CCLME.ORG - 19 CFR PART 10ЧARTICLES CONDITIONALLY FREE SUBJECT TO A REDUCED RATE ETC.

(continued)

(b) An appropriate BATF permit shall be filed with Customs in connection with the withdrawal of ethyl alcohol from Customs custody by the United States or any governmental agency thereof for its own use for nonbeverage purposes. Such permit shall be filed before release under the entry without the deposit of estimated duties, if any, and internal revenue tax, or before release in accordance with the provisions of з141.102(d) of this chapter. (See subpart M of part 251, Bureau of Alcohol, Tobacco and Firearms Regulations (27 CFR part 251, subpart M)).

(c) The procedures for the withdrawal free of tax on the entry of ethyl alcohol for nonbeverage purposes from the Virgin Islands are found in subpart O of part 250, Bureau of Alcohol, Tobacco and Firearms Regulations (27 CFR part 250, subpart O).

[T.D. 89Ц65, 54 FR 28413, July 6, 1989]

United States Government Importations
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з 10.100 Entry, examination, and tariff status.
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Except as otherwise provided for in зз10.101, 10.102, 10.104, 141.83(d)(8), 141.102(d), or elsewhere in this chapter, importations made by or for the account of any agency or office of the United States Government are subject to the usual Customs entry and examination requirements. In the absence of express exemptions from duty, such as are contained in subheadings 9808.00.10, 9808.00.20, 9808.00.30, 9808.00.40, 9808.00.50, 9808.00.60, 9808.00.70, or other subheadings in the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202) providing for free entry, such importations are also subject to duty.

[T.D. 77Ц23, 42 FR 2310, Jan. 11, 1977, as amended by T.D. 89Ц1, 53 FR 51251, Dec. 21, 1988; T.D. 97Ц82, 62 FR 51769, Oct. 3, 1997]

з 10.101 Immediate delivery.
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(a) Shipments entitled to immediate delivery. Shipments consigned to or for the account of any agency or office of the United States Government, or to an officer or official of any such agency in his official capacity, shall be regarded for purposes of these regulations as shipments the immediate delivery of which is necessary within the purview of section 448(b), Tariff Act of 1930, as amended (19 U.S.C. 1448(b)).

(b) Immediate delivery applications. The shipments described in the preceding paragraph may be released upon the filing of immediate delivery applications on Customs Form 3461 as set forth in subpart A of part 142 of this chapter. Such applications may be limited to particular shipments or may cover all shipments imported by the Government agency making the application. They may be approved for specific periods of time or for indefinite periods of time, provided in either case they are supported by carrier's certificates and stipulations as provided for in paragraph (c) of this section.

(c) Carrier's certificates and stipulations. Before the release of a shipment under an immediate delivery permit, evidence of the right of the applicant to make entry for the articles shall be furnished the port director in accordance with the provisions of зз141.11 and 141.12 of this chapter.

(d) Bond. No bond shall be required in support of an immediate delivery application provided for in this section if a stipulation in the form as set forth below is filed with the port director in connection with the application:

I, ____, ____ (Title) ____________________________________ , a duly authorized representative of the ____________________

(Name of United States Government department or agency) stipulate and agree on behalf of such department or agency that all applicable provisions of the Tariff Act of 1930, as amended, and the regulations thereunder, and all other laws and regulations, relating to the release and entry of merchandise will be observed and complied with in all respects.

(Signature) ________________________________

(e) Timely entries required. If proper entries for consumption for importations released under these regulations are not filed within a reasonable time, appropriate steps shall be taken to insure the prompt filing of such entries.

[T.D. 77Ц23, 42 FR 2310, Jan. 11, 1977, as amended by T.D. 87Ц75, 52 FR 20067, May 29, 1987]

з 10.102 Duty-free entries.
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(a) Invoice or declaration. No invoice or other declaration of the shipper shall be required for shipments expressly exempt from duty as provided in subheadings 9808.00.10, 9808.00.20, 9808.00.30, 9808.00.40, 9808.00.50, 9808.00.60, 9808.00.70, or other subheadings in the Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. 1202) providing for free entry. However, the importing Government agency or office shall present any invoice, memorandum invoice, or bill pertaining to the merchandise in its possession or available to it, or, if no such invoice or bill is available, a pro forma invoice prepared in accordance with з141.85 of this chapter, setting forth adequate information for examination and determination of the dutiable status of the merchandise. In addition, the port director shall only admit articles free of duty under subheadings 9808.00.30, 9808.00.40, 9808.00.50, HTSUS (19 U.S.C. 1202), upon the receipt of a certificate executed in the manner and form described in paragraph (b) of this section.

(b) Certification. One of the following certificates executed by a duly authorized officer or official of the appropriate Government agency or office is required for free entry of articles under subheadings 9808.00.30, 9808.00.40, or 9808.00.50, HTSUS (19 U.S.C. 1202). The certificates may be printed, stamped, or typewritten on the Customs entry or withdrawal form, Customs Form 7501, or on a separate paper attached to the entry or withdrawal form filed by the Government agency or office, provided the certification is clearly and unmistakably identified with the articles covered by the entry or withdrawal.

