(e) No merchandise shall be transferred into a zone until an application has been filled and a permit issued for the transfer, as set forth in paragraph (b) or (d) of this section.

(f) The collector may cause any merchandise in a zone to be examined at the time of admission, or at any time thereafter, if the examination is deemed necessary to facilitate the proper administration of any law, regulation, or instruction which the Customs Service is authorized to enforce.

(g) Whenever a certificate as to the arrival of any merchandise in a zone is required by a Federal agency the collector shall issue the certificate, properly describing and identifying the merchandise involved.

§ 30.6 Privileged foreign merchandise.

(a) This section tells how to obtain a privileged status for foreign merchandise, and what are the legal incidents of such status.

(b) Merchandise within the purview of the first proviso to section 3 of the act, as amended," shall be given status

'See § 8.6 of this chapter.

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Provided, That whenever the privilege shall be requested and there has been no manipulation or manufacture effecting a change in tariff classification, the collector of customs shall take under supervision any lot or part of a lot of foreign merchandise in a zone, cause it to be appraised and taxes determined and duties liquidated thereon. Merchandise so taken under supervision may be stored, manipulated, of manufactured under the supervision and regulations perscribed by the Secretary of the Treasury, be exported or destroyed, or may be sent into customs territory upon the payment of such liquidated duties and determined taxes thereon. If merchandise so taken under supervision has been manipulated or manufactured, such duties and taxes shall be payable on the quantity of

as privileged foreign merchandise proper application. Each applicat for this status shall be filed on z Form B, with the application for admi sion of the merchandise into the zone, at any time thereafter and before merchandise has been manipulated manufactured in the zone in a mann which has effected a change in its tar classification. Each applicant for su status shall file with his application zone customs entry on customs For 7502. Upon acceptance of the entry, collector shall cause the merchandise be appraised and taxes determined an duties liquidated thereon promptly. Th taxes to be determined are those of th same nature as are indicated in th liquidation of entries of imported mer chandise in customs territory.

(c) A status as privileged foreign mei chandise and the consequent determins tion of taxes and liquidation of dutie cannot be abandoned, but remain appl cable to the merchandise even if changed in form by manipulation or manufac ture, except in the case of recoverable waste, as long as the merchandis remains within the purview of the act

(d) The procedure in connection with the preparation, filing, and acceptance of the entry, the making of notations invoices, the preparation of custom Form 6417, the designation of examins tion packages or quantities, and the e amination and appraisement of the merchandise shall be the same as thi prescribed in the case of an entry fot warehouse made in customs territory except that no bond shall be required.

(e) Application may be made for per mission to manipulate, manufacture, exhibit any privileged foreign merchan dise before taxes have been determine and duties liquidated thereon, but such case the examination for purpose of appraisement must be completed,

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such foreign merchandise used in the manif ulation or manufacture of the enters article. Allowance shall be made fo recoverable and irrecoverable waste; and recoverable waste is sent into customs terr tory, it shall be dutiable and taxable in it condition and quantity and at its weight s the time of entry. Where two or mon products result from the manipulation a manufacture of merchandise in a zone the liquidated duties and determined taxes sha be distributed to the several products accordance with their relative value at the time of separation with due allowance fo waste as provided for above: (Se

1, Pub. Law No. 566, 81st Cong.).

he packages or samples required for uch examination must be segregated, efore the collector approves the appliation.

(f) Privileged foreign merchandise hall be subject to appraisement and ariff classification according to its conition and quantity, and to the rates of uty and tax in force, on the date of the ling with the collector, in complete and roper form for approval, of the reuest on zone Form B for privileged reign status and the zone customs eny which is required to accompany it. he value of such merchandise shall be etermined in accordance with sections )2 and 503 of the Tariff Act of 1930 and ie related provisions of law.

(g) For all customs purposes, the date

exportation of privileged foreign erchandise from the country whence was exported to the United States is he date of its final departure from that ountry, in accordance with § 14.3 (b) of his chapter.

(h) The value declared in any zone ustoms entry for privileged merchanlise may be amended in accordance with he provisions of section 487, Tariff Act f 1930, and the regulations thereunder.'

