[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: 19CFR19.35]



[Page 361-362]

 

                        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.  19.35  Establishment of duty-free stores (Class 9 warehouses).



    (a) General. A class 9 warehouse (duty-free store) may be 

established for exportation of conditionally duty-free merchandise by 

individuals departing the Customs territory, inclusive of foreign trade 

zones, by aircraft, vessel, or departing directly by vehicle or on foot 

to a contiguous country. Such articles must accompany the individual on 

his person or in the same aircraft, vessel, or vehicle in which the 

individual departs. ``Conditionally duty-free merchandise'' means 

merchandise sold by a duty-free store on which duties and/or internal 

revenue taxes (where applicable) have not been paid. Except insofar as 

the provisions of this section and Sec. Sec.  19.36-19.39 are more 

specific, the procedures for bonded warehouses apply to duty-free stores 

(Class 9 warehouses).

    (b) Location. A duty-free store (class 9 warehouse) may be 

established or located only:

    (1) Within the same port of entry from which a purchaser of duty-

free store merchandise departs the Customs territory;

    (2) Within 25 statute miles from the exit point through which a 

purchaser of duty-free store merchandise departs the Customs territory; 

or

    (3) In the case of an airport store, within any staffed port of 

entry, or within 25 statute miles from any staffed port of entry.

    (c) Integrated locations. A Class 9 warehouse with multiple 

noncontiguous sales and crib locations (see Sec.  19.37(a) of this part) 

containing conditionally duty-free merchandise and requested by the 

proprietor may be treated by Customs as one location if:

    (1) The proprietor can provide Customs upon demand with the proper 

on-hand balance of each inventory item in each storage location, sales 

room, crib, mobile crib, delivery cart, or other conveyance or 

noncontiguous location; and

    (2) The recordkeeping system is centralized up to the point where a 

sale is made so as to automatically reduce the sale quantity by location 

from centralized inventory or inventory records must be updated no less 

frequently than at the end of each business day to reflect that day's 

activity.

    (d) Exit point. The exit point referred to in paragraph (b) of this 

section means an area in close proximity to an actual exit for departing 

from the Customs territory, including the gate holding area in the case 

of an airport, but only if there is reasonable assurance that 

conditionally duty-free merchandise delivered in the gate holding area 

will be exported from the Customs territory. The exit point in the case 

of a land border or seaport duty-free store is the point at which a 

departing individual has no practical alternative to continuing on to a 

foreign country or to returning to Customs territory by passing through 

a U.S. Customs inspection facility. The port director's decision as to 

what constitutes the exit point or reasonable assurance of exportation 

in a given situation is final.

    (e) Notice to customers. Class 9 warehouse proprietors shall display 

in prominent places where they will be noticed and read by customers 

signs which state clearly that any conditionally duty-free merchandise 

purchased from the store:

    (1) Has not been subjected to any U.S. Federal duty or tax;

    (2) If brought back to the United States must be declared and is 

subject to U.S. Federal duty and tax with personal exemption; and,

    (3) Is subject to the customs laws and regulations, including 

possible duties and taxes, of any foreign country to which it is taken.

    (f) Security of sales rooms and cribs. The physical and procedural 

security requirements of Sec.  19.4(b)(6) of this part shall be applied 

to the security of the sales rooms and cribs by the port director. The 

proprietor shall establish procedures to safeguard the merchandise so as 

to accommodate the movement of purchasers and prospective purchasers of 

conditionally duty-free merchandise contained in duty-free sales rooms 

and cribs.

    (g) Approval of governmental authority. If a state or local or other 

governmental authority, incident to its jurisdiction over any airport, 

seaport, or other exit point facility, requires that a concession or 

other form of approval be obtained from that authority with respect to 

the operation of a duty-free



[[Page 362]]



store under which merchandise is delivered to or through such facility 

for exportation, merchandise incident to such operation may not be 

withdrawn for exportation and transferred to or through such facility 

unless the operator of the duty-free store demonstrates to the port 

director that the concession or approval required for the enterprise has 

been obtained.



[T.D. 92-81, 57 FR 37698, Aug. 20, 1992, as amended by T.D. 97-19, 62 FR 

15839, Apr. 3, 1997; T.D. 00-33, 65 FR 31261, May 17, 2000]