(1) Articles for military departments, subheading 9808.00.30, HTSUS. I certify that the procurement of this material constituted an emergency purchase of war material abroad by the Department of the (name of military department), and it is accordingly requested that such material be admitted free of duty pursuant to subheading 9808.00.30, HTSUS.

____________________
(Name) ____________________

(Title) ____________________________________ , who has been designated to execute free-entry certificates for the above-named department.

____________________
(Grade or Rank) (Organization)

(2) Articles for the Defense Logistics Agency, subheading 9808.00.40, HTSUS. Pursuant to subheading 9808.00.40, HTSUS, I hereby certify that the above-described materials are strategic and critical materials procured under the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98e).

____________________
(Name) ____________________

(Title) ____________________________________ , Defense Logistics Agency, who has been duly authorized to execute the above certificate.

(3) Articles for the Department of Energy, subheading 9808.00.50, HTSUS. I certify to the Secretary of the Treasury that the above-described materials are source materials purchased abroad, the admittance of which is necessary in the interest of the common defense and security, in accordance with subheading 9808.00.50, HTSUS.

____________________
(Name) ____________________

(Title) ____________________________________ , who has been authorized to execute free-entry certificates for the Department of Energy.

(c) Release of shipments. Shipments for which free entry has been or will be claimed under subheading 9808.00.30, 9808.00.40, 9808.00.50, HTSUS (19 U.S.C. 1202), shall be released after only such examination as is necessary to identify them.

(d) Entry in Government name. All materials for which free entry is claimed under subheading 9808.00.30, 9808.00.40, 9808.00.50, HTSUS (19 U.S.C. 1202), shall be entered, or withdrawn from warehouse, for consumption in the name of the Government department whose representative executes the certificate set forth in з10.102(b) unless exemption from this requirement is specifically authorized by the port director.

[T.D. 77Ц23, 42 FR 2311, Jan. 11, 1977, as amended by T.D. 85Ц123, 50 FR 29953, July 23, 1985; T.D. 89Ц1, 53 FR 51251, Dec. 21, 1988; T.D. 93Ц44, 58 FR 34523, June 28, 1993; T.D 95Ц81, 60 FR 52295, Oct. 6, 1995]

з 10.103 American goods returned.
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(a) Certificate required. Articles entered, or withdrawn from warehouse, for consumption in the name of an agency or office of the United States Government (with the exception of military scrap belonging to the Department of Defense) may be admitted free of duty under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. 1202), upon the filing of a certificate on the letterhead of the agency or office in the following form in lieu of other entry documentation:

I hereby certify:

1. That the following articles imported in the ____________ (Name of Carrier) at the port of ____________ (Port) on ______ (Date) consist of returned products which are the growth, produce, or manufacture of the United States, and have been returned to the United States without having been advanced in value or improved in condition by any process of manufacture or other means, and that no drawback has been or will be claimed on such articles, and that the articles currently belonging to and are for the further use of ____________ (Agency or Office)

------------------------------------------------------------------------
General description of
Number of containers Bill of lading No.\1\ articles
------------------------------------------------------------------------

------------------------------------------------------------------------
\1\ If shipment arrives in the United States on a commercial carrier.

2. That the shipment does not contain military scrap.

3. That the shipment is entitled to entry under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS) free of duty.

4. That I am a military installation transportation officer having knowledge of the facts involved in this certificate.

or
I am an officer or official authorized by ________ (Agency or Office) (Whichever is applicable) to execute this certificate.

____________________
(Name) ____________________

(Rank and branch of service or Agency or Office)

(b) Combined certificate when articles are intermingled. When articles claimed to be free under subheading 9801.00.10 and other articles claimed to be free under subheadings 9808.00.30, 9808.00.40, 9808.00.50, HTSUS (19 U.S.C. 1202), are intermingled in a single shipment in a manner which precludes separation for the purpose of making claims for free entry under the separate categories, all the articles may be covered by a combined certificate which follows the requirements of з10.102(b) and paragraph (a) of this section.

(c) Execution of certificate. The certificate required by paragraph (a) of this section may be executed by any military installation transportation officer having knowledge of the facts or by any other officer or official specifically designated or authorized to execute such certificates by the importing Government agency or office. If the merchandise arrived on a commercial carrier, the entry shall be supported by evidence of the right to make it.

[T.D. 77Ц23, 42 FR 2311, Jan. 11, 1977, as amended by T.D. 89Ц1, 53 FR 51251, Dec. 21, 1988]

з 10.104 Temporary importation entries for United States Government agencies.
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The entry of articles brought into the United States temporarily by an agency or office of the United States Government and claimed to be exempt from duty under Chapter 98, Subchapter XIII, Heading 9813, Harmonized Tariff Schedule of the United States (HTSUS), shall be made on Customs Form 7501. No bond shall be required if the agency or office files a stipulation in the form set forth in з141.102(d) of this chapter. In those cases in which the provisions of Chapter 98, Subchapter XIII, HTSUS (19 U.S.C. 1202), are not met, however, the port director will proceed as if a bond had been filed to cover the particular importation. Articles temporarily imported by a Government agency or office under this section are entitled to immediate delivery under the procedures set forth in з10.101.