(1) With respect to privileged foreign Inerchandise, the requirements, privieges, and procedures of notices of apraisement, appeals for reappraisement, osting of liquidations, and protests gainst decisions of the collector are the ame as those prescribed in the case of herchandise covered by an entry for arehouse in customs territory.

(j) The original of the application on ɔne Form B when approved by the zone rantee shall be accepted by the collector s the equivalent of a bill of lading or arrier's certificate to identify the person esignated in such Form B as the congnee of the merchandise and its owner or customs purposes, except that such erson may transfer the right to withraw such merchandise from the zone › customs territory in accordance with 30.14 (f).

30.7 Privileged domestic merchandise. Merchandise within the purview of he second proviso to section 3 of the ct, as amended," shall be given status

• See § 8.16 of this chapter.

20 440 • · Provided further, That subject o such regulations respecting identity and he safeguarding of the revenue as the Secre

as privileged domestic merchandise on proper application. Application for this status shall be included in the application to transfer the merchandise into the zone on zone Form D, as provided for in § 30.5 (d). In such cases the evidence of the right of the applicant to transfer the merchandise to the zone provided for in that section and the release order of the carrier are not required. If the collector is satisfied that the revenue will be protected, and the rights of importers will not be prejudiced, he may permit the transfer to a zone of domestic packing and repair materials and other adjunctive articles without requiring an application on zone Form D. If the requirements of the second proviso are complied with, any of the foregoing may subsequently be brought back to customs territory free of quotas, duty, or tax.

§ 30.8 Non-privileged foreign merchandise.

(a) All the following shall have the status of non-privileged foreign merchandise.

(1) Foreign merchandise properly in a zone which does not have the status of privileged foreign merchandise or of zone-restricted merchandise;

(2) Waste recovered from any manipulation or manufacture of privileged foreign merchandise; and

(3) Domestic merchandise which will be subject to treatment as foreign merchandise as provided for in the third proviso to section 3 of the act as amended," if removed to customs territory.

tary of the Treasury may deem necessary, articles, the growth, product, or manufacture of the United States, on which all internalrevenue taxes have been paid, if subject thereto, and articles previously imported on which duty and/or tax has been paid, or which have been admitted free of duty and tax, may be taken into a zone from the customs territory of the United States, placed under the supervision of the collector, and whether or not they have been combined with or made a part, while in such zone, of other articles, may be brought back thereto free of quotas, duty or tax: .." (19 U. S. C. 81c)

" "Provided further, That if in the opinion of the Secretary of the Treasury their identity has been lost, such articles not entitled to free entry by reason of non-compliance with the requirements made hereunder by the Secretary of the Treasury shall be treated

(b) Any domestic merchandise shall be deemed to have lost its identity as such for the purposes of paragraph (a) (3) of this section if the collector shall determine that it cannot be identified positively by customs officers as domestic merchandise on the basis of their examination of the articles and their consideration of any proof that may be submitted promptly by a party in interest.

§ 30.9 Non-privileged domestic merchandise.

All merchandise which could have obtained the status of privileged domestic merchandise but for which no application for such status has been approved (not including any merchandise within the purview of § 30.8 (a) (3)) shall have the status of non-privileged domestic merchandise.

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Provided further, That under the rules and regulations of the controlling Federal agencies, articles which have been taken into a zone from customs territory for the sole purpose of exportation, destruction (except destruction of distilled spirits, wines, and fermented malt liquors), or storage shall be considered to be exported for the purpose of

"(a) The draw-back, warehousing, and bonding, or any other provisions of the Tariff Act of 1930, as amended, and the regulations thereunder; and

"(b) The statutes and bonds exacted for the payment of draw-back, refund, or exemption from liability for internal-revenue laws generally and the regulations thereunder.

"Such a transfer may also be considered an exportation for the purposes of other Federal laws insofar as Federal agencies charged with the enforcement of those laws deem it advisable. Such articles may not be returned to customs territory for domestic consumption except where the Foreign-Trade Zones Board deems such return to be in the public interest, in which event the articles shall be subject to the provisions of paragraph 1615 (f) of the Tariff Act of 1930, as amended: ..." (19 U. S. C. 81c)

transfer the merchandise into the zon on zone Form D, as provided for 1 § 30.5 (d).

(b) If the merchandise is to be con sidered exported for the purpose of an Federal law other than the customs laws the collector shall be satisfied that al pertinent laws, regulations, and rule administered by the Federal agency con cerned have been complied with before he approves the application provided for in § 30.5 (d).

