[Federal Register Volume 65, Number 96 (Wednesday, May 17, 2000)]
[Rules and Regulations]
[Pages 31260-31261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-12367]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 19

[T.D. 00-33]
RIN 1515-AC53


Location of Duty-Free Stores

AGENCY: Customs Service, Treasury.

ACTION: Final rule.

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SUMMARY: This document amends the Customs Regulations to conform with 
the provisions of the Miscellaneous Trade and Technical Corrections Act 
of 1999 regarding the permissible location of a duty-free store. In 
addition to the existing permissible locations, a duty-free store that 
is an airport store as defined in the law may also be located in, or 
within 25 statute miles of, any staffed port of entry, whether or not 
it is the same port through which a purchaser at the store will depart 
from

[[Page 31261]]

the Customs territory of the United States.

EFFECTIVE DATE: May 17, 2000.

FOR FURTHER INFORMATION CONTACT: William G. Rosoff, Duty and Refund 
Determination Branch, (202-927-2077).

SUPPLEMENTARY INFORMATION:

Background

    Duty-free sales enterprises, also known as duty-free stores, are 
Customs bonded class 9 warehouses that operate under special procedures 
that allow merchandise to be offered for sale to departing travelers 
without payment of Customs duties and taxes, on condition that the 
merchandise they purchase will be exported by and with them from the 
Customs territory of the United States. The statutory authority under 
which duty-free stores operate is found in 19 U.S.C. 1555(b). The 
regulations that implement procedures for the administration of these 
facilities are contained in Secs. 19.35 through 19.39 of the Customs 
Regulations (19 CFR 19.35-19.39).
    The Miscellaneous Trade and Technical Corrections Act of 1999, Pub. 
L. 106-36, 113 Stat. 127 (June 25, 1999) (MTTCA), amended a number of 
Customs laws, including the provision relating to duty-free stores (19 
U.S.C. 1555(b)). Specifically, section 2417 of the MTTCA amended 
section 1555(b) to expand upon the places where a duty-free store could 
properly be located in the United States.

Location of a Duty-Free Store; Prior Law

    Section 1555(b) previously required that a duty-free store be 
located within the port of entry from which a purchaser of duty-free 
store merchandise departs from the Customs territory of the United 
States, or within 25 statute miles of the exit point from which the 
purchaser departs from the Customs territory. Section 19.35(b) repeats 
this requirement regarding the permissible location of a duty-free 
store.

Location of a Duty-Free Store; Amended Law

    Section 2417 of the MTTCA amended 19 U.S.C. 1555(b) to allow a 
duty-free store to be located anywhere within a staffed, Customs-
defined port of entry, or within 25 statute miles of a staffed port of 
entry, whether or not it is the same port through which a purchaser of 
duty-free store merchandise will depart from the Customs territory of 
the United States, provided that the purchaser will depart through an 
international airport located in the Customs territory (19 U.S.C. 
1555(b)(2)(C)). As such, the duty-free store that is the subject of the 
amendment must be an airport store as defined in 19 U.S.C. 
1555(b)(8)(A).
    As is already the case under the law, the Customs Service, before 
authorizing a duty-free store at such a location, must conclude that 
reasonable assurance has been provided that merchandise purchased at 
the store will be exported from the Customs territory. To this end, a 
duty-free store that is an airport store must establish procedures that 
provide reasonable assurance that merchandise sold by the store will be 
exported from the Customs territory through an international airport 
located within the Customs territory (19 U.S.C. 1555(b)(2)(C), (3)(A) 
and (8)(A); 19 CFR 19.36(b); see also 19 CFR 19.36(f) and 19.39(c)).
    The statutory amendment was intended to create additional 
opportunities for duty-free stores to increase sales by increasing the 
locations where international travelers departing from the United 
States may make duty-free store purchases.
    Accordingly, Sec. 19.35(b), Customs Regulations, is amended to 
conform to the statutory amendment by providing that an airport store 
may also be located within any staffed port of entry, or within 25 
statute miles of a staffed port.

Regulatory Flexibility Act, Executive Order 12866 and 
Inapplicability of Public Notice and Comment and Delayed Effective 
Date Requirements

    Because the amendment in this final rule merely conforms the 
Customs Regulations to law, notice and public procedure are 
inapplicable and unnecessary pursuant to 5 U.S.C. 553(b)(B), and, 
pursuant to 5 U.S.C. 553(d)(3), a delayed effective date is not 
required. Because no notice of proposed rulemaking is required, it is 
not subject to the provisions of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.). Nor does the amendment result in a ``significant 
regulatory action'' under E.O. 12866.

List of Subjects in 19 CFR Part 19

    Customs duties and inspection, Exports, Imports, Reporting and 
recordkeeping requirements, Warehouses.

Amendment to the Regulations

    Part 19, Customs Regulations (19 CFR part 19), is amended as set 
forth below.

PART 19--CUSTOMS WAREHOUSES, CONTAINER STATIONS, AND CONTROL OF 
MERCHANDISE THEREIN

    1. The general authority citation for part 19 and the relevant 
sectional authority citation continue to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 20, 
Harmonized Tariff Schedule of the United States), 1624.
* * * * *
    Sections 19.35-19.39 also issued under 19 U.S.C. 1555;
* * * * *

    2. Section 19.35 is amended by revising paragraph (b) to read as 
follows:


Sec. 19.35  Establishment of 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.
* * * * *

Raymond W. Kelly,
Commissioner of Customs.
    Approved: March 30, 2000.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 00-12367 Filed 5-16-00; 8:45 am]
BILLING CODE 4820-02-P