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the right not to accept for inclusion in the record any papers containing data for which confidential treatment is sought. [Order 74, 32 F.R. 13714, Sept. 30, 1967]
GRANTS SUBJECT TO CONDITIONS § 400.700 Failure to comply with conditions of grant.
Should the grantee fail to comply with any of the conditions of a zone or subzone grant issued by the Board, including the provisions concerning construction and commencement of operations, the Board may revoke the grant or declare it null and void. In such cases the Board may issue an order to show cause why the action it contemplates should not be taken, and the grantee shall have 30 days in which to answer. [Order 86, 36 F.R. 24930, Dec. 24, 1971]
NOTE: The amendment at 36 F.R. 24930 is effective 30 days after publication. For the convenience of the user, the superseded text is set forth below.
Penalty for delay.
Should the grantee fail to commence construction, diligently to carry construction to completion, and to set up and commence operation of the zone with zeal and ability, within the time stated in the grant, on a proper showing of negligence before the Board, the grantee shall be considered as having failed to comply with the conditions set forth in its application, and the grant shall become null and void. The grantee may, however, petition the Board for an extension of time for commencing and completing construction and for setting up and commencing operation of the zone, provided such petition shall be filed with the Board before the expiration of the time specified in the grant (or any extension thereof) for which an extension is desired. The Board may grant the petition provided a proper showing has been made that the extension is in the public interest.
Disposition of grant prohib
The grant shall not be sold, conveyed. transferred, set over, or assigned. (Sec. 17, 48 Stat. 1002; 19 U.S.C. 81q) § 400.702 Special conditions.
Special conditions applicable to a particular zone may be required by the Board and inserted in the grant for that
OPERATION OF ZONE
§ 400.800 Operations in zone, and forms and procedures.
chandise in a zone, the zone status of the merchandise and special provisions applicable to each status, the subsequent importation of merchandise exported from a zone, and other operations in a zone authorized by the act, are hereinafter in this part generally described. The zone forms 1 required are appended to these regulations and made a part thereof, and the procedures required are set forth in Customs regulations relating to foreign-trade zones (19 CFR Part 146), and the regulations and schedules of rates and charges made and fixed by the zone grantee and approved by the Board. [Order 29, 17 F.R. 5316, June 11, 1952 as amended by Order 86, 36 F.R. 24930, Dec. 24, 1971]
The merchandise and operations permitted in a zone, the disposition of mer
Merchandise permitted in a
Foreign and domestic merchandise of every description, except such as is prohibited by law, may, without being subject to the customs laws of the United States, except as otherwise provided in the act and the regulations made thereunder, be brought into a zone.
(a) Merchandise which is specifically and absolutely prohibited by law shall not be admitted into a zone. Any merchandise so prohibited by law which is found within a zone shall be disposed of in the manner provided for in the laws and regulations applicable to such merchandise. A distinction is made between (1) merchandise which is specifically and absolutely prohibited by law on the grounds of policy or morals, such as immoral or subversive literature, obscene articles, or lottery matter, and (2) conditionally admissible merchandise which may be imported under certain conditions, for example, articles which are subject to permits or licenses for the protection of economic or national security or which may be reconditioned to bring them into compliance with the laws administered by various Federal agencies. District Directors of Customs are required to exclude the first class of articles and may not permit them to be transferred to a zone if they are aware of their prohibited status, except that the collector may permit the temporary deposit of any such merchandise in the zone pending final determination of its status. The transfer of articles of the second class to a zone is subject to
1 Zone Forms B, C, D, E, F fled, as part of original document.
any requirements of the Federal agency concerned. Unless otherwise prohibited, over-quota merchandise may be placed in a zone pending its right to transfer to customs territory pursuant to the applicable quota provisions.
