Section

[Code of Federal Regulations]

[Title 19, Volume 1]

[Revised as of April 1, 2005]

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

[CITE: 19CFR19.2]

[Page 335-337]

TITLE 19--CUSTOMS DUTIES

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

HOMELAND SECURITY; DEPARTMENT OF THE TREASURY

PART 19_CUSTOMS WAREHOUSES, CONTAINER STATIONS AND CONTROL OF MERCHANDISE THEREIN--Table of Contents

Sec. 19.2 Applications to bond.

(a) Application. An owner or lessee desiring to establish a bonded

warehouse facility shall make written application to the director of the

port nearest to where the warehouse is located, describing the premises,

giving its location, and stating the class of warehouse desired. If

required by the port director, the applicant shall provide a list of

names and addresses of all officers and managing officials of the

warehouse and all persons who have a direct or indirect financial

interest in the operation of the warehouse facility. Except in the case

of a class 2 or class 7 warehouse, the application shall state whether

the warehouse facility is to be operated only for the storage or

treatment of merchandise belonging to the applicant or whether it is to

be operated as a public bonded warehouse. If the warehouse facility is

to be operated as a private bonded warehouse, the application also shall

state the general character of the merchandise to be stored therein, and

provide an estimate of the maximum duties and taxes which will be due on

all merchandise in the bonded warehouse at any one time. A warehouse

facility will be determined by street address, location, or both. For

example, if a proprietor has two warehouses located at one street

address and three warehouses located

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at three different street addresses the two located at one address would

be considered as one warehouse facility and the three located at three

different addresses would each be considered as separate warehouses

facilities. The applicant must prepare and have available at the

warehouse a procedures manual describing the inventory control and

recordkeeping system that will be used in the warehouse. A certification

by the proprietor that the inventory control and recordkeeping system

meets the requirements of Sec. 19.12 will be submitted with the

application. The physical security of the facility must meet the

approval of the port director.

(b) The applicant shall submit evidence of fire insurance coverage

on the proposed warehouse. If the applicant does not have fire insurance

for the proposed warehouse, he shall submit a certificate signed by an

officer or agent of each of two insurance companies stating that the

building is acceptable for fire-insurance purposes. The application

shall also be accompanied by a blueprint showing measurements, openings,

etc., of the building or space to be bonded. If the warehouse to be

bonded is a tank, the blueprint shall show all outlets, inlets, and pipe

liles and shall be certified as correct by the proprietor of the tank. A

gauge table showing the capacity of the tank in United States gallons

per inch or fraction of an inch of height, certified by the proprietor

to be correct, shall accompany the application. When a part or parts of

a building are to be used as the warehouse, there shall be given a

detailed description of the materials and construction of all

partitions. When the proprietor is the lessee of the premises covered by

the application and bond, he shall furnish a stipulation concurred in by

the sureties, agreeing that, prior to the expiration of the lease

covering the premises without renewal thereof, he will transfer any

merchandise remaining in the bonded warehouse to an approved bonded

warehouse, pay all duties, charges, or exactions due on such

merchandise, or otherwise dispose of such merchandise in accordance with

the Customs laws and regulations. If the application is for a Class 9

warehouse (duty-free store), the applicant shall furnish the following

documents:

(1) A map showing the location of the facilities to be bonded in

respect to the port of entry and distances to all exit points of

purchasers of conditionally duty-free merchandise;

(2) A description of the store's procedures, which includes

inventory control, recordkeeping, and delivery methods. These procedures

must be set forth in the proprietor's procedures manual. Such manual and

subsequent changes therein must be furnished to the port director upon

request. The procedures in the manual shall provide reasonable assurance

that conditionally duty-free merchandise sold therein will be exported;

(3) If an airport duty-free store, a description of the store's

procedures for restricting sales of conditionally duty-free merchandise

to personal-use quantities; and

(4) A statement by an authorized official of the appropriate state,

local or other governmental authority administering the exit point

facility that the applicant duty-free store is authorized to deliver

conditionally duty-free merchandise to purchasers at or through that

exit point facility. A separate statement shall be required for each

governments authority having jurisdiction over exit point facilities

through which the duty-free store intends to deliver merchandise to

purchasers. If the merchandise will be delivered through an exit point

which is not under the jurisdiction of a governmental authority, the

applicant will provide a statement to that effect.

except class 1, a bond shall be executed on Customs Form 301, containing

the bond conditions set forth in Sec. 113.63 of this chapter.

(d) An applicant desiring to establish a general order warehouse may

need to establish, as a condition of approval of the application, that

the warehouse will meet minimum space requirements imposed by the port

director to accommodate the storage of general order merchandise. Any

space requirements will be posted by written notice at the customhouse

and on the appropriate Customs-authorized electronic

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data interchange system. An applicant will not be subject to any minimum

space requirements that are posted after the filing of his application.

(e) Any proprietor of a bonded warehouse may be required on 10 days'

notice from the port director to furnish a new bond on Customs Form 301,

containing the bond conditions set forth in Sec. 113.63 of this

chapter; and if he fails to do so, no more goods shall be sent to the

warehouse and those therein shall be removed at the expense of such

proprietor. A new bond is required if the bonded warehouse is

substantially altered or rebuilt.

(f) As a condition of approval of the application, the port director

may order an inquiry by a Customs officer into the qualification,

character, and experience of the applicant (e.g. personal history,

financial and business data, credit and personal references), and into

the security, suitability, and fitness of the facility. The port

director may require an individual applicant to submit fingerprints on

form FD 258 or electronically at the time of filing the application, or

in the case of applications from a business entity, may require the

fingerprints, on form FD 258 or electronically, of all employees of the

business entity.

(g) The port director shall promptly notify the applicant in writing

of his decision to approve or deny the application to bond the

warehouse. If the application is denied the notification shall state the

grounds for denial. The decision of the port director will be the final

Customs administrative determination in the matter.

[28 FR 14763, Dec. 31, 1963, as amended by T.D. 56393, 30 FR 5580, Apr.

20, 1965; T.D. 78-80, 43 FR 10685, Feb. 15, 1978; T.D. 82-204, 47 FR

49368, Nov. 1, 1982; T.D. 84-213, 49 FR 41169, Oct. 19, 1984; T.D. 92-

81, 57 FR 37696, Aug. 20, 1992; T.D. 93-18, 58 FR 15772, Mar. 24, 1993;

T.D. 95-99, 60 FR 62733, Dec. 7, 1995; T.D. 97-19, 62 FR 15834, Apr. 3,

1997; T.D. 99-27, 64 FR 13675, Mar. 22, 1999; T.D. 01-14, 66 FR 8767,

Feb. 2, 2001; T.D. 02-65, 67 FR 68032, Nov. 8, 2002]