PART 146—FOREIGN TRADE ZONES Authority: 19 U.S.C. 66, 81a-81u, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States), 1623, 1624. Source: T.D. 86-16, 51 FR 5049, Feb. 11, 1986, unless otherwise noted. § 146.0 Scope. Foreign trade zones are established under the Foreign Trade Zones Act and the general regulations and rules of procedure of the Foreign Trade Zones Board contained in 15 CFR part 400. This part 146 of the Customs Regulations governs the admission of merchandise into a foreign trade zone, manipulation, manufacture, or exhibition in a zone; exportation of the merchandise from a zone; and transfer of merchandise from a zone into Customs territory. Subpart A—General Provisions § 146.1 Definitions. (a) The following words, defined in section 1 of the Foreign-Trade Zones Act of 1934, as amended (19 U.S.C. 81a), are given the same meaning when used in this part, unless otherwise stated: “Board”, “Grantee”, and “Zones”. (b) The following are general definitions for the purpose of this part: Act. Activation. Admit. Alteration. Conditionally admissible merchandise. Constructive transfer. Customs territory. Deactivation. Default. Domestic merchandise. Foreign merchandise. Fungible merchandise. Merchandise. Operator. Port Director. Prohibited merchandise. Reactivation. Subzone. Transfer. Unique identifier. User. Zone lot. Zone site. Zone status. i.e. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 89-1, 53 FR 51263, Dec. 21, 1988; T.D. 99-27, 64 FR 13674, Mar. 22, 1999] § 146.2 Port director as Board representative. The appropriate port director shall be in charge of the zone as the representative of the Board. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 99-27, 64 FR 13676, Mar. 22, 1999] § 146.3 Customs supervision. (a) Assignment of Customs officers. (b) Supervision. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 98-22, 63 FR 11826, Mar. 11, 1998] § 146.4 Operator responsibility and supervision. (a) Supervision. (b) Customs access. (c) Safekeeping of merchandise and records. (d) Records maintenance. (e) Merchandise security. (f) Storage and handling. (g) Guard service. (h) Miscellaneous responsibilities. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 94-81, 59 FR 51496, Oct. 12, 1994; T.D. 95-77, 60 FR 50020, Sept. 27, 1995; T.D. 99-27, 64 FR 13676, Mar. 22, 1999] § 146.5 [Reserved] § 146.6 Procedure for activation. (a) Application. (b) Supporting documents. (1) [Reserved] (2) A blueprint of the area approved by the Board to be activated showing area measurements, including all openings and buildings; and all outlets, inlets, and pipelines to any tank for the storage of liquid or similar product, that portion of the blueprint certified to be correct by the operator of the tank; (3) A gauge table, when appropriate, showing the capacity, in the appropriate unit, of any tank, certified to be correct by the operator of the tank; (4) A procedures manual describing the inventory control and recordkeeping system that will be used in the zone, certified by the operator or grantee to meet the requirements of subpart B; and (5) The written concurrence of the grantee, when the operator applies for activation, in the requested zone activation. (c) Inquiry by port director. (1) The qualifications, character, and experience of an operator and/or grantee and their principal officers; and (2) The security, suitability, and fitness of the facility to receive merchandise in a zone status. (d) Decision of the port director. (e) Activation. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 93-18, 58 FR 15773, Mar. 24, 1993; T.D. 95-99, 60 FR 62733, Dec. 7, 1995; T.D. 99-27, 64 FR 13676, Mar. 22, 1999; T.D. 01-14, 66 FR 8767, Feb. 2, 2001] § 146.7 Zone changes. (a) Alteration of an activated area. (b) Deactivation or reactivation. (c) Suspension of activated site. (d) New bond. (e) New operator. (f) The bond in § 146.6 shall be submitted by the operator before the operating agreement may become effective in respect to merchandise in zone status. The port director shall promptly notify the grantee, in writing, of the approval or disapproval of the application. (g) List of officers, employees, and other persons. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 95-99, 60 FR 62733, Dec. 7, 1995] § 146.8 Seals, authority of operator to break and affix. The port director may authorize an operator to break a Customs in-bond seal affixed under § 18.4 of this chapter, or under any Customs order or directive, on any vehicle or intermodal container containing merchandise approved for admission to the zone upon its arrival at the zone; or to affix a Customs in-bond seal to any vehicle or intermodal container of merchandise for which an entry, withdrawal, or other approval document has been obtained for movement in-bond from the zone. The authorized affixing or breaking of that seal will be considered to have been done under Customs supervision. The operator shall report to the port director, upon arrival of the vehicle or container at the zone, any seal found to be broken, missing, or improperly affixed, and hold the vehicle or container and its contents intact pending instructions from the port director. If the operator does not obtain the written concurrence of the carrier as to the condition of the seal or delivering conveyance, the port director shall deem the seal or delivering conveyance to be intact. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986; 51 FR 11012, Apr. 1, 1986] § 146.9 Permission of operator. An application for permission to admit merchandise into a zone, or to manipulate, manufacture, exhibit, or destroy merchandise in a zone must include the written concurrence of the operator, except where the regulations of this part provide for the making of application by the operator itself or where the operator files a separate specific or blanket application. The written concurrence of the operator in the removal of merchandise from a zone is not required because the merchandise is released by the port director to the operator for delivery from the zone, as provided in § 146.71 (a). § 146.10 Authority to examine merchandise. The port director may cause any merchandise to be examined before or at the time of admission to a zone, or at any time thereafter, if the examination is considered necessary to facilitate the proper administration of any law, regulation, or instruction which Customs is authorized to enforce. § 146.11 Transportation of merchandise to a zone. (a) From outside Customs territory. (b) Through Customs territory, foreign merchandise. (c) From Customs territory, domestic merchandise. (d) From a bonded warehouse. § 146.12 Use of zone by carrier. (a) Primary use; lading and unlading. (b) Carrier in zone not exempt from law or regulations. § 146.13 Customs forms and procedures. Where a Customs form or other document is required in this part, the number of copies of the form or document required to be presented and their manner of distribution and processing shall be determined by the port director, except as otherwise specified in this part. § 146.14 Retail trade within a zone. Retail trade is prohibited within a zone except as provided in 19 U.S.C. 81o(d). See also the regulations of the Board as contained in 15 CFR part 400. Subpart B—Inventory Control and Recordkeeping System § 146.21 General requirements. (a) Systems capability. (1) Accounting for all merchandise, including domestic status merchandise, temporarily deposited, admitted, granted a zone status and/or status change, stored, exhibited, manipulated, manufactured, destroyed, transferred, and/or removed from a zone; (2) Producing accurate and timely reports and documents as required by this part; (3) Identifying shortages and overages of merchandise in a zone in sufficient detail to determine the quantity, description, tariff classification, zone status, and value of the missing or excess merchandise; (4) Providing all the information necessary to make entry for merchandise being transferred to the Customs territory; (5) Providing an audit trail to Customs forms from admission through manipulation, manufacture, destruction or transfer of merchandise from a zone either by zone lot or Customs authorized inventory method. (b) Procedures manual. (2) The operator shall keep current its procedures manual and shall submit to the port director any change at the time of its implementation. (3) The operator may authorize a zone user to maintain its individual inventory control and recordkeeping system and procedures manual. The operator shall furnish a copy of the zone user's procedures manual, including any subsequent changes, to the port director. However, the operator will remain responsible to Customs and liable under its bond for supervision, defects in, or failures of a system. (4) The operator's procedures manual and subsequent changes will be furnished to the port director for information purposes only. Customs receipt of a manual does not indicate approval or rejection of a system. (c) Liability of operator. § 146.22 Admission of merchandise to a zone. (a) Identification. (b) Reconciliation. (c) Incomplete documentation. (d) Recordation. (e) Harbor maintenance fee. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 87-44, 52 FR 10211, Mar. 30, 1987; 52 FR 10970, Apr. 6, 1987] § 146.23 Accountability for merchandise in a zone. (a) Identification of merchandise General. (2) Fungible merchandise. (b) Inventory records. (1) Location of merchandise; (2) Zone status; (3) Cost or value, unless operator's or user's financial records maintain cost or value and the records are made available for Customs review; (4) Beginning balance, cumulative receipts and removals, adjustments, and current balance on hand by date and quantity; (5) Destruction of merchandise; and (6) Scrap, waste, and by-products. (c) Physical inventory. § 146.24 Transfer of merchandise from a zone. (a) Accountability. (2) The inventory control and recordkeeping system for merchandise transfers must have the capability to trace all transfers back to a zone admission under a Customs authorized inventory method. (b) Information. § 146.25 Annual reconciliation. (a) Report. (b) Information required. (c) Certification. § 146.26 System review. The operator shall perform an annual internal review of the inventory control and recordkeeping system and shall report to the port director any deficiency discovered and corrective action taken, to ensure that the system meets the requirements of this part. Subpart C—Admission of Merchandise to a Zone § 146.31 Admissibility of merchandise into a zone. Merchandise of every description may be admitted into a zone unless prohibited by law. A distinction is made between prohibited and conditionally admissible merchandise. (a) Prohibited merchandise. (b) Conditionally admissible merchandise. § 146.32 Application and permit for admission of merchandise. (a)(1) Application on CBP Form 214 and permit. (2) CBP Form 214 and Importer Security Filing submitted via a single electronic transmission. (i) Country of origin; and (ii) Commodity HTSUS number if this number is provided at the 10-digit level. (b) Supporting documents Commercial documentation. (2) Evidence of right to make entry. (3) Release order. Authority is hereby given to release the merchandise