(c) If the applicant desires a zone restricted status in order that the mer chandise may be considered exported for the purpose of any customs laws, all pertinent customs requirements relating to actual exportations shall be complied with as though the admission of the merchandise into the zone constituted lading on an exporting carrier at a port of final exit from the United States Any declaration or form required for a case of actual exportation shall be modified to show that the merchandise has been deposited in a zone in lieu d actual exportation, and a copy of the approved application provided for in

30.5 (d) may be accepted in lieu of any proof of shipment required in cases of actual exportation.

(d) If merchandise is transferred from a customs bonded warehouse into a zone, it shall have the status of zone-restricted merchandise when admitted into the zone in view of the provisions of the fourth proviso to section 3 of the act and in all such cases the application provided for in § 30.5 (d), shall state that s zone-restricted status is desired for the merchandise. Merchandise taken into a zone for manipulation elsewhere than in a bonded warehouse under the pro visions of section 562, Tariff Act of 1930, as amended, is not considered within the purview of the fourth proviso of section 3 of the act.

§ 30.11 Customs control of merchandise in a zone.

(a) No merchandise in a zone shal be removed therefrom in any manner of for any purpose except as provided for in the regulations in this part.

(b) If the collector deems it necessary for the protection of the revenue, he may require segregation of privileged foreign, privileged domestic, zone-restricted, and such other merchandise as he determines to be subject to special risks to the revenue.

(c) The operator of the zone shall keep he collector's office currently informed s to the location of any merchandise in ne zone which is not within the purview I paragraph (b) of this section, and hall notify the collector promptly of ny loss or damage that may occur to 1y merchandise in the zone.

30.12 Manipulation, manufacture, or exhibition in a zone.

manipulation,

(a) Permission for anufacture, or exhibition of merchanse in a zone may be obtained by filing ith the collector an application on zone rm E. No such operation shall be rried on until the collector has apoved the application.

(b) The application shall include a ll description of the proposed operaon; a designation of the exact place in e zone where the operation is to be rformed; the identification of the inlved merchandise by lot number, arks and numbers of the packages, escription, quantity, and zone status; ad in the case of manipulation or anufacture a statement as to whether ticles with one zone status are to be icked, commingled, or combined with ticles having a different zone status. (c) The collector shall approve the apication unless the proposed operation ould be in violation of the fourth or th proviso to section 3 of the act, as nended," or the place designated for its rformance is not suitable for preventg confusion as to the identity or status the merchandise and for safeguardg the revenue.

(d) In the event of the denial of any plication by the collector for any rean, the applicant, the grantee of the

The fourth proviso is quoted in footte 12.

Provided further, That no opition involving any foreign or domestic erchandise brought into a zone which opition would be subject to any provision or ovisions of section 1807, chapter 15, chap16, chapter 17, chapter 21, chapter 23, apter 24, chapter 25, chapter 26, or chapter of the Internal Revenue Code if performed customs territory, or involving the manuture of any article provided for in paraaph 367 or paragraph 368 of the Tariff Act 1930, shall be permitted in a zone except ose operations (other than rectification of tilled spirits and wines, or the manufacre or production of alcoholic products unfor beverage purposes) which were perssible under this Act prior to July 1, 1949: (19 U. S. C. 81c)

zone, or the operator of the zone, may appeal the adverse ruling to the Board. If any revenue protection considerations are involved in such an application, the Board shall be guided by the determinations of the Secretary of the Treasury with respect to them.

(e) When any privileged inerchandise is to be manipulated in any way or manufactured, the person performing the operation shall maintain records containing the following information:

(1) A full identification, as specified in paragraph (b) of this section, of each lot of privileged merchandise used in the operation,

(2) The unit and total values of each such lot, the values in the case of privileged foreign merchandise to be those declared in the zone customs entry, including any amendment thereof,

(3) The commercial name or description of the product resulting from the operation, or of each such product if there are more than one,

(4) The quantity of such product or of each such product, as the case may be,

(5) The commercial name or description and quantity of each kind of waste recovered from the operation, and

(6) The description (i. e., evaporation, leakage, spillage, dust, etc.) and quantity of each kind of total physical loss resulting from the operation.

