2908 Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Rules and Regulations

Part 97 of the Federal Aviation

Regulations (VOL 60 FR No. 239 Page

63905, dated Wednesday, December 13,

1995) under Section 97.25 effective

February 29, 1996 which is hereby

rescinded: Blacksburg, VA, Virginia

Tech, LOC RWY 12, Amdt 4.

[FR Doc. 96–1739 Filed 1–29–96; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 10, 113, 141, 144 and 181

[T.D. 96–14]

RIN 1515–AB87

North American Free Trade Agreement

(NAFTA)—Implementation of DutyDeferral Program Provisions

AGENCY: Customs Service, Treasury.

ACTION: Interim regulations; solicitation

of comments.

SUMMARY: In response to comments

received on the final rule implementing

NAFTA, this document sets forth

interim regulations establishing

procedural and other requirements that

apply to the collection, waiver and

reduction of duties under the dutydeferral program provisions of the North

American Free Trade Agreement. The

document prescribes the documentary

and other requirements that must be

followed when merchandise is

withdrawn from a U.S. duty-deferral

program either for exportation to

another NAFTA country or for entry

into a duty-deferral program of another

NAFTA country, the procedures that

must be followed in filing a claim for a

waiver or reduction of duties collected

on such merchandise, and the

procedures for finalization of duty

collections and duty waiver or

reduction claims.

DATES: Interim rule effective January 1,

1996; comments must be submitted by

April 1, 1996.

ADDRESSES: Written comments

(preferably in triplicate) may be

addressed to the Regulations Branch,

U.S. Customs Service, Franklin Court,

1301 Constitution Avenue, N.W.,

Washington, D.C. 20229. Comments

submitted may be inspected at the

Regulations Branch, Office of

Regulations and Rulings, Franklin

Court, 1099 14th Street, NW., Suite

4000, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Angela Downey, Office of Field

Operations (202–927–1082).

SUPPLEMENTARY INFORMATION:

Background

On September 6, 1995, Customs

published in the Federal Register (60

FR 46334) a document which adopted,

as a final rule, interim regulations

implementing the Customs-related

provisions of the North American Free

Trade Agreement (NAFTA) which was

adopted by the United States with the

enactment of the North American Free

Trade Agreement Implementation Act

(the ‘‘Act’’), Public Law 103–182, 107

Stat. 2057. The majority of the NAFTA

implementing regulations are set forth

in Part 181 of the Customs Regulations

(19 CFR Part 181) which includes, in

Subpart E, regulations implementing the

NAFTA drawback (including dutydeferral) provisions of Article 303 of the

NAFTA and section 203 of the Act

which apply to goods imported into the

United States and then subsequently

exported from the United States to

Canada on or after January 1, 1996, or

to Mexico on or after January 1, 2001.

Within Subpart E of Part 181, § 181.53

specifically addresses the provisions

concerning the collection, and waiver or

reduction, of duty on goods imported

into the United States pursuant to a

duty-deferral program (that is, imported

into a manipulation warehouse,

manufacturing warehouse, smelting or

refining warehouse or foreign trade

zone, or imported under a temporary

importation bond) and subsequently

exported, or used as a material in the

production of another good that is

exported, to Canada or Mexico.

Paragraph (a)(1) defines the term ‘‘dutydeferral program’’ for purposes of the

section. Paragraph (a)(2) provides that

the exported good shall be treated as if

it had been entered or withdrawn for

consumption and thus subject to duty.

Paragraph (a)(3) states that Customs

shall waive or reduce, in accordance

with paragraphs (b) through (f), the

duties paid or owed under paragraph

(a)(2) provided that evidence of

exportation and satisfactory evidence of

duties paid in Canada or Mexico are

submitted within 60 calendar days of

the date of exportation. Paragraphs (b)

through (f) set forth the duty assessment

and waiver or reduction rules with

reference to each type of duty-deferral

program, and each of these paragraphs

provides that the duty shall be waived

or reduced in an amount that does not

exceed the lesser of the total amount of

duty payable under the section or the

total amount of customs duties paid to

Canada or Mexico.

In the discussion of public comments

submitted on the interim NAFTA

implementing regulations, the

September 6, 1995, final rule document

noted that a number of commenters

raised questions regarding the

procedures, including documentary

requirements, that would apply for

purposes of the collection and waiver or

reduction of duty under § 181.53. In

responding to these comments, Customs

agreed that the regulations should

specifically address such procedural

issues. Customs further stated that it

would be preferable to address these

issues in a separate Federal Register

document, with a view to having

appropriate regulations in place on

January 1, 1996, when the Subpart E

regulations go into effect (that is, with

regard to goods exported to or entered

into a duty-deferral program in Canada).

The regulatory amendments set forth in

this document are intended to

accomplish that purpose.

Discussion of Amendments

Section 10.31

In § 10.31, which concerns temporary

importations under bond, paragraph (h)

is amended by adding at the end a new

sentence regarding merchandise

imported under subheading 9813.00.05,

HTSUS, that is exported to Canada or

Mexico, because the entry and bond

requirements under amended § 181.53

may apply to such merchandise.

Section 113.62

In § 113.62, which sets forth the basic

importation and entry bond conditions,

paragraphs (a) and (b) are amended by

the addition of references to the

withdrawal of merchandise from a dutydeferral program either for exportation

to Canada or Mexico or for entry into a

duty-deferral program in Canada or

Mexico because such transactions will

involve the filing of an entry under

amended § 181.53 as discussed below.

Paragraph (a) concerns the agreement to

pay duties, taxes and fees, and

paragraph (b) concerns the agreement to

make or complete entry.

Section 141.0a

The definition of ‘‘entry’’ in paragraph

(a) and the definition of ‘‘entered for

consumption’’ in paragraph (f) have

been expanded by the addition of a

sentence at the end referring to

documentation required under amended

§ 181.53 as discussed below.