described in this application to Name of Carrier Signature and title of carrier representative A blanket or qualified release order may be authorized for the transfer of merchandise to a zone as provided for in § 141.111 of this chapter. (4) Application to unlade. (5) Other documentation. (c) Conditions for issuance of a permit. (1) The application is properly executed and includes the zone status desired for the merchandise, as provided in subpart D of this part; (2) The operator's approval appears either on the application or in a separate specific or blanket approval; (3) The merchandise is retained for examination at the place of unlading, the zone, or other location designated by the port director, except for merchandise for direct delivery to a zone under §§ 146.39 and 146.40. The merchandise may be examined as if it were to be entered for consumption or warehouse; and (4) All requirements have been fulfilled. (d) Blanket application for admission of merchandise. (1) Shipments which arrive under one transportation entry as described in § 141.55 of this chapter, or (2) Shipments which are destined to the same zone applicant on a single business day, in which case the applicant shall: (i) Present the examination invoices required by paragraph (b) of this section to the port director before the merchadise is admitted into the zone, (ii) Have been approved for the direct transmittal of statistical trade information to the Bureau of Census under an agreement with that agency; and (iii) Have examination invoices containing a unique identifier to trace the shipment to the manifest of the carrier that brought the merchandise to the port having jurisdiction over the zone, as well as to the inventory control and recordkeeping system of the operator as described in subpart B. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by CBP Dec. 08-46, 73 FR 71782, Nov. 25, 2008] § 146.33 Temporary deposit for manipulation. Imported merchandise for which an entry has been made and which has remained in continuous Customs custody may be brought temporarily to a zone for manipulation and return to Customs territory under Customs supervision, pursuant to section 562, Tariff Act of 1930, as amended (19 U.S.C. 1562), and § 19.11 of this chapter. That merchandise will not be considered within the purview of the Act but will be treated as though remaining in Customs territory. No zone form or procedure will be considered applicable, but the merchandise will remain subject to any requirements necessary for the enforcement of section 562 and other Customs laws while in the zone. § 146.34 Merchandise transiting a zone. The following procedure is applicable when merchandise is to be unladen from any carrier in the zone for immediate transfer to Customs territory, or if it is to be transferred from Customs territory through the zone for immediate lading on any carrier in the zone: (a) Application. (b) Permit. (c) Treatment of merchandise. (d) Delay in zone transit. § 146.35 Temporary deposit in a zone; incomplete documentation. (a) General. (b) Application. (c) Conditions. (1) Be physically segregated from all other zone merchandise; (2) Be held under the bond and at the risk of the operator; and (3) Be manipulated only to the extent necessary to obtain sufficient information about the merchandise to file the appropriate admission or entry documentation. (d) Approval. (e) Submission of CBP Form 214. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by CBP Dec. 10-29, 75 FR 52452, Aug. 26, 2010] § 146.36 Examination of merchandise. Except for direct delivery procedures provided for in § 146.39, all merchandise covered by a Customs Form 214 may be retained for Customs examination at the place of unlading, the zone, or another location, as designated by the port director. The port director may authorize release of the merchandise without examination, as provided in § 151.2 of this chapter. If a physical examination is conducted, the Customs officer shall note the results of the examination on the examination invoices. § 146.37 Operator admission responsibilities. (a) Maintenance of admission documentation. (1) Lot file. (2) Authorized inventory method. (b) Examination invoice. (c) Liability for merchandise. (1) Signed jointly by the operator and carrier on the Customs Form 214 or other approved form within 15 days after admission of the merchandise, and reported to the port director within 2 working days thereafter; or (2) Submitted on Customs Form 5931 under the provisions of subpart A, part 158, of this chapter within 20 days after admission of the merchandise. The operator may file a Customs Form 5931 on behalf of the person who applied for admission of merchandise to the zone. (d) Supervision of merchandise. § 146.38 Certificate of arrival of merchandise. Whenever a certificate prepared by Customs as to the arrival of any merchandise in a zone is required by a Federal agency, the port director shall issue the document certifying only that authorization to deliver the merchandise to a zone has been made. The operator shall issue a certificate of arrival of merchandise at a zone. § 146.39 Direct delivery procedures. (a) General. (b) Application. (c) Criteria. (1) The merchandise is not restricted or of a type which requires Customs examination or documentation review before or upon its arrival at the zone; (2) The merchandise to be admitted to the zone, and the operations to be conducted therein, are known well in advance, are predictable and stable over the long term, and are relatively fixed in variety by the nature of the business conducted at the site; and (3) The operator is the owner