[T.D. 77Ц23, 42 FR 2311, Jan. 11, 1977, as amended by T.D. 89Ц1, 53 FR 51251, Dec. 21, 1988]

Wheat
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з 10.106 [Reserved]
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Rescue and Relief Work
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з 10.107 Equipment and supplies; admission.
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(a) There shall be admitted without entry and without the payment of duty or any tax imposed upon or by reason of importation of any article described in section 322(b), Tariff Act of 1930, as amended, subject to compliance with the following conditions:

(1) Before importation or as soon thereafter as possible, and in every case before the expiration of 10 days after importation, a report shall be made to the nearest Customs officer by the person in charge of sending the article from the foreign country, or by the person for whose account it was brought into the United States, stating the character, quantity, destination, and use to be made of the article.

(2) If practicable, the article shall be exported under Customs supervision. In any other case a report shall be made by the person in charge of the exportation as soon as possible after exportation to the Customs officer to whom the arrival was reported, stating the character, quantity, and circumstances of the exportation.

(b) In the case of each article admitted under paragraph (a) of this section, the port director shall satisfy himself as to whether the article was exported within a reasonable time, or that it has been properly expended or destroyed. If an article is so far destroyed, in connection with a use contemplated for it by section 322 (b) that it has only a salvage value, it shall not be required to be exported.

(c) Any article admitted under paragraph (a) of this section which is used in the United States otherwise than for a purpose contemplated for it by section 322(b), or which is not exported within 90 days after its arrival in the United States, or within such longer time as may be specially authorized by the port director or Headquarters, U.S. Customs Service, shall be seized and forfeited to the United States.

[28 FR 14663, Dec. 31, 1963, as amended by T.D. 89Ц1, 53 FR 51252, Dec. 21, 1988]

Products Exported Under Lease and Reimported
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з 10.108 Entry of reimported articles exported under lease.
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Free entry shall be accorded under subheading 9801.00.20, Harmonized Tariff Schedule of the United States (HTSUS), whenever it is established to the satisfaction of the port director that the article for which free entry is claimed was duty paid on a previous importation or was previously entered free of duty pursuant to the Caribbean Basin Economic Recovery Act or Title V of the Trade Act of 1974, is being reimported without having been advanced in value or improved in condition by any process of manufacture or other means, was exported from the United States under a lease or similar use agreement, and is being reimported by or for the account of the person who imported it into, and exported it from, the United States.

[T.D. 94Ц40, 59 FR 17474, Apr. 13, 1994]

Strategic Materials Obtained by Barter or Exchange
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з 10.110 [Reserved]
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Late Filing of Free Entry and Reduced Duty Documents
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з 10.112 Filing free entry documents or reduced duty documents after entry.
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Whenever a free entry or a reduced duty document, form, or statement required to be filed in connection with the entry is not filed at the time of the entry or within the period for which a bond was filed for its production, but failure to file it was not due to willful negligence or fraudulent intent, such document, form, or statement may be filed at any time prior to liquidation of the entry or, if the entry was liquidated, before the liquidation becomes final. See з113.43(c) of this chapter for satisfaction of the bond and cancellation of the bond charge.

[T.D. 74Ц227, 39 FR 32015, Sept. 4, 1974]

Instruments and Apparatus for Educational and Scientific Institutions
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з 10.114 General provisions.
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The consolidated regulations of the Commerce and Treasury Departments relating to the entry of instruments and apparatus for educational and scientific institutions are contained in 15 CFR part 301.

[T.D. 82Ц224, 47 FR 53727, Nov. 29, 1982]

зз 10.115-10.119 [Reserved]
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Visual or Auditory Materials
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з 10.121 Visual or auditory materials of an educational, scientific, or cultural character.
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(a) Where photographic film and other articles described in subheading 9817.00.40, Harmonized Tariff Schedule of the United States (HTSUS), are claimed to be free of duty under subheading 9817.00.40, HTSUS, there shall be filed in connection with the entry covering such articles a document issued by the U.S. Information Agency certifying that it has determined that the articles are visual or auditory materials of an educational, scientific, or cultural character within the meaning of the Agreement for Facilitating the International Circulation of Visual and Auditory Materials of an Educational, Scientific, and Cultural Character as required by U.S. Note 1, Subchapter XVII, chapter 98, HTSUS.

(b) Articles entered under subheading 9817.00.40, Harmonized Tariff Schedule of the United States (HTSUS), shall be released from Customs custody prior to submission of the document required in paragraph (a) of this section only upon the deposit of estimated duties with the port director. Liquidation of an entry covering merchandise which has been released under this procedure shall be suspended for a period of 90 days from the date of entry or until the required document is submitted, whichever occurs first. In the event that the director of the port of entry does not receive the required document within the 90-day period, the merchandise shall be immediately classified and liquidated in the ordinary course, without regard to subheading 9817.00.40, HTSUS.

