[Code of Federal Regulations]

[Title 19, Volume 2]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 19CFR146.53]



[Page 108-109]

 

                        TITLE 19--CUSTOMS DUTIES

 

   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 

        HOMELAND SECURITY; DEPARTMENT OF THE TREASURY (CONTINUED)

 

PART 146_FOREIGN TRADE ZONES--Table of Contents

 

               Subpart E_Handling of Merchandise in a Zone

 

Sec.  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 Sec.  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



[[Page 109]]



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.