or purchaser of the goods. (d) Application decision. (e) Revocation of approval. § 146.40 Operator responsibilities for direct delivery. (a) Arrival of conveyance. (1) Collect in-bond or cartage documentation from the carrier; (2) Check the condition of any seal affixed to the conveyance, and if broken, missing or improperly affixed, notify the port director and receive instructions before unloading the merchandise; (3) Check each incoming in-bond and cartage shipment to determine if the manifested quantity or the quantity on the cartage document agrees with the quantity actually received; (4) Sign and date the in-bond or cartage documentation to accept responsibility for the merchandise under the Foreign Trade Zone Operator's Bond and to relieve the carrier of responsibility. (5) Forward the in-bond or cartage documentation so as to reach the port director within 2 working days after the date of arrival of the conveyance at the subzone or zone site; (6) Maintain a file of open in-bond manifests in chronological order of date of conveyance arrival to identify shipments that have arrived but the entire contents of which have not been admitted to the subzone or zone site; and (7) Notify the port director, by annotation on the Customs Form 214, when the entire contents of a shipment have been admitted. (b) Transportation by operator. (1) Receipting for the merchandise and recording on the appropriate document any discrepancies regarding quantity, condition or the status of the seals; (2) Transporting the merchandise to the zone or subzone; and (3) Ensuring that the zone records reflect that the merchandise is received in the zone. (c) Admission of merchandise: alternative procedures Cumulative Customs Form 214. (2) Individual Customs Form 214. (3) General order. (4) Inventory control and recordkeeping system. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 94-81, 59 FR 51497, Oct. 12, 1994; T.D. 95-77, 60 FR 50020, Sept. 27, 1995; T.D. 98-74, 64 FR 6801, Feb. 11, 1999] Subpart D—Status of Merchandise in a Zone § 146.41 Privileged foreign status. (a) General. (b) Application. (c) Supporting documentation. (d) Determination of duties and taxes. (e) Status as privileged foreign merchandise binding. § 146.42 Nonprivileged foreign status. All of the following will have the status of nonprivileged foreign merchandise: (a) Foreign merchandise. (b) Waste. (c) Certain domestic merchandise. § 146.43 Domestic status. (a) General. (1) The growth, product, or manufacture of the U.S. on which all internal-revenue taxes, if applicable, have been paid; (2) Previously imported and on which duty and tax has been paid; or (3) Previously entered free of duty and tax. (b) Application. (c) Return of merchandise of Customs territory. § 146.44 Zone-restricted status. (a) General. (b) Application. (c) Merchandise considered exported For Customs purposes. (2) For other purposes. (d) Merchandise entered for warehousing transferred to a zone. Subpart E—Handling of Merchandise in a Zone § 146.51 Customs control of merchandise. No merchandise, other than domestic status merchandise provided for in § 146.43, will be manipulated, manufactured, exhibited, destroyed, or transferred from a zone in any manner or for any purpose, except under Customs permit as provided for in this part. The port director may require segregation of any zone status merchandise whenever necessary to protect the revenue or properly administer U.S. laws or regulations. § 146.52 Manipulation, manufacture, exhibition or destruction; Customs Form 216. (a) Application. (b) Approval. (2) The port director is authorized to approve a blanket application for a period of up to one year for a continuous or repetitive operation. The port director may disapprove or revoke approval of any application, or may require the operator to file an individual application. (c) Appeal of adverse ruling. (d) Report results Separate application. (2) Blanket application. (e) Destruction. § 146.53 Shortages and overages. (a) Report required. (1) Theft or suspected theft of merchandise; (2) Merchandise not properly admitted to the zone; or (3) Shortage of one percent (1%) or more of the quantity of merchandise in a lot or covered by a unique identifier, if the missing merchandise would have been subject to duties and taxes of $100 or more upon entry into the Customs territory. The operator shall record upon identification all shortages and overages, whether or not they are required to be reported to the port director at that time, in its inventory control and recordkeeping system. The operator shall record all shortages and overages as required in the annual reconciliation report under § 146.25. (b) Certain domestic merchandise. (c) Shortage Operator responsibility. (i) Never received in the zone; (ii) Removed from the zone under proper permit; (iii) Not removed from the zone; or (iv) Lost or destroyed in the zone through fire or other casualty, evaporation, spillage, leakage, absorption, or similar cause, and did not enter the commerce of the U.S. (2) Liability for duty and taxes. (d) Overage. (e) Damage. Subpart F—Transfer of Merchandise From a Zone § 146.61 Constructive transfer to Customs territory. The port director shall accept receipt of any entry in proper form provided under this subpart, and the merchandise described therein will be considered to have been constructively transferred to Customs territory at that time, even though the merchandise remains physically in the zone. If the entry is thereafter rejected or cancelled, the merchandise will be considered at that time to be constructively transferred back into the zone in its previous zone status. § 146.62 Entry. (a) General. (b) Documentation. (2) An in-bond application for merchandise to be transferred to another port or zone or for exportation must provide that the merchandise covered is foreign trade zone merchandise; give the number of the zone from which the merchandise was transferred; state the status of the merchandise; and, if applicable, bear the notation or endorsement provided for in § 146.64(c), § 146.66(b), or § 146.70(c). (c) Waiver of supporting documents. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by CBP Dec. 15-14, 80 FR 61291, Oct. 13, 2015; CBP Dec. 17-13, 82 FR 45407, Sept. 28, 2017] § 146.63 Entry for consumption. (a) Foreign merchandise. (b) Zone-restricted merchandise. (c) Estimated production Weekly entry. pro forma (2) Individual transfers. (d) Textiles and textile products. (1) In the country of origin of the merchandise as defined by § 102.21 or § 102.22 of this chapter, as applicable; (2) 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 (3) From one textile category to another textile category. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by CBP Dec. 05-32, 70 FR 58016, Oct. 5, 2005; CBP Dec. 15-14, 80 FR 61291, Oct. 13, 2015] § 146.64 Entry for warehouse. (a) Foreign merchandise. (b) Zone-restricted merchandise. (c) Textiles and textile products. (d) Time limit. § 146.65 Classification, valuation, and liquidation. (a) Classification Privileged foreign merchandise. (2) Nonprivileged foreign merchandise. (b) Valuation Total zone value. (2) Dutiable value. (3) Allowance. (c) Liquidation; extension to update cost data. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 91-79, 56 FR 46372, Sept. 12, 1991; T.D. 95-35, 60 FR 20632, Apr. 27, 1995; CBP Dec. No. 16-26, 81 FR 93020, Dec. 20, 2016] § 146.66 Transfer of merchandise from one zone to another. (a) At the same port. (b) At a different port. (c) Forwarding of merchandise history; documentation. (1) The following documentation must accompany merchandise maintained under a lot inventory control system: (i) A copy of the original CBP Form(s) 214 with accompanying invoices for admission of the merchandise and all components thereof; (ii) A copy of any CBP Form 214 filed subsequent to admission to change the status of the merchandise or its components; and (iii) A copy of any CBP Form 216 to manipulate or manufacture the merchandise. (2) The following documentation must accompany merchandise not under a lot system, and not manufactured in a zone: (i) A copy of the original CBP Form(s) 214 with accompanying invoices for admission of the merchandise as attributed under the particular zone inventory method; (ii) A copy of any CBP Form 214 filed subsequent to admission to change the status of the merchandise as attributed under the particular zone inventory method; and (iii) A copy of any CBP Form 216 to manipulate the merchandise as attributed under the particular zone inventory method. (3) If the documents specified in paragraph (c)(2) of this section are not presented, the operator of the transferring zone shall submit the following: (i) A statement of the zone value, dutiable value, quantity, description, unique identifier, and zone status (showing any changes of status after admission and whether the merchandise was manipulated so as to change its tariff classification) of all the merchandise in the shipment covered by the transportation entry; and (ii) A certification that the statement in paragraph (c)(3)(i) of this section, is true and that the information contained therein is contained in the inventory control and recordkeeping system of the transferring zone. (4) The following documentation must accompany merchandise not under a lot system, but manufactured in a zone: (i) A statement by the transferring zone operator of the zone value, dutiable value, quantity, description, unique identifier, and zone status of all the merchandise (and components thereof, where applicable) covered by the transportation entry. The statement will also show any change in zone status in the transferring zone and whether the merchandise has been manufactured or manipulated in the zone so as to change its tariff classification; and (ii) A certification by the operator of the transferring zone that the statement in paragraph (c)(4)(i) of this section is true and the information therein is contained in the inventory control and recordkeeping system of the zone. (5) The operator of the transferring zone shall transmit the historical documentation of the merchandise to the receiving zone within 10 working days after it has been delivered to the bonded carrier for transportation. The documentation will be referenced to the I.T. number covering the merchandise. (d) Arrival at destination zone. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 94-81, 59 FR 51497, Oct. 12, 1994; CBP Dec. 17-13, 82 FR 45407, Sept. 28, 2017] § 146.67 Transfer of merchandise for exportation. (a) Direct exportation. (b) Immediate exportation. (c) Transportation and exportation. (d) Textiles and textile products. (e) Merchandise produced or manufactured in a zone and returned to Customs territory after exportation. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 89-1, 53 FR 51263, Dec. 21, 1988; CBP Dec. 17-13, 82 FR 45407, Sept. 28, 2017] § 146.68 Transfer for transportation or exportation; estimated production. (a) Weekly permit. (b) Individual entries. (c) Statement of merchandise entered. [CBP Dec. 17-13, 82 FR 45407, Sept. 28, 2017] § 146.69 Supplies, equipment, and repair material for vessels or aircraft. (a) General. (b) Merchandise for delivery within zone. (c) Merchandise for delivery outside zone. § 146.70 Transfer of zone-restricted merchandise into Customs territory. (a) General. (b) For consumption. (c) For warehousing. (d) For other purposes. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 89-1, 53 FR 51263, Dec. 21, 1988; CBP Dec. 15-14, 80 FR 61291, Oct. 13, 2015] § 146.71 Release and removal of merchandise from zone. (a) General. (b) Liability for discrepancy. (c) Time limit. (d) Retention or return of merchandise to zone for consumption. (2) A component of merchandise which has been entered, but not physically removed from a zone, shall be restored to its last zone status, provided the port director determines that the component was included in the entry through clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of the law. Such an error, including that in appraisement of any entry or liquidation due to the above circumstances, may be corrected pursuant to section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. 1520(c)(1)), in accordance with the procedures described in part 173 of this chapter. If the port director decides there has been no error, mistake, or inadvertence, or that the information was not timely provided, the component will be considered as an overage and subject to the provisions of § 146.53(d). (3) When merchandise which has been entered for consumption is subsequently returned to a zone for a reason other than that specified in paragraph (d)(1) of this section, it shall be admitted in domestic status. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986; 51 FR 11012, Apr. 1, 1986] Subpart G—Penalties; Suspension; Revocation § 146.81 Penalties. (a) Amount. (b) Review. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 91-77, 56 FR 46115, Sept. 10, 1991] § 146.82 Suspension. (a) For cause. (1) The approval of the application to activate the zone was obtained through fraud or the misstatement of a material fact; (2) The operator neglects or refuses to obey any proper order of a Customs officer or any Customs order, rule, or regulation relating to the operation or administration of a zone; (3) The operator, or any officer of a corporation which has been granted the right to operate a zone, is convicted of or has commited acts which would constitute a felony, or misdemeanor involving theft, smuggling, or a theft-connected crime. Any change in the employment status of the corporate officer (e.g., discharge, resignation, demotion, or promotion) prior to conviction of a felony or prior to conviction of a misdemeanor involving theft, smuggling, or a theft-connected crime, resulting from acts committed while a corporate officer, will not preclude application of this provision; (4) The operator fails to furnish a current list of names, addresses, or other information as required by § 146.7; (5) The operator does not provide a secure facility or properly safeguard merchandise within a zone; (6) [Reserved] (7) The operator, or any officer, agent, or employee of the operator, discloses to an unauthorized person proprietary information contained on a Customs form or in the inventory control and recordkeeping system; or (8) The inventory control and recordkeeping system is impaired to the point where the identity of merchandise in zone status has been lost and cannot be reestablished without a suspension of zone operations. (b) Procedure Notice. (2) Hearing. (3) Decision of Assistant Commissioner. (4) Grantee. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 88-63, 53 FR 40220, Oct. 14, 1988; T.D. 95-99, 60 FR 62733, Dec. 7, 1995] § 146.83 Revocation of zone grant. (a) Recommendation of port director. (b) Decision of the Board. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 91-77, 56 FR 46115, Sept. 10, 1991; T.D. 99-27, 64 FR 13676, Mar. 22, 1999] Subpart H—Petroleum Refineries in Foreign-Trade Subzones Source: T.D. 95-35, 60 FR 20632, Apr. 27, 1995, unless otherwise noted. § 146.91 Applicability. This subpart applies only to a petroleum refinery (as defined herein) engaged in refining petroleum in a foreign-trade zone or subzone. Further, the provisions relating to zones generally, which are set forth elsewhere in this part, including documentation and document retention requirements, and entry procedures, such as weekly entry, shall apply as well to a refinery subzone, insofar as applicable to and not inconsistent with the specific provisions of this subpart. It does not cover zone-to-zone transfers in which the fact of removal from one zone is ignored. § 146.92 Definitions. (a) Attribution. (b) Feedstocks. (c) Feedstock factor. (d) Final product. (e) Manufacturing period. (f) Petroleum refinery. (g) Price of product. (h) Producibility. (i) Relative value. (j) Time of separation. (k) Weighted average. § 146.93 Inventory control and recordkeeping system. (a) Attribution. (1) Producibility. (2) Actual production records. (3) Other inventory method. (b) Feedstock eligible for attribution. (c) Consumption or removal of final product. (d) Relative value. (e) Privileged status after admission. (f) Consistent use required. § 146.94 Records concerning establishment of manufacturing period. (a) Feedstock admitted into the refinery subzone. (b) Final product consumed in or removed from subzone. (c) Consumption or removal. (d) Gain or loss. (e) Determining gain or loss; acceptable methods Converting volume to weight. (2) Calculating feedstock factor to account for volume gain or loss. (3) Calculating volume difference. § 146.95 Methods of attribution. (a) Producibility General. (2) Industry standards of potential production. (3) Attribution to product or feedstock not listed in T.D. 66-16. (ii) An operator may attribute