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: 19CFR19.36]

[Page 362-363]

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. 19.36 Requirements for duty-free store operations.

(a) Withdrawals. Merchandise withdrawn under the sales ticket

procedure in Sec. 144.37(h) of this chapter may be delivered only to

individuals departing from the Customs territory for exportation or to

persons and organizations for use as specified in subpart I, part 148,

of this chapter. Withdrawals of other kinds may be made from Class 9

warehouses, but only through separate withdrawals (or withdrawals under

blanket permit for vessel or aircraft supplies) under an approved permit

of the port director as provided in Sec. 144.39 of this chapter.

(b) Procedures required. Each duty-free store shall establish,

maintain, and follow written procedures to provide reasonable assurance

to the port director that conditionally duty-free merchandise purchased

therein will be exported from the Customs territory. A copy of any

change in the procedure will be provided to the port director before it

is implemented. However, receipt by Customs of the procedures of any

change thereto shall not be construed as approval by Customs of the

procedures. The port director is responsible for ensuring that each

enterprise has established guidelines with Customs and is complying with

those guidelines, giving assurance that proper supervision exists when

delivery is made to the purchaser at or before the exit point. The port

director may at any time require any change in the procedures deemed

necessary for assurance of exportation.

conditionally duty-free merchandise to purchasers at an airport exit

point shall establish, maintain, and enforce written restrictions on the

sale of conditionally duty-free merchandise to any one individual to

personal-use quantities. Personal-use quantities means quantities that

are only suitable for uses other than resale, and includes reasonable

quantities for household or family consumption as well as for gifts to

others. Proprietors will not knowingly sell or deliver conditionally

duty-free merchandise in any quantity to any individual for the purpose

of resale. A copy of the restrictions and of any change thereto shall be

provided to the port director prior to implementation. However, receipt

of the written restrictions by Customs shall not be construed as

approval by Customs of the restrictions. The port director may require

any change in the restrictions deemed necessary to conform to the

personal-use quantity restriction of this section.

(d) Reimported merchandise. Merchandise purchased in a duty-free

store is not eligible for exemption from duty, or tax where applicable,

under chapter 98, subchapter IV, Harmonized Tariff Schedule, if it is

brought back to the United States after exportation. To enforce this

restriction, the port director may require the proprietor to mark or

otherwise place a distinguishing identifier on individual items of

merchandise to indicate the items were sold in a U.S. duty-free store,

if a pattern is disclosed in which such items are being brought back to

the United States without declaration. A pattern of undeclared

reimportations means a number of instances over a period of time and not

isolated instances of unrelated violations. Any such marking required by

the port director will be inconspicuous to the purchaser and will not

detract from the value of the merchandise. The marking requirement will

be limited to the items or types of merchandise noted in the pattern,

and will not be extended to all merchandise of the responsible store

proprietor unless all or most items are part of the pattern.

(e) Merchandise eligible for warehousing. Only conditionally duty-

free merchandise may be placed in a bonded storage area of a Class 9

warehouse. However, domestic merchandise and merchandise which was

previously

[[Page 363]]

entered or withdrawn for consumption, may be brought into the bonded

sales or crib area of a Class 9 warehouse for display and sale, and in

the case of a crib, for delivery to purchasers. However, such

merchandise must be either identified or marked ``DUTY-PAID'' or ``U.S.-

ORIGIN'', or similar markings, as applicable, so that Customs officers

can easily distinguish conditionally duty-free merchandise from other

merchandise in the sales or crib area.

(f) Sale of merchandise. Conditionally duty-free merchandise for

exportation at airport or seaport exit points may be sold and delivered

only to purchasers who display valid tickets, or in the case of

chartered or for-hire flights that have not issued tickets, other proof

of impending departure from the Customs territory, and to crewmembers

who have been engaged for a flight or voyage departing directly from the

Customs territory with no intermediate stops in the U.S.

(g) Inventory procedure. Duty-free store proprietors shall maintain,

at the duty-free store or at another location approved by the port

director, a current inventory separately for each storage area, crib,

and sales area containing conditionally duty-free merchandise by

warehouse entry, or by unique identifier where permitted by the port

director. Proprietors shall assure that Customs has ready access to

those records, and that the records are stored in such a way as to keep

transactions of multiple facilities separated. The inventory shall be

reconcilable with the accounting and inventory records and the permit

file folder requirements of Sec. 19.12 (d), (e) and (f) of this part.

Proprietors are subject also to the recordkeeping requirements of other

paragraphs of Sec. 19.12, as well as those of Sec. Sec. 19.6(d),

19.37(d), 19.39(d) of this part, and 144.37(h)(3) of this chapter.

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

15840, Apr. 3, 1997]