Section 141.68

A new paragraph (i) has been added

to § 141.68 (time of entry) regarding

merchandise covered by the entry

procedures contained in amended

§ 181.53 as discussed below.
Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Rules and Regulations 2909

Section 144.38

In § 144.38, which concerns

withdrawals for consumption, a new

paragraph (b) has been added to cover

withdrawals either for exportation to

Canada or Mexico or for entry into a

duty-deferral program in Canada or

Mexico.

Section 181.53

Section 181.53 is retitled to reflect

that the section also covers collection

(rather than only waiver or reduction) of

duty, and the section text is extensively

revised in order to accommodate the

necessary documentation and other

procedural requirements regarding the

collection and waiver or reduction of

duty under the NAFTA duty-deferral

provisions. In addition to editorial,

nonsubstantive changes to enhance the

clarity of the text, the revised text

incorporates a number of organizational

and substantive changes that are

outlined below.

Paragraph (a)(1) is retitled as a

definitions paragraph and a new

definition of ‘‘date of exportation’’ has

been added as subparagraph (i) thereof.

Paragraph (a)(2) still concerns the

‘‘treatment as entered or withdrawn for

consumption’’ principle but is divided

into the following subparagraphs:

1. Subparagraph (i) incorporates the

provisions of former paragraph (a)(2)

and also includes two new principles

stating that the documentation required

to be filed under the section shall

constitute an entry or withdrawal for

consumption for purposes of the

Customs Regulations and that any

assessment of duty under this section

shall include the duties and fees

referred to in §§ 181.42 (a)–(c) (that is,

antidumping and countervailing duties,

premiums on quota, tariff rate quota or

tariff preference level goods, and fees

under section 22 of the Agricultural

Adjustment Act) and the fees provided

for in § 24.23 (that is, fees for processing

merchandise). Subparagraph (i) refers to

goods withdrawn for exportation to

Canada or Mexico (subparagraph (i)(A))

and goods withdrawn and entered into

a duty-deferral program in Canada or

Mexico (subparagraph (i)(B)) because

Canada, Mexico and the United States

(the three NAFTA Parties) agreed that

goods withdrawn from a duty-deferral

program in one NAFTA country and

entered into a duty-deferral program in

another NAFTA country shall be

deemed not to have been exported (see

section F, article X of the ‘‘Regulatory

Standards for Implementation of the

North American Free Trade Agreement’’

published in the Federal Register on

September 6, 1995, at 60 FR 46464).

2. Subparagraph (ii) is new and

provides for application of the bond

provisions of § 142.4 to each withdrawal

and exportation transaction under

§ 181.53.

3. Subparagraph (iii) is a new

provision covering documentation filing

and duty payment procedures.

Subparagraph (A) thereunder specifies

the persons who must file the

documentation required under the

section. Subparagraph (B) provides for

the filing of a Customs Form 7501

within 10 working days of the date of

exportation or within 10 working days

after being entered into a duty-deferral

program in Canada or Mexico.

Subparagraph (C) concerns duty

payment and requires that the duty be

deposited with Customs at any time

prior to, but no later than, 60 calendar

days after the date of exportation of the

good or 60 calendar days after the date

the good is entered into a duty-deferral

program in Canada or Mexico, and

subparagraph (C) also provides for the

calculation of interest from the

applicable 60th calendar day.

Paragraph (a)(3) is retitled ‘‘waiver or

reduction of duties’’ and is divided into

the following subparagraphs:

1. Subparagraph (i) incorporates the

provisions of former paragraph (a)(3) but

also includes two new substantive

provisions. The first of these new

provisions consists of an exception

clause at the beginning of the

subparagraph regarding duties and fees

referred to in §§ 181.42 (a)–(c) and fees

provided for in § 24.23, because such

duties and fees may not be waived or

reduced under the NAFTA drawback

(including duty-deferral) provisions.

The second of these new substantive

provisions requires the filing of a

‘‘claim’’ for waiver or reduction of

duties and states that the claim shall be

‘‘based on’’ evidence of exportation to

Canada or Mexico or of entry into a

duty-deferral program in Canada or

Mexico and satisfactory evidence of

duties paid in Canada or Mexico. The

‘‘based on’’ provision replaces the

former requirement of submission of

such evidence, is modeled on the

approach used for NAFTA preferential

duty claims (see § 181.21(a) of the

NAFTA regulations), and is intended to

reduce the paperwork burden and to

facilitate electronic filings.

2. Subparagraph (ii) is a new

provision covering the procedures for

filing claims and paying reduced duties.

This subparagraph requires that the

claim be filed on Customs Form 7501

which must include specified Canadian

or Mexican import information and

provides that any reduced duties must

be deposited with Customs when a

claim for reduced duties is filed.

3. Subparagraph (iii) is a new

provision which provides for the filing

of a drawback claim if goods entered

into a Canadian or Mexican dutydeferral program are subsequently

withdrawn from that duty-deferral

program.

Paragraph (a)(4) is a new provision

setting forth procedures regarding the

liquidation of entries filed under

§ 181.53 both if no claim for waiver or

reduction of duties is filed

(subparagraph (i)) and if a claim is filed

(subparagraph (ii)). This paragraph

generally reflects existing statutory and

regulatory standards regarding

liquidations, including notices of

liquidation, deemed liquidations, and

the time for filing protests after

liquidation. In addition, in cases in

which a claim is filed, this paragraph

provides for an automatic 3-year

extension of liquidation, because

Customs will require additional time to

obtain any information from Canadian

or Mexican Customs necessary to verify

a claim (see § 181.50(b) which provides

for a 3-year delay in liquidation of

drawback claims).