a final product to a feedstock in excess of the amount allowed under T.D. 66-16, when authorized by Customs, without losing the ability to attribute under T.D. 66-16 for all other feedstock-final product combinations. The operator must use its actual production records for the requested feedstock-final product combination. The operator must agree in writing that it will not, and it will not enable any other person, to file a drawback claim under 19 U.S.C. 1313 inconsistent with those actual production records for that feedstock-final product combination. The operator shall file its request in accordance with paragraph (a)(3) of this section. The Director, ORA, and the Director, OLSS, must determine whether T.D. 66-16 needs to be modified and shall publish in the Customs Bulletin each approval granted under this paragraph and request public comments with each such approval. (4) Attribution to privileged foreign feedstock; relative value. (b) Refinery operating records. Example. If the operator mixes three equal quantities of material in a day tank and treats that product as a three-part mixture in its production unit, Customs will accept the resulting product as composed of the three materials. If, in the alternative, the operator assumes that the three products do not mix and treats the first product as being composed of the first material put into the day tank, the second product as composed of the second material put into the day tank, and the third product as being composed of the third material put into the day tank, Customs will accept that convention also. § 146.96 Approval of other recordkeeping systems. (a) Approval procedure. (1) An explanation of the method describing how attribution will be made when a finished product is removed from or consumed in the subzone, and how and when the feedstocks will be decremented; (2) A mathematical example covering at least two months which shows the amounts attributed, all necessary relative value calculations, the dates of consumption and removal, and the amounts and dates that the transactions are reported to Customs. (b) Failure to comply. (c) Determination by Director. Appendix to Part 146—Guidelines for Determining Producibility and Relative Values for Oil Refinery Zones Where an example is set out in this appendix, the example is for purposes of illustrating the application of a provision, and where there is any inconsistency between the example and the provision, the provision prevails to the extent of the inconsistency. Alternative formats are also acceptable so long as they are consistent with the provisions of this part. I. Attribution Using Producibility Showing Manufacturing Periods From Admission to Removal Within a Calendar Month. Volume losses and gains accounted for by weight. Day 1 Receipt into the refinery subzone during a 30-day month: 50,000 pounds privileged foreign (PF) class II crude oil. 50,000 pounds PF class III crude oil. 50,000 pounds domestic status class III crude oil. Day 10 Removal from the refinery subzone for exportation of 50,000 pounds of aviation gasoline. The period of manufacture for the aviation gasoline is Day 1 to Day 10. The refiner must first attribute the designated source of the aviation gasoline. In order to maximize the duty benefit conferred by the zone operation, the refiner chooses to attribute the exported aviation gasoline to the privileged foreign status crude oil. Under the tables for potential production (T.V. 66-16), class II crude has a 30% potential, and class III has a 40% potential. The maximum aviation gasoline producible from the class II crude oil is 15,000 pounds (50,000 × .30). The maximum aviation gasoline producible from the privileged foreign status class III crude oil is 20,000 pounds (50,000 × .40). The domestic class III crude would also make 20,000 pounds of aviation gasoline. The refiner could attribute 15,000 pounds of the privileged foreign class II crude oil, 20,000 pounds of the privileged foreign class III crude oil, and 15,000 pounds of the domestic class III crude oil as the source of the 50,000 pounds of the aviation gasoline that was exported; 35,000 pounds of class II crude oil would be available for further production for other than aviation gasoline, 30,000 pounds of privileged foreign class III crude oil would be available for further production for other than aviation gasoline, and 35,000 pounds of domestic status class III crude oil would be available for further production, of which up to 5,000 pounds could be attributed to aviation gasoline. Day 21 Receipt in the refinery subzone: 50,000 pounds PF status class I crude oil. 50,000 pounds PF status class IV crude oil. Day 30 Removal from the refinery subzone: 30,000 pounds of motor gasoline for consumption. 10,000 pounds of jet fuel sold to the US Air Force for use in military aircraft. 10,000 pounds of aviation gasoline sold to a U.S. commuter airline for domestic flights. 