[T.D. 67Ц185, 32 FR 11641, Aug. 11, 1967, as amended by T.D. 89Ц1, 53 FR 51252, Dec. 21, 1988; T.D. 90Ц78, 55 FR 40166, Oct. 2, 1990]

Rate of Duty Dependent Upon Actual Use
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з 10.131 Circumstances in which applicable.
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The provisions of зз10.131 through 10.139 are applicable in those circumstances in which the rate of duty applicable to merchandise is dependent upon actual use, unless there is a specific provision in this part which governs the treatment of the merchandise. However, specific marking or certification requirements, such as those for bolting cloths in section 10.58, may be applicable to merchandise subject to the provisions of sections 10.131Ц10.139.

[T.D. 71Ц139, 36 FR 10726, June 2, 1971, as amended by T.D. 86Ц118, 51 FR 22515, June 20, 1986]

з 10.132 [Reserved]
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з 10.133 Conditions required to be met.
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When the tariff classification of any article is controlled by its actual use in the United States, three conditions must be met in order to qualify for free entry or a lower rate of duty unless the language of the particular subheading of the Harmonized Tariff Schedule of the United States applicable to the merchandise specifies other conditions. The conditions are that:

(a) Such use is intended at the time of importation.

(b) The article is so used.

(c) Proof of use is furnished within 3 years after the date the article is entered or withdrawn from warehouse for consumption.

[T.D. 71Ц139, 36 FR 10726, June 2, 1971, as amended by T.D. 89Ц1, 53 FR 51252, Dec. 21, 1988]

з 10.134 Declaration of intent.
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A showing of intent by the importer as to the actual use of imported merchandise shall be made by filing with the entry for consumption or for warehouse a declaration as to the intended use of the merchandise, or by entering the proper subheading of an actual use provision of the Harmonized Tariff Schedule of the United States (HTSUS) and the reduced or free rate of duty on the entry form. Entry made under an actual use provision of the HTSUS may be construed as a declaration that the merchandise is entered to be used for the purpose stated in the HTSUS, provided the port director is satisfied the merchandise will be so used. However, the port director shall require a written declaration to be filed if he is not satisfied that merchandise entered under an actual use provision will be used for the purposes stated in the HTSUS.

[T.D. 71Ц139, 36 FR 10726, June 2, 1971, as amended by T.D. 89Ц1, 53 FR 51252, Dec. 21, 1988]

з 10.135 Deposit of duties.
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When the requirement of з10.134 has been met the merchandise may be entered or withdrawn from warehouse for consumption without deposit of duty when proof of use will result in free entry, or with deposit of duty at the lower rate when proof of use will result in a lower rate of duty.

[T.D. 71Ц139, 36 FR 10726, June 2, 1971, as amended by T.D. 84Ц213, 49 FR 41166, Oct. 19, 1984]

з 10.136 Suspension of liquidation.
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Liquidation of an entry covering merchandise for which a declaration of intent has been made pursuant to з10.134 and any required deposit of duties made, shall be suspended until proof of use is furnished or the 3-year period allowed for production thereof has expired.

[T.D. 71Ц139, 36 FR 10726, June 2, 1971]

з 10.137 Records of use.
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(a) Maintenance by importer. The importer shall maintain accurate and detailed records showing the use or other disposition of the imported merchandise. The burden shall be on the importer to keep records so that the claim of actual use can be readily established.

(b) Retention of records. The importer shall retain records of use or disposition for a period of 3 years from the date of liquidation of the entry.

(c) Examination of records. The rec- ords required to be kept by paragraph (a) of this section shall be available at all times for examination and inspection by an authorized Customs officer.

[T.D. 71Ц139, 36 FR 10726, June 2, 1971]

з 10.138 Proof of use.
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Within 3 years from the date of entry or withdrawal from warehouse for consumption, the importer shall submit in duplicate in support of his claim for free entry or for a reduced rate of duty a certificate executed by (1) the superintendent or manager of the manufacturing plant, or (2) the individual end-user or other person having knowledge of the actual use of the imported article. The certificate shall include a description of the processing in sufficient detail to show that the use contemplated by the law has actually taken place. A blanket certificate covering all purchases of a given type of merchandise from a particular importer during a given period, or all such purchases with specified exceptions, may be accepted for this purpose, provided the importer shall furnish a statement showing in detail, in such manner as to be readily identified with each entry, the merchandise which he sold to such manufacturer or end-user during such period.

[T.D. 71Ц139, 36 FR 10727, June 2, 1971]

з 10.139 Liquidation.
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(a) In general. Upon satisfactory proof of timely use of the merchandise for the purpose specified by law, the entry shall be liquidated free of duty or at the lower rate of duty specified by law. When such proof is not filed within 3 years from the date of entry or withdrawal from warehouse for consumption, the entry shall be liquidated dutiable under the appropriate subheading of the Harmonized Tariff Schedule of the United States.

(b) Exception for blackstrap molasses. An entry covering blackstrap molasses, as hereinafter defined, may be accepted and liquidated with duty at the lower rate after the filing of the declaration of intent required by з10.134 and the deposit of estimated duties required by з10.135 without compliance with зз10.136, 10.137, and 10.138. Blackstrap molasses is УfinalФ molasses practically free from sugar crystals, containing not over 58 percent total sugars and having a ratio of

total sugars ╫ 100/Brix

not in excess of 71. In the event of doubt, an ash determination may be made. An ash content of not less than 7 percent indicates a blackstrap molasses within the meaning of this paragraph.