Former paragraphs (b) through (f) are

redesignated as subparagraphs (1)

through (5) under a new paragraph (b)

titled ‘‘assessment and waiver or

reduction of duty’’. The introductory

texts and/or examples in newly

designated paragraphs (b) (1)–(5), each

of which still deals with a separate type

of duty-deferral program, have been

modified as follows: (1) by replacing the

references to evidence of exportation

and payment of duty by references to

the filing of a proper claim under

paragraph (a)(3) of the section; (2) to

refer, where appropriate, to the filing of

Customs Form 7501; and (3) by revising

the examples to more accurately reflect

a NAFTA duty-deferral context. In

addition, the example concerning

manipulation in warehouse (former

paragraph (b), now paragraph (b)(1)) has

been removed because it no longer

reflects current law as interpreted by the

courts (see Tropicana Products Inc. v.

U.S., 789 F.Supp. 1154, 16 CIT 155

(1992)). Finally, an exception regarding

a good imported from Canada or Mexico

for repair or alteration has been added

at the beginning of the text covering

temporary importation under bond

(former paragraph (f), now paragraph

(b)(5)), in order to reflect the terms of

article 307(2) of the NAFTA.

Paragraph (c) concerns recordkeeping

and corresponds to former paragraph (g)

but includes a new requirement that

evidence of exportation or of entry into

a Canadian or Mexican duty-deferral
2910 Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Rules and Regulations

program and payment of Canadian or

Mexican duty be maintained by the

person who files a claim for waiver or

reduction of duty under the section.

Paragraph (d) corresponds to former

paragraph (h) and differs from the

former text in referring to a failure to file

a proper claim (rather than to a failure

to provide evidence of duties paid or

owed to Canada or Mexico) and also in

referring more specifically to the

persons who are liable for the payment

of full duties.

Finally, paragraph (e) corresponds to

former paragraph (i) but has been

modified to refer to reliquidation of the

‘‘entry filed under this section pursuant

to 19 U.S.C. 1508(b)(2)(B)(iii) even after

liquidation of the entry has become

final’’ (see § 181.50(b)).

Comments

Before adopting these interim

regulations as a final rule, consideration

will be given to any written comments

timely submitted to Customs. Comments

submitted will be available for public

inspection in accordance with the

Freedom of Information Act (5 U.S.C.

552), § 1.4, Treasury Department

Regulations (31 CFR 1.4), and

§ 103.11(b), Customs Regulations (19

CFR 103.11(b)), on regular business days

between the hours of 9 a.m. and 4:30

p.m. at the Regulations Branch, Office of

Regulations and Rulings, U.S. Customs

Service, Franklin Court, 1099 14th

Street, NW., Suite 4000, Washington,

DC.

Inapplicability of Notice and Delayed

Effective Date Requirements

Pursuant to the provisions of 5 U.S.C.

553(a), public notice is inapplicable to

these interim regulations because they

are within the foreign affairs function of

the United States. The United States is

obligated under Chapter Three of the

NAFTA to implement the NAFTA dutydeferral provisions with respect to

exportation to Canada on January 1,

1996. Furthermore, for the same reason,

it is determined that good cause exists

under the provisions of 5 U.S.C.

553(d)(3) for dispensing with a delayed

effective date.

Executive Order 12866

Because this document involves a

foreign affairs function of the United

States and implements an international

agreement, it is not subject to the

provisions of E.O. 12866.

Regulatory Flexibility Act

Because no notice of proposed

rulemaking is required for interim

regulations, the provisions of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.) do not apply.

Paperwork Reduction Act

These regulations are being issued

without prior notice and public

procedure pursuant to the

Administrative Procedure Act (5 U.S.C.

553). For this reason, the collections of

information contained in these

regulations have been reviewed and,

pending receipt and evaluation of

public comments, approved by the

Office of Management and Budget in

accordance with the requirements of the

Paperwork Reduction Act (44 U.S.C.

3507) under control number 1515–0208.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless the collection of information

displays a valid control number.

The collection of information in these

regulations is in § 181.53. This

information is required in connection

with the withdrawal of goods from U.S.

duty deferral programs for export to

Canada or Mexico and will be used by

the U.S. Customs Service both to

determine the amount of duty to be

collected on the exported goods and to

determine eligibility for a waiver or

reduction of such duty. The likely

respondents are business organizations

including importers, exporters and

manufacturers.

Estimated total annual reporting and/

or recordkeeping burden: 405,070 hours.

Estimated average annual burden per

respondent/recordkeeper: 227 hours.

Estimated number of respondents

and/or recordkeepers: 1783.

Estimated annual frequency of

responses: 1,069,800.

Comments are invited on: (a) Whether

the collection of information is

necessary for the proper performance of

the functions of the agency, including

whether the information shall have

practical utility; (b) the accuracy of the

agency’s estimate of the burden of the

collection of information; (c) ways to

enhance the quality, utility, and clarity

of the information to be collected; and

(d) ways to minimize the burden of the

collection of information on

respondents, including through the use

of automated collection techniques or

other forms of information technology.

Comments should be directed to the

Office of Management and Budget,

Attention: Desk Officer for the

Department of the Treasury, Office of

Information and Regulatory Affairs,

Washington, DC 20503. A copy should

also be sent to the Regulations Branch,

Office of Regulations and Rulings, U.S.

Customs Service, 1301 Constitution

Avenue, NW., Washington, DC 20229.

Drafting Information. The principal author

of this document was Francis W. Foote,

Office of Regulations and Rulings, U.S.

Customs Service. However, personnel from

other offices participated in its development.

List of Subjects

19 CFR Part 10

Alterations, Bonds, Customs duties

and inspection, Exports, Imports,

Preference programs, Repairs, Reporting

and recordkeeping requirements, Trade

agreements.

