Import Administration
September 2001:   New FTZ Mailing Address  
last update: September 2002 
    
                           DEPARTMENT OF THE TREASURY 
                                Customs Service 
           AGENCY: U.S. Customs Service, Department of the Treasury. 
 
                            19 CFR Parts 18 and 146 
            Customs Regulations Amendments Relating to Textiles and 
            Textile Products; In-Bond Movements; Foreign-Trade Zones 
 
                                 [T.D. 84-207] 
 
                                  49 FR 38245 
 
                               September 28, 1984 
 
 
ACTION: Interim regulations, solicitation of comments, extension of comment 
period. 
 
 
SUMMARY: Section 204 of the Agricultural Act of 1956 grants authority to 
the President to negotiate agreements with foreign governments limiting 
exports of textiles and textile products from such countries into the U.S.
The Act also grants authority to issue regulations governing the entry into
the U.S. of articles covered by the agreements. Executive Order 12475 of 
May 9, 1984, delegated that authority to the Secretary of the Treasury and 
directed that the regulations be promulgated within 120 days of the May 11, 
1984, effective date of the Executive Order. On August 3, 1984, interim 
Customs Regulations were published in the Federal Register (49 FR 31248) 
as T.D. 84-171. The regulations amended the Customs Regulations to prevent
circumvention or frustration of visa or export license requirements 
contained in multilateral and bilateral agreements to which the U.S. is a 
party in order to facilitate the efficient an equitable administration of 
the U.S. Textile Import Program. Based upon public comments received in 
response to the solicitation of comments provision of the interim 
regulations, it has been decided to modify them to eliminate the 
requirement of presentation of the visa or export license before an 
in-bond movement is approved and include a listing of specific information
which will assist district directors in making their determination of 
whether or not to approve an in-bond movement or examine the merchandise. 
It has also been decided to modify the foreign-trade zones provisions of 
the interim regulations to include a phrase which recognizes the existing 
statutory authority of the Foreign-Trade Zones Board. 
 
 
DATES: Effective date: These interim regulations are effective for all 
textiles and textile products subject to section 204, Agricultural Act of 
1956, as amended, exported from the country of origin, as defined by @ 
12.130, Customs Regulations (19 CFR 12.130), on or after September 7, 
1984.  
 
   Comments: Written comments received on or before November 1, 1984, will
be considered in determining whether any further changes to the interim 
regulations are required before a final rule is published. Based upon 
numerous requests for additional time to comment on the interim 
regulations published in the Federal Register on August 3, 1984 (49 FR 
31248), as T.D. 84-171, it has been decided to extend the close of the 
comment period for that document from October 2, 1984, to November 1, 1984.

ADDRESS: Written comments may be submitted to and inspected at the 
Regulations Control Branch, U.S. Customs Service Headquarters, Room 2426, 
1301 Constitution Avenue, NW., Washington, D.C. 20229. 

FOR FURTHER INFORMATION CONTACT: 
 
 
Part 18: Kent Parsell, Inspection and Control Division (202-566-5354);  
 
 
Part 146: John Holl, Office of Cargo Enforcement Facilitation 
(202-566-8151);  
 
 
U.S. Customs Service, 1301 Constitution Avenue, NW., Washington, D.C. 20229.  
 
TEXT: SUPPLEMENTARY INFORMATION 
 
 
Background 
 
   In order to implement import policies with respect to textiles and textile 
products, Congress provided authority to the President to negotiate textile 
restraint agreements in section 204 of the Agricultural Act of 1956, as 
amended (7 U.S.C. 1854), and authority to carry out such agreements by 
issuing regulations governing the entry of merchandise covered by the 
agreements into the U.S.  

   In December, 1973, representatives of 50 nations meeting under the 
General Agreement on Tariff and Trade (GATT) aegis, negotiated the 
Multi-Fiber Arrangement Regarding International Trade in Textiles. The 
arrangement is usually known as the Multi-Fiber Arrangement, or MFA, and 
came in force on January 1, 1974. It was subsequently renewed and next 
expires on July 31, 1986.   

   Under the MFA, the U.S. has negotiated bilateral restraint agreements 
with 28 countries. The U.S. also has bilateral agreements with 8 MFA 
non-signatories. The Committee for the Implementation of Textile Agreements
(CITA) was established by Executive Order 11651 on March 3, 1972, to 
supervise the implementation of textile agreements. 
 
   In recent months the U.S. Customs Service has been faced with an ever 
increasing number and variety of instances where attempts have been made 
to circumvent the Textile Import Program. Many of these attempts to 
circumvent the Textile Import Program have involved the use of the in-bond
movement procedures set forth in Part 18, Customs Regulations (19 CFR Part
18).   