[T.D. 71Ц139, 36 FR 10727, June 2, 1971, as amended by T.D. 89Ц1, 53 FR 51252, Dec. 21, 1988]

Importations Not Over $200 and Bona Fide Gifts
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з 10.151 Importations not over $200.
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Subject to the conditions in з10.153 of this part, the port director shall pass free of duty and tax any shipment of merchandise, as defined in з101.1 of this chapter, imported by one person on one day having a fair retail value, as evidenced by an oral declaration or the bill of lading (or other document filed as the entry) or manifest listing each bill of lading, in the country of shipment not exceeding $200, unless he has reason to believe that the shipment is one of several lots covered by a single order or contract and that it was sent separately for the express purpose of securing free entry therefor or of avoiding compliance with any pertinent law or regulation. Merchandise subject to this exemption shall be entered under the informal entry procedures (see subpart C, part 143, and зз128.24, 145.31, 148.12, and 148.62, of this chapter).

[T.D. 94Ц51, 59 FR 30293, June 13, 1994, as amended by T.D. 95Ц31, 60 FR 18990, Apr. 14, 1995; T.D. 95Ц31, 60 FR 37875, July 24, 1995; T.D. 97Ц82, 62 FR 51769, Oct. 3, 1997]

з 10.152 Bona-fide gifts.
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Subject to the conditions in з10.153 of this part, the port director shall pass free of duty and tax any article sent as a bona-fide gift from a person in a foreign country to a person in the United States, provided that the aggregate fair retail value in the country of shipment of such articles received by one person on one day does not exceed $100 or, in the case of articles sent from a person in the Virgin Islands, Guam, and American Samoa, $200. Articles subject to this exemption shall be entered under the informal entry procedures (see subpart C, part 143, and зз145.32, 148.12, 148.51, and 148.64, of this chapter). An article is УsentФ for purposes of this section if it is conveyed in any manner other than on the person or in the accompanied or unaccompanied baggage of the donor or donee.

[T.D. 94Ц51, 59 FR 30293, June 13, 1994]

з 10.153 Conditions for exemption.
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Customs officers shall be further guided as follows in determining whether an article or parcel shall be exempted from duty and tax under з10.151 or з10.152:

(a) A Уbona fide giftФ for purposes of з10.152 is an article formerly owned by a donor (may be a commercial firm) who gave it outright in its entirety to a donee without compensation or promise of compensation. It does not include articles acquired by purchase, barter, promissory exchange, or similar transaction, nor does it include articles said to be УgivenФ in conjunction with a purchase, barter, promissory exchange, or similar transaction, such as a so-called bonus article.

(b) A parcel addressed to a person in the United States from an individual in a foreign country which contains a gift should be clearly marked on the outside to indicate that it contains a gift. Such marking is not conclusive evidence of a gift nor is the absence of such marking conclusive evidence that an article is not a gift. Ordinarily an article not exceeding $100 in fair retail value in the country of shipment sent from a person in a foreign country to a person in the United States ($200, in the case of an article sent from a person in the Virgin Islands, Guam, and American Samoa) will be recognizable as a gift from the nature of the article and obvious facts surrounding the shipment.

(c) A parcel addressed to a person in the United States from a business firm in a foreign country would ordinarily not contain a gift from a donor in the foreign country. When such a parcel in fact contains an article entitled to free entry under з10.152, the parcel should be clearly marked to indicate that it contains such a gift and a statement to this effect should be enclosed in the parcel.

(d) Consolidated shipments addressed to one consignee shall be treated for purposes of зз10.151 and 10.152 as one importation. The foregoing shall not apply to shipments of bona fide gifts consolidated abroad for shipment to the United States when:

(1) The consolidation for shipment to the United States is in a cargo van or similar containerization which is consigned to a common carrier, freight forwarder, freight handler, or other public service agency for distribution of the gift packages;

(2) The separate gifts not exceeding $100 in fair retail value in the country of shipment ($200, in the case of articles sent from persons in the Virgin Islands, Guam, and American Samoa) included in the consolidated shipment are before shipment individually wrapped and addressed to the donee in the United States;

(3) Each gift package is marked on the outside to indicate that it contains a gift not exceeding $100 in fair retail value in the country of shipment ($200, in the case of packages sent from persons in the Virgin Islands, Guam, and American Samoa); and

(4) Each gift package is separately listed in the name of the addressee-donee on a packing list, manifest, bill of lading, or other shipping document.

(e) No alcoholic beverage, perfume containing alcohol (except where the aggregate fair retail value in the country of shipment of all merchandise contained in the shipment does not exceed $5), cigars, or cigarettes shall be exempted from the payment of duty and tax under з10.151 or з10.152.