19 CFR Part 113

Air carriers, Bonds, Customs duties

and inspection, Exports, Foreign

commerce and trade statistics, Freight,

Imports, Reporting and recordkeeping

requirements, Vessels.

19 CFR Part 141

Bonds, Customs duties and

inspection, Entry of merchandise,

Invoices, Powers of attorney, Packaging,

Release of merchandise, Reporting and

recordkeeping requirements.

19 CFR Part 144

Bonds, Customs duties and

inspection, Reporting and

recordkeeping requirements,

Warehouses.

19 CFR Part 181

Administrative practice and

procedure, Canada, Customs duties and

inspection, Exports, Imports, Mexico,

Reporting and recordkeeping

requirements, Trade agreements (North

American Free-Trade Agreement).

Amendments to the Regulations

Accordingly, parts 10, 113, 141, 144

and 181, Customs Regulations (19 CFR

parts 10, 113, 141, 144 and 181), are

amended as set forth below.

PART 10—ARTICLES CONDITIONALLY

FREE, SUBJECT TO A REDUCED

RATE, ETC.

1. The authority citation for part 10

continues to read in part as follows:

Authority: 19 U.S.C. 66, 1202 (General

Note 20, Harmonized Tariff Schedule of the

United States), 1321, 1481, 1484, 1498, 1508,

1623, 1624, 3314;

* * * * *

2. In § 10.31, paragraph (h) is

amended by adding a new sentence at

the end to read as follows:

§ 10.31 Entry; bond.

* * * * *

(h) * * * However, a TIB importer

may be required to file an entry for

consumption and pay duties, or pay

liquidated damages under its bond for a

failure to do so, in the case of
Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Rules and Regulations 2911

merchandise imported under

subheading 9813.00.05, HTSUS, and

subsequently exported to Canada or

Mexico (see § 181.53 of this chapter).

PART 113—CUSTOMS BONDS

1. The authority citation for part 113

continues to read in part as follows:

Authority: 19 U.S.C. 66, 1623, 1624.

* * * * *

2. In § 113.62, the introductory texts

of paragraphs (a)(1) and (b) are revised

to read as follows:

§ 113.62 Basic importation and entry bond

conditions.

* * * * *

(a) Agreement to Pay Duties, Taxes,

and Charges.

(1) If merchandise is imported and

released from Customs custody or

withdrawn from a Customs bonded

warehouse into the commerce of, or for

consumption in, the United States, or

under § 181.53 of this chapter is

withdrawn from a duty-deferral program

for exportation to Canada or Mexico or

for entry into a duty-deferral program in

Canada or Mexico, the obligors

(principal and surety, jointly and

severally) agree to:

* * * * *

(b) Agreement to Make or Complete

Entry. If all or part of imported

merchandise is released before entry

under the provisions of the special

delivery permit procedures under 19

U.S.C. 1448(b), or released before the

completion of the entry under 19 U.S.C.

1484(a), or withdrawn from a dutydeferral program for either exportation

to Canada or Mexico or for entry into a

duty-deferral program in Canada or

Mexico before the filing of the

documentation provided for in

§ 181.53(a)(2) of this chapter, the

principal agrees to file within the time

and in the manner prescribed by law

and regulation, documentation to enable

Customs to:

* * * * *

PART 141—ENTRY OF MERCHANDISE

1. The authority citation for part 141

continues to read in part as follows:

Authority: 19 U.S.C. 66, 1448, 1484, 1624.

* * * * *

Section 141.68 also issued under 19

U.S.C. 1315;

* * * * *

2. In § 141.0a, paragraphs (a) and (f)

are amended by adding a sentence at the

end to read as follows:

§ 141.0a Definitions.

* * * * *

(a) Entry. * * * ‘‘Entry’’ also means

that documentation required by § 181.53

of this chapter to be filed with Customs

to withdraw merchandise from a dutydeferral program in the United States for

exportation to Canada or Mexico or for

entry into a duty-deferral program in

Canada or Mexico.

* * * * *

(f) Entered for consumption. * * *

‘‘Entered for consumption’’ also means

the necessary documentation has been

filed with Customs to withdraw

merchandise from a duty-deferral

program in the United States for

exportation to Canada or Mexico or for

entry into a duty-deferral program in

Canada or Mexico (see § 181.53 of this

chapter).

* * * * *

3. Section 141.68 is amended by

adding a new paragraph (i) to read as

follows:

§ 141.68 Time of entry.

* * * * *

(i) Exportation to Canada or Mexico of

goods imported into the United States

under a duty-deferral program defined

in § 181.53 of this chapter. When

merchandise in a U.S. duty-deferral

program is withdrawn for exportation to

Canada or Mexico or for entry into a

duty-deferral program in Canada or

Mexico, the date of entry is the date the

entry is required to be filed under

§ 181.53(a)(2)(iii) of this chapter.

PART 144—WAREHOUSE AND

REWAREHOUSE ENTRIES AND

WITHDRAWALS

1. The authority citation for part 144

continues to read in part as follows:

Authority: 19 U.S.C. 66, 1484, 1557, 1559,

1624.

* * * * *

2. Section 144.38 is amended by

adding a new paragraph (b) to read as

follows:

§ 144.38 Withdrawal for consumption.

* * * * *

(b) Withdrawal for exportation to

Canada or Mexico. A withdrawal for

exportation to Canada or Mexico or for

entry into a duty-deferral program in

Canada or Mexico is considered a

withdrawal for consumption pursuant

to § 181.53 of this chapter.

* * * * *

PART 181—NORTH AMERICAN FREE

TRADE AGREEMENT

1. The authority citation for part 181

continues to read as follows:

Authority: 19 U.S.C. 66, 1202 (General

Note 20, Harmonized Tariff Schedule of the

United States), 1624, 3314.