If any non-privileged merchandise is to be used in the operation, records shall be maintained containing a full identification, as specified in paragraph (b) of this section, and the unit and total values of each lot of the merchandise used in the operation.

§ 30.13 Destruction of merchandise in

a zone.

(a) Each application to destroy merchandise in a zone shall be filed with the collector on zone Form E.

(b) The application shall include a description of the proposed method of destruction, a designation of the place where the destruction is to be accomplished, and an identification of the merchandise as in the case of an application for permission to manipulate (§ 30.12 (b)).

(c) The destruction of distilled spirits, wines, and fermented malt liquors having a zone-restricted status may not be authorized in view of the exception in the fourth proviso to section 3 of the act, as amended. In any other case, if the

collector is satisfied that the destruction will be effective and that the revenue will be adequately protected, he shall approve the application. If proper destruction can not be effectively accomplished within the zone, the collector may permit it to be done elsewhere, in whole or in part, under such conditions as he shall specify for protecting the revenue. Any residue of destruction which is entirely worthless may be removed to customs territory for disposal. § 30.14 Sending merchandise from a zone into customs territory.

(a) When privileged domestic merchandise which has not been mixed, combined, or repacked in the zone with merchandise having a different zone status is to be transferred from the zone to customs territory, the zone grantee shall submit to the collector a description of the proposed transaction, in triplicate, and signed by him which shall include: (1) The proposed date of transfer; (2) The identification of the carrier; (3) The destination of the shipment; (4) Identification of the merchandise by zone storage location, lot number, marks and numbers of the packages, description, quantity, and zone status; and

(5) A notation as to any shortage or damage.

If the transfer is approved by the collector the original of the description shall be so stamped to serve as a permit of delivery, the original and one copy shall be returned to the grantee, and the triplicate shall be retained by the collector. If a form of tally prepared by the zone grantee for its purposes contains the necessary information, it may be accepted by the collector as the description required by this paragraph. No document other than the permit of delivery shall be required to release the merchandise to the grantee and authorize its transfer into customs territory.

(b) When privileged foreign merchandise which has not been mixed, combined, or repacked in the zone is to be transferred to customs territory otherwise than for exportation, a zone withdrawal on customs Form 7505 shall be filed as an application for the transfer (see § 30.4). Such withdrawal shall be supported by a bond on customs Forms 7551, 7553, or other appropriate form, and the applicant shall pay the liquidated duties and determined taxes, as assessed in the liquidation of the pertinent zone customs entry, for the quan

tity of merchandise to be transferred Such bond shall not be required wha all the merchandise to be transferred to customs territory has been inspected examined, and appraised, and has bee found to comply with all laws and reg ulations governing its admission into the commerce of the United States, and there have been produced all documents for the production of which a bond required by law or regulations if no filed at the time of entry. If the per tinent zone customs entry has not been liquidated estimated duties and taxes shall be deposited. Upon acceptance the withdrawal, the collector shall re lease the merchandise to the grantee for delivery.

(c) When a product of a manipula tion or manufacture in a zone composed of or derived from privileged merchandise only, whether all foreign, or partly foreign and partly domestic, is to be transferred to customs territory otherwise than for exportation, a zone with-i drawal shall be filled as prescribed in paragraph (b) of this section. There shall be filed with the withdrawal statement in the form of an invoice con taining the information specified in § 30.12 (e), and when necessary to sup port the withdrawal, application may be made for a certificate on zone Form F covering identification as shown b the customs records of any privileged domestic or privileged foreign merchan dise used in the manipulation or manufacture.

(d) When merchandise described in paragraph (b) or (c) of this section is ta be transferred to customs territory otherwise than for exportation and it desired to pay the duties and taxes at s port other than the port in which the zone is located, the merchandise shall b withdrawn for transportation to the other port on customs Form 7512 which shall clearly indicate the status of the merchandise, and the withdrawal fo consumption at the other port shall be made in the manner prescribed in para graph (b) or (c) of this section except that customs Form 7519 shall be used The collector at the zone port shall issut a certificate in triplicate, describing the merchandise in its present condition an certifying the amount of duties and taxa and applicable to the shipment, and the duplicate copy of such certificate shall be given to the importer to be filled with the withdrawal for consumption.