(f) The exemptions provided for in з10.151 or з10.152 are not to be allowed in respect of any shipment containing one or more gifts having an aggregate fair retail value in the country of shipment in excess of $100 ($200, in the case of articles sent from persons in the Virgin Islands, Guam, and American Samoa), except as indicated in paragraph (d) of this section. For example, an article ordinarily subject to an ad valorem rate of duty but sent as a gift, if the fair retail value exceeds the $100 (or $200) exemption, would be subject to a duty based upon its value under the provisions of section 402 or 402(a), Tariff Act of 1930, as amended (19 U.S.C. 1401a or 1402), even though the dutiable value is less than the $100 (or $200) exemption.

(g) The exemption referred to in з10.151 is not to be allowed in the case of any merchandise of a class or kind provided for in any absolute or tariff-rate quota, whether the quota is open or closed. In the case of merchandise of a class or kind provided for in a tariff-rate quota, the merchandise is subject to the rate of duty in effect on the date of entry.

[T.D. 73Ц175, 38 FR 17445, July 2, 1973, as amended by T.D. 75Ц185, 40 FR 31753, July 29, 1975; T.D. 78Ц394, 43 FR 49787, Oct. 25, 1978; T.D. 85Ц123, 50 FR 29953, July 23, 1985; T.D. 94Ц51, 59 FR 30293, June 13, 1994]

Generalized System of Preferences
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з 10.171 General.
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(a) Statutory authority. Title V of the Trade Act of 1974 as amended (19 U.S.C. 2461Ц2467) authorizes the President to establish a Generalized System of Preferences (GSP) to provide duty-free treatment for eligible articles imported directly from designated beneficiary developing countries. Beneficiary developing countries and articles eligible for duty-free treatment are designated by the President by Executive order in accordance with sections 502(a)(1) and 503(a) of the Trade Act of 1974 as amended (19 U.S.C. 2462(a)(1), 2463(a)).

(b) Country defined. For purposes of зз10.171 through 10.178, except as otherwise provided in з10.176(a), the term УcountryФ means any foreign country, any overseas dependent territory or possession of a foreign country, or the Trust Territory of the Pacific Islands. In the case of an association of countries which is a free trade area or customs union or which is contributing to comprehensive regional economic integration among its members through appropriate means, including but not limited to, the reduction of duties, the President may by Executive order provide that all members of such association other than members which are barred from designation under section 502(b) of the Trade Act of 1974 (19 U.S.C. 2462(b)) shall be treated as one country for purposes of зз10.171 through 10.178.

[T.D. 76Ц2, 40 FR 60047, Dec. 31, 1975, as amended by T.D. 80Ц271, 45 FR 75641, Nov. 17, 1980; T.D. 00Ц67, 65 FR 59675, Oct. 5, 2000]

з 10.172 Claim for exemption from duty under the Generalized System of Preferences.
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A claim for an exemption from duty on the ground that the Generalized System of Preferences applies shall be allowed by the port director only if he is satisfied that the requirements set forth in this section and зз10.173 through 10.178 have been met. If duty-free treatment is claimed at the time of entry, a written claim shall be filed on the entry document by placing the symbol УAФ as a prefix to the subheading of the Harmonized Tariff Schedule of the United States for each article for which such treatment is claimed.

[T.D. 76Ц2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 77Ц36, 42 FR 5041, Jan. 27, 1977; T.D. 89Ц1, 53 FR 51252, Dec. 21, 1988; T.D. 94Ц47, 59 FR 25569, May 17, 1994; T.D. 99Ц27, 64 FR 13675, Mar. 22, 1999]

з 10.173 Evidence of country of origin.
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(a) Shipments covered by a formal entryЧ(1) Merchandise not wholly the growth, product, or manufacture of a beneficiary developing country. (i) Declaration. In a case involving merchandise covered by a formal entry which is not wholly the growth, product, or manufacture of a single beneficiary developing country, the exporter of the merchandise or other appropriate party having knowledge of the relevant facts shall be prepared to submit directly to the port director, upon request, a declaration setting forth all pertinent detailed information concerning the production or manufacture of the merchandise. When requested by the port director, the declaration shall be prepared in substantially the following form:

GSP DECLARATION

I,____________________

(name), hereby declare that the articles described below were produced or manufactured in ________ (country) by means of processing operations performed in that country as set forth below and were also subjected to processing operations in the other country or countries which are members of the same association of countries as set forth below and incorporate materials produced in the country named above or in any other country or countries which are members of the same association of countries as set forth below:

----------------------------------------------------------------------------------------------------------------
Processing operations performed Materials produced in a
on articles beneficiary developing country
--------------------------------- or members of the same
association
Description of -------------------------------
Number and date of invoices articles and Description of Description of
quantity processing Direct costs material,
operations and of processing production Cost or value
country of operations process, and of material
processing country of
production
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............... ............... .............. .............. ..............
............... ............... .............. .............. ..............
............... ............... .............. .............. ..............
............... ............... .............. .............. ..............
----------------------------------------------------------------------------------------------------------------

Date____________________
Address____________________
Signature____________________
Title____________________

(ii) Retention of records and submission of declaration. The information necessary for preparation of the declaration shall be retained in the files of the party responsible for its preparation and submission for a period of 5 years. In the event that the port director requests submission of the declaration during the 5-year period, it shall be submitted by the appropriate party directly to the port director within 60 days of the date of the request or such additional period as the port director may allow for good cause shown. Failure to submit the declaration in a timely fashion will result in a denial of duty-free treatment.

