Import Administration
September 2001:   New FTZ Mailing Address  
last update: September 2002 
                           DEPARTMENT OF THE TREASURY 
                                Customs Service 
                       AGENCY: Customs Service, Treasury. 
                                19 CFR Part 146 
             Admission Into Foreign-Trade Zone of Merchandise From 
                            Customs Bonded Warehouse 
                                  47 FR 20627 
                                  May 13, 1982 
ACTION: Proposed rule. 
SUMMARY: This document proposes to amend the Customs Regulations to allow 
imported merchandise withdrawn from a Customs bonded warehouse to be 
admitted into a foreign-trade zone without restriction for use in 
manufacturing operations. At present, that merchandise is restricted and 
must be exported from the United States, destroyed, or merely stored in a 
foreign-trade zone.  
   The proposed amendment would remove a restriction on commerce and allow 
greater utilization of foreign-trade zones by increasing manufacturing 
operations in the zones. 
DATE: Comments must be received on or before July 12, 1982.  
ADDRESS: Comments (preferably in triplicate) should be addressed to the 
Commissioner of Customs, Attention: Regulations Control Branch, U.S. 
Customs Service, 1301 Constitution Avenue, NW., Room 2426, Washington, 
D.C. 20229. 

Russell A. Berger, Carriers, 
Drawback and Bonds Division, 
U.S. Customs Service, 
1301 Constitution Avenue, NW., 
Washington, D.C. 20229 (202-566-5856).  
   Foreign-trade zones ("zones") are established under the Foreign-Trade 
Zones Act of 1934, as amended (FTZA) (19 U.S.C. 81a-81u) and the general 
regulations and rules of procedure of the Foreign-Trade Zones Board 
contained in 15 CFR Part 400. Part 146, Customs Reguations (19 CFR Part 
146), governs the admission of merchandise into a zone; manipulation, 
manufacture, or exhibition of merchandise in a zone; exportation of 
merchandise from a zone; and transfer of merchandise from a zone into the 
customs territory of the United States ("customs territory"). 
   Foreign or domestic merchandise may be admitted into a zone for, among 
other things, manipulation, manufacture, assembly, or other processing, or 
for storage or exhibition, provided these operations are not otherwise 
prohibited by law. Normal customs entry procedures and payment of duty 
are not required for merchandise located in a zone unless and until the 
merchandise is removed from a zone and entered into the customs territory.
   As presently written, @ 146.25(d), Customs Regulations, specifies that
merchandise entered for warehousing under section 557(a), Tariff Act of 
1930, as amended (19 U.S.C. 1557(a)), and thereafter transferred to a zone 
shall have the status of "zone-restricted merchandise". This means that 
the merchandise may be taken into the zone only for the purpose of 
exportation, storage, or destruction. Consequently, such merchandise may 
not be used in the zone in manufacturing operations. Customs believes 
that @ 146.25(d) is unduly restrictive basically because the underlying 
statutory authority, 19 U.S.C. 1557(a), does not make specific provision 
for the transfer of warehoused merchandise to a zone. 
   In 1938, when 19 U.S.C. 1557(a) was amended to provide that warehoused
merchandise might be withdrawn "for transportation and rewarehousing at 
another port or elsewhere," there were only one or two zones in existence 
pursuant to the authority of the FTZA. Under these circumstances, it appears 
that the Congress did not specifically consider the transfer of warehoused 
merchandise to a zone when it amended 19 U.S.C. 1557(a). Hence, while the 
Congress did not specifically include zones in 19 U.S.C. 1557(a), neither 
did it intend to exclude them from that section. 
   Customs believes that the meaning of 19 U.S.C. 1557(a) is open to 
reasonable interpretation. The lack of a specific provision for zones in 
19 U.S.C. 1557(a) should not be construed to restrict any otherwise 
permissible use of the merchandise while in the zone. In this regard, 
manufacturing operations have been permitted in zones since amendment of 
the FTZA in 1950.  
   Under present @ 146.25(d), as noted above, merchandise withdrawn from a
warehouse and transferred to a zone may not be used in manufacturing. 
However, merchandise placed directly in a zone may be so used. Customs 
believes this unequal treatment unnecessarily restricts commerce and 
results in decreased utilization of manufacturing capabilities in zones. 