2. Section 181.53 is revised to read as

follows:

§ 181.53 Collection and waiver or

reduction of duty under duty-deferral

programs.

(a) General.

(1) Definitions. The following

definitions shall apply for purposes of

this section:

(i) Date of exportation. ‘‘Date of

exportation’’ means the date of

importation into Canada or Mexico as

reflected on the applicable Canadian or

Mexican entry document (see

§ 181.47(c) (1) and (2)).

(ii) Duty-deferral program. A ‘‘dutydeferral program’’ means any measure

which postpones duty payment upon

arrival of a good in the United States

until withdrawn or removed for

exportation to Canada or Mexico or for

entry into a Canadian or Mexican dutydeferral program. Such measures govern

manipulation warehouses,

manufacturing warehouses, smelting

and refining warehouses, foreign trade

zones, and those temporary

importations under bond that are

specified in paragraph (b)(5) of this

section.

(2) Treatment as entered or

withdrawn for consumption.

(i) General.

(A) Where a good is imported into the

United States pursuant to a dutydeferral program and is subsequently

withdrawn from the duty-deferral

program for exportation to Canada or

Mexico or is used as a material in the

production of another good that is

subsequently withdrawn from the dutydeferral program for exportation to

Canada or Mexico, and provided that

the good is a ‘‘good subject to NAFTA

drawback’’ within the meaning of 19

U.S.C. 3333 and is not described in

§ 181.45 of this part, the documentation

required to be filed under this section in

connection with the exportation of the

good shall, for purposes of this chapter,

constitute an entry or withdrawal for

consumption and the exported good

shall be subject to duty which shall be

assessed in accordance with paragraph

(b) of this section.

(B) Where a good is imported into the

United States pursuant to a dutydeferral program and is subsequently

withdrawn from the duty-deferral

program and entered into a dutydeferral program in Canada or Mexico or

is used as a material in the production

of another good that is subsequently

withdrawn from the duty-deferral

program and entered into a duty-
2912 Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Rules and Regulations

deferral program in Canada or Mexico,

and provided that the good is a ‘‘good

subject to NAFTA drawback’’ within the

meaning of 19 U.S.C. 3333 and is not

described in § 181.45, the

documentation required to be filed

under this section in connection with

the withdrawal of the good from the

U.S. duty-deferral program shall, for

purposes of this chapter, constitute an

entry or withdrawal for consumption

and the withdrawn good shall be subject

to duty which shall be assessed in

accordance with paragraph (b) of this

section.

(C) Any assessment of duty under this

section shall include the duties and fees

referred to in § 181.42 (a) through (c)

and the fees provided for in § 24.23 of

this chapter; these inclusions shall not

be subject to refund, waiver, reduction

or drawback.

(ii) Bond requirements. The

provisions of § 142.4 of this chapter

shall apply to each withdrawal and

exportation transaction described in

paragraph (a)(2)(i) of this section.

However, in applying the provisions of

§ 142.4 of this chapter in the context of

this section, any reference to release

from Customs custody in § 142.4 of this

chapter shall be taken to mean

exportation to Canada or Mexico.

(iii) Documentation filing and duty

payment procedures.

(A) Persons required to file. In the

circumstances described in paragraph

(a)(2)(i) of this section, the

documentation described in paragraph

(a)(2)(iii)(B) of this section must be filed

by one of the following persons:

(1) In the case of a withdrawal of the

goods from a warehouse, the person

who has the right to withdraw the

goods;

(2) In the case of a temporary

importation under bond (TIB) specified

in paragraph (b)(5) of this section, the

TIB importer whether or not he sells the

goods for export to Canada or Mexico

unless § 10.31(h) of this chapter applies;

or

(3) In the case of a withdrawal from

a foreign trade zone, the person who has

the right to make entry. However, if a

zone operator is not the person with the

right to make entry of the good, the zone

operator shall be responsible for the

payment of any duty due in the event

the zone operator permits such other

person to remove the goods from the

zone and such other person fails to

comply with §§ 146.67 and 146.68 of

this chapter.

(B) Documentation required to be

filed and required filing date. The

person required to file shall file

Customs Form 7501 no later than 10

working days after the date of

exportation to Canada or Mexico or 10

working days after being entered into a

duty-deferral program in Canada or

Mexico. Except where the context

otherwise requires and except as

otherwise specifically provided in this

paragraph, the procedures for

completing and filing Customs Form

7501 in connection with the entry of

merchandise under this chapter shall

apply for purposes of this paragraph.

For purposes of completing Customs

Form 7501 under this paragraph, any

reference on the form to the entry date

shall be taken to refer to the date of

exportation of the good or the date the

goods are entered into a duty-deferral

program in Canada or Mexico. The

Customs Form 7501 required under this

paragraph may be transmitted

electronically.

(C) Duty payment. The duty estimated

to be due under paragraph (b) of this

section shall be deposited with Customs

60 calendar days after the date of

exportation of the good. If a good is

entered into a duty-deferral program in

Canada or Mexico, the duty estimated to

be due under paragraph (b) of this

section, but without any waiver or

reduction provided for in that

paragraph, shall be deposited with

Customs 60 calendar days after the date

the good is entered into such dutydeferral program. Nothing shall

preclude the deposit of such estimated

duty at the time of filing the Customs

Form 7501 under paragraph (a)(2)(iii)(B)

of this section or at any other time

within the 60-day period prescribed in

this paragraph. However, any interest

calculation shall run from the date the

duties are required to be deposited.

(3) Waiver or reduction of duties.

