[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: 19CFR19.4]



[Page 339-341]

 

                        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.  19.4  Customs and proprietor responsibility and supervision over 

warehouses.



    (a) Customs supervision. The character and extent of Customs 

supervision to be exercised in connection with any warehouse facility or 

transaction provided for in this part shall be in accordance with Sec.  

101.2(c) of this chapter. Independent of any need to appraise or 

classify merchandise, the port director may authorize a Customs officer 

to supervise any transaction or procedure at the bonded warehouse 

facility. Such supervision may be performed through periodic audits of 

the warehouse proprietor's records, quantity counts of goods in 

warehouse inventories, spot checks of selected warehouse transactions or 

procedures or reviews of conditions of recordkeeping, storage, security, 

or safety in a warehouse facility.

    (b) Proprietor responsibility and supervision--(1) Supervision. The 

proprietor shall supervise all transportation, receipts, deliveries, 

sampling, recordkeeping, repacking, manipulation, destruction, physical 

and procedural security, conditions of storage, and safety in the 

warehouse as required by law and regulations. Supervision by the 

proprietor shall be that which a prudent manager of a storage and 

manipulation facility would be expected to exercise.

    (2) Customs access. The warehouse proprietor shall permit access to 

the warehouse and present merchandise within a reasonable time after 

request by any Customs officer.

    (3) Safekeeping of merchandise and records. The proprietor is 

responsible for safekeeping of merchandise and records concerning 

merchandise entered in Customs bonded warehouses. The proprietor or his 

employees shall safeguard and shall not disclose proprietary information 

contained in or on related documents to anyone other than the importer, 

importer's transferee, or owner of the merchandise to whom the document 

relates or their authorized agent.

    (4) Records maintenance--(i) Maintenance. The proprietor shall:

    (A) Maintain the inventory control and recordkeeping system in 

accordance with the provisions of Sec.  19.12 of this part;

    (B) Retain all records required in this part and defined in Sec.  

163.1(a) of this chapter, pertaining to bonded merchandise for 5 years 

after the date of the final withdrawal under the entry; and

    (C) Protect proprietary information in its custody from unauthorized 

disclosure.

    (ii) Availability. Records shall be readily available for Customs 

review at the warehouse. In addition, a proprietor may keep records at 

another location for Customs review, but only if the proprietor first 

receives written approval for such storage from the port director.

    (5) Record retention in lieu of originals. A warehouse proprietor 

may, in accordance with Sec.  163.5 of this chapter, utilize alternative 

storage methods in lieu of maintaining records in their original 

formats.

    (6) Warehouse and merchandise security. The warehouse proprietor 

shall maintain the warehouse facility in a safe and sanitary condition 

and establish procedures adequate to ensure the security of all 

merchandise under Customs custody stored in the facility. The warehouse 

construction will be a factor that will be considered by the port 

director in deciding whether to approve the application. The facility 

shall be built in such a manner as to render it impossible for 

unauthorized personnel to enter the premises without such violence as to 

make the entry



[[Page 340]]



easy to detect. If a portion of the facility is to be used for the 

storage of non-bonded merchandise, the port director shall designate the 

means for effective separation of the bonded and non-bonded merchandise, 

such as a wall, fence, or painted line. All inlets and outlets to bonded 

tanks shall be secured with locks and/or in-bond seals.

    (7) Storage conditions. Merchandise in the bonded area shall be 

stored in a safe and sanitary manner to minimize damage to the 

merchandise, avoid hazards to persons, and meet local, state, and 

Federal requirements applicable to specific kinds of goods. Doors and 

entrances shall be left unblocked for access by Customs officers and 

warehouse proprietor personnel.

    (8) Manner of storage. Packages shall be received in the warehouse 

and recorded in the proprietor's inventory and accounting records 

according to their marks and numbers. Packages containing weighable or 

gaugeable merchandise not bearing shipping marks and numbers shall be 

received under the weigher's or gauger's numbers. Packages with 

exceptions due to damage or loss of contents, or not identical as to 

quantity or quality of contents shall be stored separately until the 

discrepancy is resolved with Customs. Merchandise received in the 

warehouse shall be stored in a manner directly identifying the 

merchandise with the entry, general order, or seizure number; using a 

unique identifier for inventory categories composed of fungible 

merchandise accounted for on a First-In-First-Out (FIFO) basis; or using 

a unique identifier for inventory categories composed of fungible 

merchandise accounted for using another approved alternative inventory 

method.

    (i) Direct identification. The warehouse proprietor shall mark all 

shipments for identification, showing the general order or warehouse 

entry number or seizure number and the date of the general order, entry, 

or delivery ticket in the case of seizures. Containers covered by a 

given warehouse entry, general order or seizure shall not be mixed with 

goods covered by any other entry, general order or seizure. Merchandise 

covered by a given warehouse entry, general order or seizure may be 

stored in multiple locations within the warehouse if the proprietor's 

inventory control system specifically identifies all locations where 

merchandise for each entry, general order or seizure is stored and the 

quantity in each location. The proprietor must provide, upon request by 

a Customs officer, a record balance of goods, specifying the quantity in 

each storage location, covered by any warehouse entry, general order, or 

seizure so a physical count can be made to verify the accuracy of the 

record balance.

    (ii) FIFO. A proprietor may account for fungible merchandise on a 

First-In-First-Out (FIFO) basis instead of specific identification by 

warehouse entry number, provided the merchandise meets the criteria for 

fungibility and the recordkeeping requirements contained in Sec.  19.12 

of this part are met. As of the beginning date of FIFO procedures, each 

kind of fungible merchandise in the warehouse under FIFO shall 

constitute a separate inventory category. Each inventory category shall 

be assigned a unique number or other identifier by the proprietor to 

distinguish it from all other inventory categories under FIFO. All of 

the merchandise in a given inventory category shall be physically placed 

so as to be segregated from merchandise under other inventory categories 

or merchandise accounted for under other inventory methods. The unique 

identifier shall be marked on the merchandise, its container, or the 

location where it is stored so as to clearly show the inventory category 

of each article under FIFO procedures. Merchandise covered by a given 

unique identifier may be stored in multiple locations within the 

warehouse if the proprietor's inventory control system specifically 

identifies all locations where merchandise for a specific unique 

identifier is stored and the quantity in each location. The proprietor 

must provide, upon request by a Customs officer, a record balance of 

goods, specifying the quantity in each storage location, covered by any 

warehouse entry, general order, seizure, or unique identifier so a 

physical count can be made to verify the accuracy of the record balance.



[[Page 341]]



    (iii) Other alternative inventory methods. Other alternative 

inventory systems may be used, if Customs approval is obtained. 

Importers or proprietors who wish to use an alternative inventory method 

other than FIFO must apply to Customs Headquarters, Office of 

Regulations and Rulings, for approval.

    (9) Miscellaneous responsibilities. The proprietor is responsible 

for complying with requirements for transport to his warehouse, deposit, 

manipulation, manufacture, destruction, shortage or overage, inventory 

control and recordkeeping systems, and other requirements as specified 

in this part.



[T.D. 97-19, 62 FR 15834, Apr. 3, 1997, as amended by T.D. 98-22, 63 FR 

11825, Mar. 11, 1998; T.D. 98-56, 63 FR 32944, June 16, 1998]