(b) The application for the admission of merchandise into a zone shall be approved or disapproved by the District Director of Customs, as the representative of the Board, where the merchandise is not excluded by any other Federal agency having jurisdiction over the merchandise. [Order 29, 17 F.R. 5316, June 11, 1952, as amended by Order 74, 32 F.R. 13714, Sept. 30, 1967; Order 86, 36 F.R. 24930, Dec. 24, 1971]
In general, merchandise lawfully brought into a zone may, in accordance with these and other regulations made under the provisions of the act be exported, destroyed, or sent into customs territory of the United States therefrom, in the original package or otherwise; but when foreign merchandise, and domestic merchandise whose identity has been lost, is so sent from a zone into customs territory of the United States it shall be subject to the laws and regulations of the United States affecting imported merchandise.
[Order 29, 17 F. R. 5316, June 11, 1952] § 400.803 Manipulation, manufacture, and exhibition of merchandise.
In general, merchandise, lawfully brought into a zone may, in accordance with these and other regulations made under the provisions of the act, be stored, sold, exhibited, broken up, repacked, assembled, distributed, sorted, graded, cleaned, mixed with foreign and domestic merchandise, or otherwise manipulated, or be manufactured, except as otherwise provided by the act.
(a) Permission for any manipulation, manufacture, or exhibition in a zone shall be obtained from the District Director of Customs, as the representative of the Board, subject to such application and procedure prescribed by the Secretary of the Treasury for the protection of the revenue.
(b) In the event of the denial of any application by the District Director of Customs for any reason, the applicant, the grantee, 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.
[Order 29, 17 F.R. 5316, June 11, 1952, as amended by Order 74, 32 F.R. 13714, Sept. 30, 1967]
Status of merchandise in a
(a) For the purposes of the act and the regulations of this part, all merchandise within a zone, except merchandise in transit through a zone as provided in § 146.14 of customs regulation,* and except merchandise temporarily transferred to a zone for manipulation as provided in paragraph (b) of this section, shall be given a zone status as:
(1) Privileged foreign merchandise, (2) Privileged domestic merchandise, (3) Non-privileged foreign merchandise,
(b) Imported merchandise which has been entered and which has remained in continuous customs custody may be temporarily transferred to a zone for manipulation under customs supervision pursuant to section 562, Tariff Act of 1930, as amended, and for return to customs territory. Any such merchandise shall not be considered within the purview of the Foreign-Trade Zones Act, but shall be treated in all respects as though remaining in customs territory. Therefore no zone form or procedure shall be considered applicable, but the merchandise shall remain subject in the zone to
2 19 CFR Part 146.
such requirements as are necessary for the enforcement of section 562 and other pertinent customs laws.
[Order 29, 17 F.R. 5316, June 11, 1952, as amended by Order 86, 36 F.R. 24930. Dec. 24, 1971]
Use of zone by carriers.
The water area, docking facilities, and loading or unloading stations of a zone are intended primarily for the use of vessels, vehicles, or aircraft unlading merchandise into the zone or lading merchandise from the zone, and their use for other purposes may be terminated by the Secretary of the Treasury if found to endanger the revenue, or by the Board if found to interfere with the primary uses of the zone.
[Order 29, 17 F. R. 5317, June 11, 1952] § 400.806 Subsequent importation of zone merchandise.
Articles produced or manufactured in a zone and exported therefrom shall, on subsequent importation into the customs territory of the United States, be subject to the import laws applicable to like articles manufactured in a foreign country, except that articles produced or manufactured in a zone exclusively with the use of domestic merchandise, the identity of which has been maintained in accordance with the second proviso of section 3 of the act, as amended, may, on such importation, be entered as American goods returned.
[Order 29, 17 F. R. 5317, June 11, 1952] § 400.807 Exclusion from zone of goods or process of treatment.
When it shall be reported to the Board that any goods or process of treatment is detrimental to the public interest, health, or safety, the Board shall cause such investigation to be made as it may deem necessary. The Board may order the exclusion from the zone of any goods or process of treatment that in its judgment is detrimental to the public interest, health. or safety.