   In part, because of these problems, to prevent circumvention or 
frustration of the various multilateral and bilateral agreements to which
the U.S. is a party, and to facilitate efficient and equitable 
administration of the U.S. Textile Import Program, the President signed 
Executive Order 12475 on May 9, 1984. Under the Executive Order the 
Secretary of the Treasury was required to promulgate regulations governing
the entry of textiles and textile products subject to section 204 of the 
Agricultural Act of 1956 within 120 days of the May 11, 1984, effective 
date of the Executive Order. On August 3, 1984, a document was published 
as T.D. 84-171 in the Federal Register (49 FR 31248), which promulgated 
interim Customs Regulations amendments pursuant to the Executive Order. 
The document invited public comments on the interim regulations until 
October 2, 1984. That comment period is now being extended by this document
to November 1, 1984. During the comment period, Customs has been and will 
continue to review comments as they are received to determine if any 
problem arises which requires immediate action. 
 
   Accordingly, in order to alleviate unnecessary hardships to persons 
(individuals, partnerships, or corporations) in the U.S. who had made 
binding commitments for a fixed quantity of merchandise prior to 
publication of the interim regulations, the effective date as it relates 
to the provisions of @ 12.130 was modified, by a document published in the 
Federal Register on August 29, 1984 (49 FR 34199) as T.D. 84-190, subject 
to the terms and conditions as set forth in the document, to October 31, 
1984. 
 
   Another area which has been looked at closely by Customs has been the 
in-bond procedures set forth in @ 18.11 of the interim regulations. In the 
August 3, 1984, Federal Register document it was indicated that because of 
the numerous instances identified by Customs in which the provisions of 
the regulations relating to in-bond transportations have been used to 
frustrate and circumvent the textile and textile products visa or export 
license requirements, district directors have been advised to strictly 
enforce the provisions of @ 18.11(h), Customs Regulations (19 CFR 18.11(h)).
To insure the applicability of these requirements, @ 18.11(e) was amended 
by the interim regulations to incorporate the provisions of @ 18.11(h). 
In addition, @ 18.11(e) was amended to require the visa or export license, 
if applicable, to be presented with the entry. Section 6.18, Customs 
Regulations (19 CFR 6.18), relating to documentation for transit air 
cargo, was amended to cross-reference the requirements of @ 18.11 (e) and 
(h).  

   Customs has received numerous comments in response to the solicitation 
of comments provision of the interim regulations regarding the presentation
of the visa or export license prior to movement of textiles and textile 
products under the in-bond procedures. Based upon a review of these 
comments, it has been concluded that compliance with the requirement 
would be difficult. Accordingly, Customs has decided to delete this 
requirement.  

   Further, the commenters expressed concern about the example of the rated
invoice used in the interim regulations to indicate the type of evidence 
the district director could use to satisfy himself of the approximate 
correctness of the value and quantity stated in the in-bond entry. The 
rated invoice was chosen as an example not because of a need for this 
particular document but because it contained most of the information 
necessary for Customs to accurately assess the risk of possible diversion 
during the in-bond movement. Because the example has generated so much 
adverse comment and concern, it has been decided to delete it and 
specifically list, by way of example, the information which Customs will 
use in making the determination of whether or not to examine the 
merchandise and whether or not to approve the in-bond movement. This 
information includes:  
 
   (a) Detailed quantity description (e.g., 14 cartons, 2 dozen per 
carton),   

   (b) Detailed description of the textiles or textile products 
including type of commodity and chief fiber content (e.g., men's cotton 
jeans or women's wool sweaters),  

   (c) Net weight of the textiles or textile products (including immediate
packing but excluding pallets), 
 
   (d) Total value of the textiles or textile products, 
 
   (e) Manufacturer or supplier, 
 
   (f) Country of origin, 
 
   (g) Name(s) and address(es) of the person(s) to whom the textiles 
and textile products are consigned, and 
 
   (h) Harmonized code tariff number (when available). 
 
   The harmonized code tariff number, if provided, will greatly assist 
Customs in determining the proper classification of the merchandise and 
the visa requirements. Not providing any one or all of the foregoing will 
not in and of itself result in a denial of the in-bond movement or 
examination of the merchandise. It will, however, be a factor considered 
by the district director along with all other facts and circumstances 
available as to the risk to the revenue, potential for diversion of the 
merchandise, and proper enforcement of the Textile Import Program. 
 