   Therefore, in light of current commercial realities -- the existence of 
over 60 zones, a number of which are engaged in extensive manufacturing 
operations -- Customs has determined that @ 146.25(d) should be amended 
as indicated below to remove the zone-restricted status of foreign 
merchandise withdrawn from a bonded warehouse and transferred to a zone. 
   If this proposed amendment is adopted, it is anticipated that 
merchandise to be admitted with nonprivileged or privileged foreign status 
would be withdrawn from a bonded warehouse under an entry for immediate 
transportation ("I.T. entry") and transported in-bond to a zone. Upon 
admission to the zone, the original warehouse entry would be liquidated, 
and the documentation from the I.T. entry would be attached to the 
required zone documentation to provide sufficient information for Customs 
and other purposes. Present procedures applicable to merchandise admitted 
with zone-restricted status would not be changed. 
   Likewise, adoption of the proposal would modify all prior Headquarters 
decisions, whether published or unpublished, including Customs Service 
Decisions (C.S.D.) 79-204 and 81-88, to the extent that they are 
inconsistent with the proposal. C.S.D. 79-204 and 81-88 held that 
merchandise in a Customs bonded warehouse may be withdrawn from that 
warehouse and admitted into a zone only with zone-restricted status. 
   Before adopting this proposal, consideration will be given to any 
written comments submitted to the Commissioner of Customs. Comments 
submitted will be available for public inspection in accordance with @ 
103.11(b), Customs Regulations (19 CFR 103.11(b)), on normal business days 
between the hours of 9:00 a.m. to 4:30 p.m. at the Regulations Control 
Branch, Room 2426, Headquarters, U.S. Customs Service, 1301 Constitution 
Avenue, NW., Washington, D.C. 20229. 
Executive Order 12291 
   The proposed regulation is not a major regulation as defined in section 
1(b) of E.O. 12291. Accordingly, a regulatory impact analysis is not 
Regulatory Flexibility Act 
   The provisions of the Regulatory Flexibility Act relating to an initial 
and final regulatory flexibility analysis (5 U.S.C. 603, 604) are not 
applicable to this proposal because the rule, if promulgated, will not have 
a significant economic impact on a substantial number of small entities. 
Customs Office of Economic Analysis has concluded that, contrary to having 
any adverse economic impact on small entities, the proposal would 
facilitate commerce and have an overall bneficial economic impact. The 
proposal is not expected to have a significant secondary or incidental 
effect on a substantial number of small entities; impose, or otherwise 
cause, a significant increase in the reporting, recordkeeping, or other 
compliance burdens on a substantial number of small entities; or generate 
significant interest or attention from entities through comments, either 
formal or informal. 
   Accordingly, the Secretary of the Treasury hereby certifies under the 
provisions of section 3 of the Regulatory Flexibility Act (5 U.S.C. 
605(b)) that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. 
Drafting Information 
   The principal author of this document was Todd J. Schneider, 
Regulations Control Branch, Office of Regulations and Rulings, U.S. 
Customs Service. However, personnel from other Customs offices 
participated in its development.  
List of Subjects in 19 CFR Part 146 
   Customs duties and inspection, Foreign trade zones, Imports, Exports. 

   This document is issued under authority of R.S. 251, as amended, section 
3, 48 Stat. 999, as amended, section 8, 48 Stat. 1000, section 624, 46 
Stat. 759 (19 U.S.C. 66, 81c, 81h, 1624). 
Proposed Amendment 
   It is proposed to amend Part 146, Customs Regulations (19 CFR Part 146), 
as set forth below: 
   It is proposed to amend @ 146.25 by revising paragraph (d) to read as 
    @ 146.25 Zones-restricted merchandise. 
* * * * * 
   (d) Merchandise entered for warehousing transferred to a zone.  
Merchandise entered for warehousing and transferred to a zone, other than 
temporarily for manipulation and return to customs territory as provided 
for in section 146.13, may be admitted to a zone in zone-restricted, 
nonprivileged foreign, or privileged foreign status. The warehouse entry 
shall be liquidated when the merchandise is admitted into the zone. 
William von Raab, 
   Commissioner of Customs. 
   Approved: April 16, 1982. 
John M. Walker, Jr., 
   Assistant Secretary of the Treasury.  
[FR Doc. 82-13077 Filed 5-12-82; 8:45 am] 
   BILLING CODE 4820-02-M