(Sec. 15, 48 Stat. 1002; 19 U. S. C. 810) [Redesignated by Order 29, 17 F. R. 5316, June 11, 1952]
proval shall be accompanied by a sworn statement, subscribed to by the applicant before a duly authorized officer to administer oaths, setting forth in detail the nature of the retail trade to be conducted, and containing an agreement that such applicant will sell no goods, except of the kinds specifically authorized by the act, which are brought into the zone from customs territory. No goods shall be offered for sale or sold in a zone which are not of the same kind and quality permitted to be offered for sale or sold in the political jurisdiction in which the zone is located. If the permittee violates any provision of the regulations in this part, his permit shall be revoked by the grantee, who shall immediately report such action to the Board.
§ 400.808 Retail trade within zone.
No retail trade shall be conducted within a zone except under permits issued by the grantee and approved by the Board. Such permittees shall sell no goods except such domestic or duty-paid or duty-free goods as are brought into the zone from customs territory. Permits which are sent to the Board for ap
(Sec. 15, 48 Stat. 1002; 19 U.S.C. 810) [Redesignated by Order 29, 17 F.R. 5316, June 11, 1952]
§ 400.809 Residence within zone.
No person shall be allowed to reside within a zone except Federal, State, or municipal officers or agents whose resident presence is deemed necessary by the Board.
(Sec. 15, 48 Stat. 1002; 19 U.S.C. 810) [Redesignated by Order 29, 17 FR. 5317, June 11, 1952]
§ 400.810 Employees and persons enter. ing and leaving zone.
Employees and other persons entering or leaving a zone shall pass through the designated entrances and exits in the enclosure surrounding the zone, except that ships' crews and passengers, duly authorized pilots and helmsmen, and employees of the Federal Government may enter or leave aboard vessels arriving at or departing from the zone; and except that crews of service vessels, such as ship chandlers' boats, tug boats, water boats, fuel barges, cargo lighters, and barges, and crews of floating equipment for use in connection with vessel repairs or maintenance, or for maintenance of structures of the zone or its channels or slips, may enter or leave a zone by way of prescribed water routes or courses. Employees and other persons shall be subject to such examination upon entering and leaving a zone as the collector may deem necessary for the protection of the revenue.
(Sec. 15, 48 Stat. 1002; 19 U.S.C. 810) [Redesignated by Order 29, 17 F.R. 5317, June 11, 1952]
§ 400.811 All persons entering zone bound by regulations.
All persons entering a zone for any reason whatsoever shall be bound by the regulations promulgated by the Board and by the operator of the zone. [Redesignated by Order 29, 17 F. R. 5317, June 11, 1952]
Identification of employees
All persons on duty within, and in connection with the operation of, a zone, with the exception of Federal employees and uniformed employees of the zone shall be required while within the zone to carry identification cards or wear appropriate identification badges to be provided by the operator of the zone. [Redesignated by Order 29, 17 F. R. 5317. June 11, 1952] § 400.813
Hours of business and service.
Hours of business and service, for customs purposes, shall be the same as those prescribed in Customs regulations. (19 CFR Chapter 1)
[Order 29, 17 F. R. 5317, June 11, 1952]
§ 400.814 Payment of customs officers and employees.
(a) The cost of maintaining the customs service in a zone shall be paid monthly by the grantee of such zone to the District Director of Customs.
(b) Customs officers and employees performing services in a zone at night, or on Sundays and holidays, shall receive extra compensation, to be computed as and under the conditions prescribed by Customs regulations.
(c) For the purpose of computing extra compensation the word "night" shall be construed to mean the time from 5:00 p. m. to 8:00 a. m. and the word "holiday" shall include only national holidays, viz., January 1, February 22, May 30, July 4, the first Monday in September, November 11, the fourth Thursday in November, and December 25, and such other days as may be made national holidays.