   The information may be provided to Customs by the carrier or his agent 
or the importer. If this information is available on existing documentation 
such as an invoice, a bill of lading, etc., providing a copy of that 
document, will assist Customs in the consideration of whether or not to 
approve the movement or to examine the merchandise. In lieu of the 
foregoing, the information could be included on the in-bond document itself 
or a plain piece of paper. This flexible approach will allow the importer 
to determine the manner in which the information will be supplied. 
 
   Further, Customs has also decided that to effectively enforce these 
interim regulations and ensure that shipments of textiles or textile 
products arrive intact, no diversion from the destination, as shown on 
the in-bond document, will be allowed without the permission of the 
district director at the port of origin of the in-bond movement. This 
requirement provides Customs with the administrative control over shipments
of textiles and textile products necessary to effectively ensure that those 
products subject to quota are not diverted into the commerce of the U.S. 
in violation of such quota. While the privilege of in-bond movement 
provided under 19 U.S.C. 1552 is statutorily denied for prohibited 
merchandise, textiles or textile products imported in excess of quota are 
not deemed to be prohibited until they arrive at the port at which entry 
is to be filed. As a result, such textile shipments, which will become 
prohibited merchandise at the port where the entry is filed, are, in fact,
allowed to transit through the U.S. where they may be diverted into the 
commerce of the U.S. Although, historically, the bonding mechanism 
protected the government from such diversion, because the bond protected 
against a loss of revenue, with respect to quota merchandise the bond 
provides an inadequate remedy under the law. This is because the quota 
agreements are not concerned with revenue but, rather, with prohibiting 
introduction of those textiles and textile products into the commerce of 
the U.S. This new requirement is designed to ensure that the diversion of 
such merchandise does not occur. This change is set forth as an amendment 
to @ 18.5, Customs Regulations (19 CFR 18.5) and is included in this 
document.  

   The interim regulations published on August 3, 1984, also contained an
amendment to the foreign-trade zones regulations found in Part 146, Customs
Regulations (19 CFR Part 146), to prevent use of foreign-trade zones to 
frustrate or circumvent quota or visa or export license requirements. The 
provision set forth in @ 146.49 specifically provided that textiles and 
textile products admitted into a foreign-trade zone, regardless of whether
the merchandise has privileged or nonprivileged foreign status, which 
would have been subject to quota or visa or export license requirements in 
their condition at the time of importation if entered for consumption 
rather than admitted to a foreign-trade zone, may not be subsequently 
transferred into the customs territory for consumption if during the time 
the merchandise is in the foreign-trade zone there has been a change by 
manipulation, manufacture, or other means: 
 
   (a) in the country of origin of the merchandise as defined by @ 12.130 
of the interim regulations, 
 
   (b) to exempt from quota or visa or export license requirements other 
than a change brought about by statute, treaty, executive order or 
Presidential proclamation, or  

   (c) from one textile category to another textile category.  
 
   Based upon public comment and after consultation with the Foreign-Trade 
Zones Board, it has been decided to modify the foreign-trade zones 
provisions of the interim regulations to include a phrase which recognizes 
the existing statutory authority of the Foreign-Trade Zones Board. The 
change is set forth as an amendment to @ 146.49 of the interim regulations.
 
 
Comments 
 
   Before adopting these interim regulations as a final rule, consideration
will be given to any written comments timely submitted to the Commissioner
of Customs. Comments submitted will be available for public inspection in 
accordance with the Freedom of Information Act (5 U.S.C. 552), and @ 1.6 
Treasury Department Regulations (31 CFR 1.6), and @ 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, U.S. Customs
Service Headquarters, Room 2426, 1301 Constitution Avenue, NW., Washington,
D.C. 20229.  
 
 
Inapplicability of Notice 
 
   Public notice is inapplicable to these regulations because they are 
promulgated pursuant to section 204 of the Agricultural Act of 1956, as 
amended (7 U.S.C. 1854), and are thus within the foreign affairs function
of the U.S. and the foreign affairs exemption of 5 U.S.C. 553(a)(1). These
regulations are necessary to prevent circumvention or frustration of 
multilateral and bilateral agreements to which the U.S. is a party and to
facilitate efficient and equitable administration of the U.S. Textile 
Import Program as authorized in section 204. For the above reasons it is 
also believed that pursuant to 5 U.S.C. 553(b)(B), notice and public 
procedures are impracticable, unnecessary and contrary to the public 
interest. The authority to promulgate these regulations was delegated by 
the President to the Secretary of the Treasury by Executive Order 12475. 
 