(2) Merchandise wholly the growth, product, or manufacture of a beneficiary developing country. In a case involving merchandise covered by a formal entry which is wholly the growth, product, or manufacture of a single beneficiary developing country, a statement to that effect shall be included on the commercial invoice provided to Customs.

(b) Shipments covered by an informal entry. Although the filing of the declaration provided for in paragraph (a)(1)(i) of this section will not be required for a shipment covered by an informal entry, the port director may require such other evidence of country of origin as deemed necessary.

(c) Verification of documentation. Any evidence of country of origin submitted under this section shall be subject to such verification as the port director deems necessary. In the event that the port director is prevented from obtaining the necessary verification, the port director may treat the entry as dutiable.

[T.D. 94Ц47, 59 FR 25569, May 17, 1994]

з 10.174 Evidence of direct shipment.
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(a) Documents constituting evidence of direct shipment. The port director may require that appropriate shipping papers, invoices, or other documents be submitted within 60 days of the date of entry as evidence that the articles were Уimported directlyФ, as that term is defined in з10.175. Any evidence of direct shipment required by the port director shall be subject to such verification as he deems necessary.

(b) Waiver of evidence of direct shipment. The port director may waive the submission of evidence of direct shipment when he is otherwise satisfied, taking into consideration the kind and value of the merchandise, that the merchandise clearly qualifies for treatment under the Generalized System of Preferences.

[T.D. 76Ц2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 77Ц27, 42 FR 3162, Jan. 17, 1977]

з 10.175 Imported directly defined.
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Eligible articles shall be imported directly from a beneficiary developing country to qualify for treatment under the Generalized System of Preferences. For purposes of зз10.171 through 10.178 the words Уimported directlyФ mean:

(a) Direct shipment from the beneficiary country to the United States without passing through the territory of any other country; or

(b) If the shipment is from a beneficiary developing country to the U.S. through the territory of any other country, the merchandise in the shipment does not enter into the commerce of any other country while en route to the U.S., and the invoice, bills of lading, and other shipping documents show the U.S. as the final destination; or

(c) If shipped from the beneficiary developing country to the United States through a free trade zone in a beneficiary developing country, the merchandise shall not enter into the commerce of the country maintaining the free trade zone, and

(1) The eligible articles must not undergo any operation other than:

(i) Sorting, grading, or testing,

(ii) Packing, unpacking, changes of packing, decanting or repacking into other containers,

(iii) Affixing marks, labels, or other like distinguishing signs on articles or their packing, if incidental to operations allowed under this section, or

(iv) Operations necessary to ensure the preservation of merchandise in its condition as introduced into the free trade zone.

(2) Merchandise may be purchased and resold, other than at retail, for export within the free trade zone.

(3) For the purposes of this section, a free trade zone is a predetermined area or region declared and secured by or under governmental authority, where certain operations may be performed with respect to articles, without such articles having entered into the commerce of the country maintaining the free trade zone; or

(d) If the shipment is from any beneficiary developing country to the U.S through the territory of any other country and the invoices and other documents do not show the U.S as the final destination, the articles in the shipment upon arrival in the U.S. are imported directly only if they:

(1) Remained under the control of the customs authority of the intermediate country;

(2) Did not enter into the commerce of the intermediate country except for the purpose of sale other than at retail, and the port director is satisfied that the importation results from the original commercial transaction between the importer and the producer or the latter's sales agent; and

(3) Were not subjected to operations other than loading and unloading, and other activities necessary to preserve the articles in good condition; or

(e)(1) Shipment to the U.S. from a beneficiary developing country which is a member of an association of countries treated as one country under section 507(2), Trade Act of 1974, as amended (19 U.S.C. 2467(2)), through the territory of a former beneficiary developing country whose designation as a member of the same association for GSP purposes was terminated by the President pursuant to section 502(d), Trade Act of 1974, as amended (19 U.S.C. 2462(d)), provided the articles in the shipment did not enter into the commerce of the former beneficiary developing country except for purposes of performing one or more of the operations specified in paragraph (c)(1) of this section and except for purposes of purchase or resale, other than at retail, for export.

(2) The designation of the following countries as members of an association of countries for GSP purposes has been terminated by the President pursuant to section 502(d) of the Trade Act of 1974 (19 U.S.C. 2462(d)):

The Bahamas

Brunei Darussalam

Malaysia

Singapore

[T.D. 76Ц2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 83Ц144, 48 FR 29684, June 28, 1983; T.D. 84Ц237, 49 FR 47992, Dec. 7, 1984; T.D. 86Ц107, 51 FR 20816, June 9, 1986; T.D. 92Ц6, 57 FR 2018, Jan. 17, 1992; T.D. 94Ц47, 59 FR 25569, May 17, 1994; T.D. 95Ц30, 60 FR 18543, Apr. 12, 1995; T.D. 00Ц67, 65 FR 59675, Oct. 5, 2000]