(i) General. Except in the case of

duties and fees referred to in

§§ 181.42(a) through (c) and fees

provided for in § 24.23 of this chapter,

Customs shall waive or reduce the

duties paid or owed under paragraph

(a)(2) of this section by the person who

is required to file the Customs Form

7501 (see paragraph (a)(2)(iii)(A) of this

section) in accordance with paragraph

(b) of this section, provided that a claim

for waiver or reduction of the duties is

filed with Customs within the

appropriate 60-day time frame. The

claim shall be based on evidence of

exportation or entry into a Canadian or

Mexican duty-deferral program and

satisfactory evidence of duties paid in

Canada or Mexico (see § 181.47(c)).

(ii) Filing of claim and payment of

reduced duties. A claim for a waiver or

reduction of duties under paragraph

(a)(3)(i) of this section shall be made on

Customs Form 7501 which shall set

forth, in addition to the information

required under paragraph (a)(2)(iii)(B) of

this section, a description of the good

exported to Canada or Mexico and the

Canadian or Mexican import entry

number, date of importation, tariff

classification number, rate of duty and

amount of duty paid. If a claim for

reduction of duties is filed under this

paragraph, the reduced duties shall be

deposited with Customs when the claim

is filed.

(iii) Drawback on goods entered into

a duty-deferral program in Canada or

Mexico. After goods in a duty-deferral

program in the United States which

have been sent from the United States

and entered into a duty-deferral

program in Canada or Mexico are then

withdrawn from that Canadian or

Mexican duty-deferral program either

for entry into Canada or Mexico or for

export to a non-NAFTA country, the

person who filed the Customs Form

7501 (see paragraph (a)(2)(iii)(A) of this

section) may file a claim for drawback

if the goods are withdrawn within 5

years from the date of the original

importation of the good into the United

States. If the goods are entered for

consumption in Canada or Mexico,

drawback will be calculated in

accordance with § 181.44 of this part.

(4) Liquidation of entry.

(i) If no claim is filed. If no claim for

a waiver or reduction of duties is filed

in accordance with paragraph (a)(3) of

this section, Customs shall determine

the final duties due under paragraph

(a)(2)(i) of this section and shall post a

bulletin notice of liquidation of the

entry filed under this section in

accordance with § 159.9 of this chapter.

Where no claim was filed in accordance

with this section and Customs fails to

liquidate, or extend liquidation of, the

entry filed under this section within 1

year from the date of the entry, upon the

date of expiration of that 1-year period

the entry shall be deemed liquidated by

operation of law in the amount asserted

by the exporter on the Customs Form

7501 filed under paragraph (a)(2)(iii)(A)

of this section. A protest under section

514, Tariff Act of 1930, as amended (19

U.S.C. 1514), and part 174 of this

chapter shall be filed within 90 days

from the date of posting of the notice of

liquidation under this section.

(ii) If a claim is filed. If a claim for

a waiver or reduction of duties is filed

in accordance with paragraph (a)(3) of

this section, an extension of liquidation

of the entry filed under this section

shall take effect for a period not to

exceed 3 years from the date the entry

was filed. Before the close of the

extension period, Customs shall

liquidate the entry filed under this

section and shall post a bulletin notice
Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Rules and Regulations 2913

of liquidation in accordance with

§ 159.9 of this chapter. If Customs fails

to liquidate the entry filed under this

section within 4 years from the date of

the entry, upon the date of expiration of

that 4-year period the entry shall be

deemed liquidated by operation of law

in the amount asserted by the exporter

on the Customs Form 7501 filed under

paragraph (a)(3)(ii) of this section. A

protest under section 514, Tariff Act of

1930, as amended (19 U.S.C. 1514), and

part 174 of this chapter shall be filed

within 90 days from the date of posting

of the notice of liquidation under this

section.

(b) Assessment and waiver or

reduction of duty.

(1) Manipulation in warehouse.

Where a good subject to NAFTA

drawback under this subpart is

withdrawn from a bonded warehouse

(19 U.S.C. 1562) after manipulation for

exportation to Canada or Mexico or for

entry into a duty-deferral program in

Canada or Mexico, duty shall be

assessed on the good in its condition

and quantity, and at its weight, at the

time of such withdrawal from the

warehouse and with such additions to,

or deductions from, the final appraised

value as may be necessary by reason of

its change in condition. Such duty shall

be paid no later than 60 calendar days

after the date of exportation or of entry

into the duty-deferral program of

Canada or Mexico, except that, upon

filing of a proper claim under paragraph

(a)(3) of this section, the duty shall be

waived or reduced in an amount that

does not exceed the lesser of the total

amount of duty payable on the good

under this section or the total amount of

customs duties paid to Canada or

Mexico.

(2) Bonded manufacturing warehouse.

Where a good is manufactured in a

bonded warehouse (19 U.S.C. 1311)

with imported materials and is then

withdrawn for exportation to Canada or

Mexico or for entry into a duty-deferral

program in Canada or Mexico, duty

shall be assessed on the materials in

their condition and quantity, and at

their weight, at the time of their

importation into the United States. Such

duty shall be paid no later than 60

calendar days after either the date of

exportation or of entry into a dutydeferral program of Canada or Mexico,

except that, upon filing of a proper

claim under paragraph (a)(3) of this

section, the duty shall be waived or

reduced in an amount that does not

exceed the lesser of the total amount of

duty payable on the materials under this

section or the total amount of customs

duties paid to Canada or Mexico.

Example. Company N imports tea into the

United States and makes a Class 6 warehouse

entry. Company N manufactures sweetened

ice tea mix by combining the imported tea

with refined cane sugar and other flavorings

and packaging it in retail size canisters. Upon

withdrawal of the ice tea mix from the

warehouse for exportation to Canada, a

Customs Form 7501 is filed showing $900 in

estimated U.S. duties on the basis of the

unmanufactured tea. Upon entry into

Canada, the equivalent of US$800 is assessed

on the exported ice tea mix. Company N

submits to Customs a proper claim under

paragraph (a)(3) of this section showing

payment of the US$800 equivalent in duties

to Canada. Company N will only be required

to pay $100 in U.S. duties out of the $900

amount reflected on the Customs Form 7501.