 
Executive Order 12291 
 
   This interim regulation is not a "major rule" as defined by section 
1(b) of Executive Order 12291. Accordingly, a regulatory impact analysis 
is not required under E.O. 12291.  
 
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 document because it is believed the regulation will not
have a significant economic impact on a substantial number of small 
entities. However, public comment is requested on the effects, with 
numerical estimates, of the amendments on costs, profitability, 
competitiveness, and employment in small entities. Subsequent to the 
receipt of public comments, it will be decided whether the preparation of 
a final regulatory flexibility analysis is warranted. In light of the 
above, it is certified under the provisions of section 3, Regulatory 
Flexibility Act (5 U.S.C. 605(b)) that the interim regulations will not 
have a significant economic impact on a substantial number of small 
entities.  
 
 
Paperwork Reduction Act 
 
   The interim regulation is subject to the Paperwork Reduction Act of 
1980, Pub. L. 96-511. Accordingly, applicable sections of the interim 
regulation have been cleared by the Office of Management and Budget and 
assigned control number 1515-0140.  
 
Drafting Information 
 
   The principal author of this document was John Elkins, 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 
 
 
19 CFR Part 18 
 
   Common carriers, Customs duties and inspection, Freight forwarders, 
Imports.  
 
 
19 CFR Part 146 
 
   Customs duties and inspections, Foreign-trade zones, Imports.  
 
 
Amendments to the Regulations 
 
   Parts 18 and 146, Customs Regulations (19 CFR Parts 18, 146), are 
amended as set forth below. 
 
 
William von Raab, 
 
   Commissioner of Customs. 
 
   Approved: September 7, 1984. 
 
 
John M. Walker, Jr., 
 
   Assistant Secretary of the Treasury. 
 
   PART 18 -- TRANSPORTATION IN-BOND AND MERCHANDISE IN-TRANSIT  
 
   1. Section 18.5(a) is amended by removing the words "and (e)" in the 
second sentence and inserting, in their place, the words "(e) and (f)".  
 
   2. Section 18.5 is further amended by adding a paragraph (f) to read as 
follows:  

   @ 18.5 Diversion. 
 
 
* * * * * 
 
   (f) The diversion of in-bond shipments, which contain textiles or 
textile products subject to section 204, Agricultural Act of 1956, as 
amended (7 U.S.C. 1854), during the in-bond movement shall be allowed only 
upon the prior written permission of the district director at the port of 
origin.   

   3. Section 18.11(e) is amended by removing the last three sentences, as 
added by T.D. 84-171, and inserting, in their place, the following:  
 
   @ 18.11 Entry, classes of goods for which entry is authorized; form used.
 
 
* * * * * 
 
   (e) * * * 
 
   Entries for immediate transportation without appraisement covering 
textiles and textile products subject to section 204, Agricultural Act of 
1956, as amended (7 U.S.C. 1854), shall be described in such detail as to 
enable the district director to estimate the duties and taxes, if any, 
due. The district director may require evidence to satisfy him of the 
approximate correctness of the value and quantity stated in the entry 
(e.g. Detailed quantity description (e.g., 14 cartons, 2 dozen per 
carton); Detailed description of the textiles or textile products including 
type of commodity and chief fiber content (e.g., men's cotton jeans or 
women's wool sweaters); Net weight of the textiles or textile products 
(including immediate packing but excluding pallet); Total value of the 
textiles or textile products; Manufacturer or supplier; Country of orgin; 
Name(s) and address(es) of the person(s) to whom the textiles and textile 
products are consigned; Harmonized code tariff number (when available)).  
 
 
(R.S. 251, as amended, sec. 484, 46 Stat. 722, as amended, sec. 624, 46 
Stat. 759, sec. 204, 70 Stat. 200, as amended (19 U.S.C. 66, 1484, 1624, 
7 U.S.C. 1854)) 
 
   PART 146 -- FOREIGN TRADE ZONES 
 
   @ 146.49 [Amended] 
 
   Section 146.49, as added by T.D. 84-171, is amended by removing the word
"Textiles" and inserting, in its place, the words "Subject to the existing 
statutory authority of the Foreign-Trade Zones Board, textiles".  
 
 
(R.S. 251, as amended, sec. 8, 48 Stat. 1000, sec. 484, 46 Stat. 722, as 
amended, sec. 624, 46 Stat. 759, sec. 204, 70 Stat. 200, as amended 
(19 U.S.C. 66, 81h, 1484, 1624, 7 U.S.C. 1854))  
[FR Doc. 84-25956 Filed 9-27-84; 8:45 am] 
 
   BILLING CODE 4820-02-M