be of the same 
kind and quality as the qualified article for which it is substituted, 
that is, the articles

[[Page 524]]

must be commercially interchangeable or described in the same 8-digit 
HTSUS tariff classification.
    (y) Verification. Verification means the examination of any and all 
records, maintained by the claimant, or any party involved in the 
drawback process, which are required by the appropriate Customs officer 
to render a meaningful recommendation concerning the drawback claimant's 
conformity to the law and regulations and the determination of 
supportability, correctness, and validity of the specific claim or 
groups of claims being verified.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998, as 
amended by T.D. 01-18, 66 FR 9649, Feb. 9, 2001]