(3) Bonded smelting or refining

warehouse. For any qualifying imported

metal-bearing materials (19 U.S.C.

1312), duty shall be assessed on the

imported materials and the charges

against the bond canceled no later than

60 calendar days after either the date of

exportation of the treated materials to

Canada or Mexico or the date of entry

of the treated materials into a dutydeferral program of Canada or Mexico,

either from the bonded smelting or

refining warehouse or from such other

customs bonded warehouse after the

transfer of the same quantity of material

from a bonded smelting or refining

warehouse. However, upon filing of a

proper claim under paragraph (a)(3) of

this section, the duty on the imported

materials shall be waived or reduced in

an amount that does not exceed the

lesser of the total amount of duty

payable on the imported materials

under this section or the total amount of

customs duties paid to Canada or

Mexico.

Example. Company Z imports 47 million

pounds of electrolytic zinc which is entered

into a bonded smelting and refining

warehouse (Class 7) for processing.

Thereafter, Company Z withdraws the

merchandise for exportation to Canada and

files a Customs Form 7501 showing $90,000

in estimated U.S. duty on the dutiable

quantity of metal contained in the imported

metal-bearing materials. Upon entry of the

processed zinc into Canada, the equivalent of

US$50,000 in duties are assessed. Within 60

days of exportation Company Z files a proper

claim under paragraph (a)(3) of this section

and Customs liquidates the entry with duty

due in the amount of $40,000.

(4) Foreign trade zone. For a good that

is manufactured or otherwise changed

in condition in a foreign trade zone (19

U.S.C. 81c(a)) and then withdrawn from

the zone for exportation to Canada or

Mexico or for entry into a Canadian or

Mexican duty-deferral program, the

duty assessed, as calculated under

paragraph (e)(1) or (e)(2) of this section,

shall be paid no later than 60 calendar

days after either the date of exportation

of the good to Canada or Mexico or the

date of entry of the good into a dutydeferral program of Canada or Mexico,

except that, upon filing of a proper

claim under paragraph (a)(3) of this

section, the duty shall be waived or

reduced in an amount that does not

exceed the lesser of the total amount of

duty payable on the good under this

section or the total amount of customs

duties paid to Canada or Mexico.

(i) Nonprivileged foreign status. In the

case of a nonprivileged foreign status

good, duty is assessed on the good in its

condition and quantity, and at its

weight, at the time of its exportation

from the zone to Canada or Mexico or

its entry into a duty-deferral program of

Canada or Mexico.

Example. CMG imports $1,000,000 worth

of auto parts from Korea and admits them

into Foreign-Trade Subzone number 00,

claiming nonprivileged foreign status. (If the

auto parts had been regularly entered they

would have been dutiable at 4 percent, or

$40,000.) CMG manufactures subcompact

automobiles. Automobiles are dutiable at 2.5

percent ($25,000) if entered for consumption

in the United States. CMG withdraws the

automobiles from the zone and exports them

to Mexico. Upon entry of the automobiles in

Mexico, CMG pays the equivalent of

US$20,000 in duty. Before the expiration of

60 calendar days from the date of

exportation, CMG files a proper claim under

paragraph (a)(3) of this section and pays

$5,000 in duty to Customs representing the

difference between the $25,000 which would

have been paid if the automobiles had been

entered for consumption from the zone and

the US$20,000 equivalent paid to Mexico.

(ii) Privileged foreign status. In the

case of a privileged foreign status good,

duty is assessed on the good in its

condition and quantity, and at its

weight, at the time privileged status is

granted in the zone.

Example. O&G, Inc. admits Kuwaiti crude

petroleum into its zone and requests, one

month later, privileged foreign status on the

crude before refining the crude into motor

gasoline and kerosene. Upon withdrawal of

the refined goods from the zone by O&G, Inc.

for exportation to Canada, a Customs Form

7501 is filed showing $700 in estimated

duties on the imported crude petroleum

(rather than on the refined goods which

would have been assessed $1,200). D&O is

the consignee in Canada and pays the

Canadian customs duty assessment of the

equivalent of US$1,500 on the goods. O&G,

Inc. is entitled to a waiver of the full $700

in duties upon filing of a proper claim under

paragraph (a)(3) of this section.

(5) Temporary importation under

bond. Except in the case of a good

imported from Canada or Mexico for

repair or alteration, where a good,

regardless of its origin, was imported

temporarily free of duty for repair,
2914 Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Rules and Regulations

alteration or processing (subheading

9813.00.05, Harmonized Tariff Schedule

of the United States) and is

subsequently exported to Canada or

Mexico, duty shall be assessed on the

good on the basis of its condition at the

time of its importation into the United

States. Such duty shall be paid no later

than 60 calendar days after either the

date of exportation or the date of entry

into a duty-deferral program of Canada

or Mexico, except that, upon filing of a

proper claim under paragraph (a)(3) of

this section, the duty shall be waived or

reduced in an amount that does not

exceed the lesser of the total amount of

duty payable on the good under this

section or the total amount of customs

duties paid to Canada or Mexico.

Example. Company A imports glassware

under subheading 9813.00.05, HTSUS. The

glassware is from France and would be

dutiable under a regular consumption entry

at $6,000. Company A alters the glassware by

etching hotel logos on the glassware. Two

weeks later, Company A sells the glassware

to Company B, a Mexican company, and

ships the glassware to Mexico. Company B

enters the glassware and is assessed duties in

an amount equivalent to US$6,200 and

claims NAFTA preferential tariff treatment.