(d) In a zone at a port where customary working hours are other than those herein mentioned, the District Director of Customs is authorized to regulate the hours of customs officers and employees assigned to the zone so as to agree with prevailing working hours in said port, but nothing herein shall be construed in any manner to affect or alter the length of a working day for customs
The grantee may, with the approval of the Board, and under reasonable and uniform regulations for like conditions and circumstances to be prescribed by it, permit other persons, firms, corporations, or associations to erect such buildings and other structures within the zone as will meet their particular requirement: Provided, (a) That such permission shall not constitute a vested right as against the United States, nor interfere with the regulation of the grantee or the permittee by the United States, nor interfere with or complicate the revocation of the grant by the United States; (b) that in the event of the United States or the grantee desiring to acquire the property of the permittee, no good will shall be considered as accruing from the privilege granted to the zone; and (c) that such permits shall not be granted on terms that conflict with the public use of the zone as set forth in the act: And provided further, That accepted sanitary practices be followed in the construction, equipment, and operation of such buildings and other structures.
control of the Board in accordance with the provisions of the act and the regulations of the Board in this part, (b) the regulations relating to foreign-trade zones of the Bureau of Customs for the protection of the revenue (19 CFR Part 146) and any other law, regulation, or instruction the Customs Service is required or authorized to enforce, (c) such other applicable laws and regulations thereunder of other Federal agencies, and (d) the regulations and schedules of rates and charges made and fixed by the grantee and approved by the Board. The District Director of Customs in whose district the zone is located shall, in addition to his duties as District Director of Customs, be in local charge of the zone as the resident representative of the Board. He may call upon the district engineer and local representatives of other governmental departments and agencies for advice in matters of operation, maintenance, and administration.
tem of Accounts, Records, and Reports”, approved February 6, 1939.
[Order 29, 17 F. R. 5317, June 11, 1952]
Every grantee of a zone shall keep its books, records, and accounts in the form and manner prescribed in "Uniform Sys
EFFECTIVE DATE NOTE: § 400.1002a was revoked at 36 F.R. 24930, Dec. 24, 1971, effective 30 days after publication.
NOTE: The Executive Director of ForeignTrade Zones Operations may, from time to time, upon appropriate notice, modify the requirements as set forth in Part "B" of the Uniform System of Accounts, Records, and Reports for the annual reports of the Zone Grantees as necessary to eliminate duplication of information separately required for Customs purposes and so as to minimize the cost of complying with such requirements. [Order 38, 20 F. R. 1130, Feb. 24, 1955]
§ 400.1003 Zones to be operated as public utilities.
(a) All rates and charges for all services or privileges within the zone shall be fair and reasonable, and the grantee shall afford to all who may apply for the use of the zone and its facilities and appurtenances uniform treatment under like conditions, subject to such treaties or commercial conventions as are now in force or may hereafter be made from time to time by the United States with foreign governments.
(b) Schedules containing all the rates and charges shall be published, posted, and filed with, and subject to the approval of the Board. Full instructions concerning the publication, posting, and filing of such schedules will be issued by the Board. One copy of each tariff required to be filed with any State regulatory body shall also be filed with the Board.
(c) Where applicable, the operator of the zone will remain subject to the requirements of the Shipping Act, 1916, as amended (46 U.S.C. secs. 801 et seq.) and to the provisions of the Interstate Commerce Act (49 U.S.C. secs. 1 et seq.)
(Sec. 14, 48 Stat. 1001; 19 U.S.C. 81n) [Regulations, June 1935, as amended by Order 86, 36 F.R. 24930, Dec. 24, 1971]
§ 400.1004 Inspection of zones.
Representatives of the Board will inspect, from time to time, the operations of the zones for the purpose of informing the Board whether the provisions of the act and the regulations in this part are being met. The operators of the zones shall comply fully with the requirements of such representatives, and make available to them such records and reports
3 See §§ 400.1007-400.1013.