з 10.176 Country of origin criteria.
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(a) Merchandise produced in a beneficiary developing country or any two or more countries which are members of the same association of countriesЧ(1) General. Except as otherwise provided in this section, any article which either is wholly the growth, product, or manufacture of, or is a new or different article of commerce that has been grown, produced, or manufactured in, a beneficiary developing country may qualify for duty-free entry under the Generalized System of Preferences (GSP). No article will be considered to have been grown, produced, or manufactured in a beneficiary developing country by virtue of having merely undergone simple (as opposed to complex or meaningful) combining or packaging operations or mere dilution with water or mere dilution with another substance that does not materially alter the characteristics of the article. Duty-free entry under the GSP may be accorded to an article only if the sum of the cost or value of the materials produced in the beneficiary developing country or any two or more countries that are members of the same association of countries and are treated as one country under section 507(2) of the Trade Act of 1974, as amended (19 U.S.C. 2467(2)), plus the direct costs of processing operations performed in the beneficiary developing country or member countries, is not less than 35 percent of the appraised value of the article at the time it is entered.

(2) Combining, packaging, and diluting operations. No article which has undergone only a simple combining or packaging operation or a mere dilution in a beneficiary developing country within the meaning of paragraph (a)(1) of this section will be entitled to duty-free treatment even though the processing operation causes the article to meet the value requirement set forth in that paragraph. For purposes of this section:

(i) Simple combining or packaging operations and mere dilution include, but are not limited to, the following:

(A) The addition of batteries to devices;

(B) Fitting together a small number of components by bolting, glueing, soldering, etc.;

(C) Blending foreign and beneficiary developing country tobacco;

(D) The addition of substances such as anticaking agents, preservatives, wetting agents, etc.;

(E) Repacking or packaging components together;

(F) Reconstituting orange juice by adding water to orange juice concentrate; and

(G) Diluting chemicals with inert ingredients to bring them to standard degrees of strength;

(ii) Simple combining or packaging operations and mere dilution will not be taken to include processes such as the following:

(A) The assembly of a large number of discrete components onto a printed circuit board;

(B) The mixing together of two bulk medicinal substances followed by the packaging of the mixed product into individual doses for retail sale;

(C) The addition of water or another substance to a chemical compound under pressure which results in a reaction creating a new chemical compound; and

(D) A simple combining or packaging operation or mere dilution coupled with any other type of processing such as testing or fabrication (for example, a simple assembly of a small number of components, one of which was fabricated in the beneficiary developing country where the assembly took place); and

(iii) The fact that an article has undergone more than a simple combining or packaging operation or mere dilution is not necessarily dispositive of the question of whether that processing constitutes a substantial transformation for purposes of determining the country of origin of the article.

(b) [Reserved]

(c) Merchandise grown, produced, or manufactured in a beneficiary developing country. Merchandise which is wholly the growth, product, or manufacture of a beneficiary developing country, or an association of countries treated as one country under section 507(2) of the Trade Act of 1974 (19 U.S.C. 2467(2)) and з10.171(b), and manufactured products consisting of materials produced only in such country or countries, shall normally be presumed to meet the requirements set forth in this section.

[T.D. 76Ц2, 40 FR 60048, Dec. 31, 1975, as amended by T.D. 80Ц271, 45 FR 75641, Nov. 17, 1980; T.D. 00Ц67, 65 FR 59675, Oct. 5, 2000]

з 10.177 Cost or value of materials produced in the beneficiary developing country.
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(a) УProduced in the beneficiary developing countryФ defined. For purposes of зз10.171 through 10.178, the words Уproduced in the beneficiary developing countryФ refer to the constituent materials of which the eligible article is composed which are either:

(1) Wholly the growth, product, or manufacture of the beneficiary developing country; or

(2) Substantially transformed in the beneficiary developing country into a new and different article of commerce.

(b) Questionable origin. When the origin of an article either is not ascertainable or not satisfactorily demonstrated to the port director, the article shall not be considered to have been produced in the beneficiary developing country.

(c) Determination of cost or value of materials produced in the beneficiary developing country. (1) The cost or value of materials produced in the beneficiary developing country includes:

(i) The manufacturer's actual cost for the materials;

(ii) When not included in the manufacturer's actual cost for the materials, the freight, insurance, packing, and all other costs incurred in transporting the materials to the manufacturer's plant;

(iii) The actual cost of waste or spoilage (material list), less the value of recoverable scrap; and

(iv) Taxes and/or duties imposed on the materials by the beneficiary developing country, or an association of countries treated as one country, provided they are not remitted upon exportation.

(2) Where the material is provided to the manufacturer without charge, or at less than fair market value, its cost or value shall be determined by computing the sum of:

(i) All expenses incurred in the growth, production, manufacture or assembly of the material, including general expenses;

(ii) An amount for profit; and

(iii) Freight, insurance, packing, and all other costs incurred in transporting the materials to the manufacturer's plant.

If the pertinent information needed to compute the cost or value of the materials is not available, the appraising officer may ascertain or estimate the value thereof using all reasonable ways and means at his disposal. (continued)