Company B provides a copy of the Mexican

landing certificate to Company A showing

that the US$6,200 equivalent in duties was

assessed but not yet paid to Mexico. If

Mexico ultimately denies Company B’s

NAFTA claim and the Mexican duty

payment becomes final, Company A, upon

submission to Customs of a proper claim

under paragraph (a)(3) of this section, is

entitled to a waiver of the full $6,000 in U.S.

duty.

(c) Recordkeeping requirements. If a

person intends to claim a waiver or

reduction of duty on goods under this

section, that person shall maintain

records concerning the value of all

involved goods or materials at the time

of their importation into the United

States and concerning the value of the

goods at the time of their exportation to

Canada or Mexico or entry into a dutydeferral program of Canada or Mexico,

and if a person files a claim under this

section for a waiver or reduction of duty

on goods exported to Canada or Mexico

or entered into a Canadian or Mexican

duty-deferral program, that person shall

maintain evidence of exportation or

entry into a Canadian or Mexican dutydeferral program and satisfactory

evidence of the amount of any customs

duties paid to Canada or Mexico on the

good (see § 181.47(c)). Failure to

maintain adequate records will result in

denial of the claim for waiver or

reduction of duty.

(d) Failure to file proper claim. If the

person identified in paragraph

(a)(2)(iii)(A) of this section fails to file

a proper claim within the 60-day period

specified in this section, that person, or

the FTZ operator pursuant to paragraph

(a)(2)(iii)(A)(3) of this section, will be

liable for payment of the full duties

assessed under this section and without

any waiver or reduction thereof.

(e) Subsequent claims for preferential

tariff treatment. If a claim for a refund

of duties is allowed by the Canadian or

Mexican customs administration under

Article 502(3) of the NAFTA or under

any other circumstance after duties have

been waived or reduced under this

section, Customs may reliquidate the

entry filed under this section pursuant

to 19 U.S.C. 1508(b)(2)(B)(iii) even after

liquidation of the entry has become

final.

George J. Weise,

Commissioner of Customs.

Approved: January 24, 1996.

John P. Simpson,

Deputy Assistant Secretary of the Treasury.

[FR Doc. 96–1677 Filed 1–29–96; 8:45 am]

BILLING CODE 4820–02–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Food and Drug Administration

21 CFR Part 520

Oral Dosage Form New Animal Drugs;

Oxytetracycline Hydrochloride Soluble

Powder

AGENCY: Food and Drug Administration,

HHS.

ACTION: Final rule.

SUMMARY: The Food and Drug

Administration (FDA) is amending the

animal drug regulations to reflect

approval of an abbreviated new animal

drug application (ANADA) filed by

Phoenix Scientific, Inc. The ANADA

provides for the use of a generic

oxytetracycline hydrochloride soluble

powder administered orally in drinking

water for either control or control and

treatment of certain diseases of

chickens, turkeys, swine, cattle, and

sheep.

EFFECTIVE DATE: January 30, 1996.

FOR FURTHER INFORMATION CONTACT:

Melanie R. Berson, Center for Veterinary

Medicine (HFV–135), Food and Drug

Administration, 7500 Standish Pl.,

Rockville, MD 20855, 301–594–1643.

SUPPLEMENTARY INFORMATION: Phoenix

Scientific, Inc., 3915 South 48th St. Ter.,

P.O. Box 6457, St. Joseph, MO 64506–

0457, filed ANADA 200–146 which

provides for use of oxytetracycline

hydrochloride soluble powder in the

drinking water of chickens, turkeys,

swine, cattle, and sheep. The medicated

drinking water is used as follows: (1)

Chickens for control of infectious

synovitis caused by Mycoplasma

synoviae, chronic respiratory disease

and air sac infections caused by

Mycoplasma gallisepticum and

Escherichia coli, and fowl cholera

caused by Pasteurella multocida; (2)

turkeys for control of hexamitiasis

caused by Hexamita meleagridis,

infectious synovitis caused by M.

synoviae, and complicating bacterial

organisms associated with blue comb

(transmissible enteritis; coronaviral

enteritis); (3) swine for control and

treatment of bacterial enteritis caused by

E. coli and Salmonella choleraesuis and

bacterial pneumonia caused by P.

multocida; (4) breeding swine for

control and treatment of leptospirosis

(reducing the incidence of abortions and

shedding of leptospira) caused by

Leptospira pomona; (5) calves, beef

cattle, and nonlactating dairy cattle for

control and treatment of bacterial

enteritis caused by E. coli and bacterial

pneumonia (shipping fever complex)

caused by P. multocida; and (6) sheep

for control and treatment of bacterial

enteritis caused by E. coli and bacterial

pneumonia (shipping fever complex)

caused by P. multocida.

ANADA 200–146 for Phoenix

Scientific’s oxytetracycline

hydrochloride soluble powder is

approved as a generic copy of Pfizer’s

Terramycin Soluble Powder which is

covered by NADA 8–622. The ANADA

is approved as of December 7, 1995, and

the regulations in 21 CFR 520.1660d are

amended to reflect the approval. The

basis for approval is discussed in the

freedom of information summary.

In accordance with the freedom of

information provisions of part 20 (21

CFR part 20) and § 514.11(e)(2)(ii) (21

CFR 514.11(e)(2)(ii)), a summary of

safety and effectiveness data and

information submitted to support

approval of this application may be seen

in the Dockets Management Branch

(HFA–305), Food and Drug

Administration, rm. 1–23, 12420

Parklawn Dr., Rockville, MD 20857,

between 9 a.m. and 4 p.m., Monday

through Friday.

The agency has determined under 21

CFR 25.24(d)(1)(i) that this action is of

a type that does not individually or

cumulatively have a significant effect on

the human environment. Therefore,

neither an environmental assessment

nor an environmental impact statement

is required.

List of Subjects in 21 CFR Part 520

Animal drugs.