10,000 pounds of kerosene for exportation. To the extent that the crude oils that entered production on Day 1 are attributed as the designated sources for the products removed on Day 30, the period of manufacture is Day 1 to Day 30. If the refiner chooses to attribute the crude oils that were admitted on Day 21 as the designated sources of the products removed on Day 30 using the production standards published in T.D. 66-16, the manufacturing period is Day 21 to Day 30. This choice will be important if a relative value calculation on the privileged foreign status crude oil is required, because the law requires the value used for computing the relative value to be the average per unit value of each product for the manufacturing period. Relative value must be calculated if a source feedstock is separated into two or more products that are removed from the subzone refinery. If the average per unit value for each product differs between the manufacturing period from Day 1 to Day 30 and the manufacturing period from Day 21 to Day 30, the correct period must be used in the calculation. In order to minimize duty liability, the refiner would try to attribute the production of the exported kerosene and the sale of the jet fuel to the US Air Force to the privileged foreign crude oils. For the same reason, the refiner would try to attribute the removed motor gasoline and the aviation gasoline for the commuter airline to the domestic crude oil. Accordingly, the refiner chooses to attribute up to 5,000 pounds of the domestic status class III crude as the source of the 10,000 pounds of aviation gasoline removed from the subzone refinery for the commuter airline. Since no other aviation gasoline could have been produced from the crude oils that were admitted into the refinery subzone Day 1, the refiner must attribute the remainder to the crude oils that entered production on Day 21. Again, using the production standards from T.D. 66-16, the class I crude could produce aviation gasoline in an amount up to 10,000 pounds (50,000 × .20). Likewise, the class IV crude oil could produce aviation gasoline in an amount up to 8,500 pounds (50,000 × .17). The refiner selects use of the class I crude as the source of the aviation gasoline. The refiner could attribute up to 27,300 pounds (35,000−5,000 × .91) of the domestic class III crude oil as the source of the motor gasoline. This would leave 2,700 pounds of domestic class III crude available for further production for other than aviation gasoline or motor gasoline. The remaining motor gasoline removed (also 2,700 pounds) must be attributed to a privileged foreign crude oil. The refiner selects the privileged foreign class II crude oil that entered production on Day 1 as the source for the remaining 2,700 pounds of motor gasoline. This would leave 32,300 pounds of privileged foreign class II crude oil available for further production, of which no more than 27,400 pounds could be designated as the source of motor gasoline. The refiner attributes the jet fuel that is removed from the refinery subzone for the US Air Force for use in military aircraft to the privileged foreign class II crude oil. The refiner could attribute up to 20,995 pounds of jet fuel from that class II crude oil (32,300 × .65). Designating that class II crude oil as the source of the 10,000 pounds of jet fuel leaves 22,300 pounds of privileged foreign class II crude oil available for further production, of which up to 10,995 pounds could be attributed as the source of the jet fuel. Because the motor gasoline and the jet fuel, under the foregoing attribution, would be considered to have been separated from the privileged foreign class II crude oil, a relative value calculation would be required. The jet fuel is eligible for removal from the subzone free of duty by virtue of 19 U.S.C. 1309(a)(1)(A). The refiner could attribute the privileged foreign class II crude oil as being the source of the 10,000 pounds of jet fuel (22,300 × .65). The refiner chooses to attribute the privileged foreign class III crude oil as the source of the jet fuel. The refiner could attribute to that class III crude oil up to 15,000 pounds of kerosene (30,000 × .50). II. Attribution on a FIFO Basis (Accounting for volume losses or gains by the weight method) Day 1-5 Transfer, into the Refinery Subzone, from one or more storage tanks into process 150 barrels of Privileged Foreign (PF) Class II crude oil, equivalent to 50,000 pounds. Day 6 Removal from the refinery subzone 119 barrels of residual oils to customs territory, equivalent to 40,000 pounds. Since the operator uses the FIFO method of attribution, as the product is removed from the subzone, or consumed or lost within the subzone, attribution must be to the oldest feedstock available for attribution. Accordingly, the 40,000 pounds of residual oils will be attributed to 40,000 pounds of the PF Class II crude oil from Day 1-5. Day 10 Transfer, into the refinery subzone, from one or more storage tanks 4 barrels of domestic motor gasoline blend stock, equivalent to 1,000 pounds to motor gasoline blending tank. Day 6-15 Transfer, into the refinery subzone, from one or more storage tanks into process 320 barrels of Domestic Class III crude oil, equivalent to 100,000 pounds. Day 16 Removal from the refinery subzone 14 barrels of asphalt to customs territory, equivalent to 5,000 pounds. The 5,000 pounds of asphalt will be attributed to 5,000 pounds of PF Class II crude oil from Day 1-5. Day 17 Removal from the refinery subzone, 324 barrels of motor gasoline to customs territory, equivalent to 81,000 pounds. The 81,000 pounds of motor gasoline will be attributed to 1,000 pounds of domestic motor gasoline blend stock from Day 10, to the remaining 5,000 pounds of PF Class II crude oil from Day 1-5 and 75,000 pounds of domestic Class III crude oil from Day 6-15. Day 16-20 Transfer, into the refinery subzone, from one or more storage tanks into process 169 barrels of Privileged Foreign (PF) Class III crude oil, equivalent to 50,000 pounds. Day 22 Removal from the refinery subzone, 214 barrels of jet fuel for exportation, equivalent to 60,000 pounds. The 60,000 pounds of jet fuel will be attributed to the remaining 25,000 pounds of domestic Class III crude oil from Day 6-15 and 35,000 pounds of PF Class III crude oil from Day 16-20. Day 21-25 Transfer, into the refinery subzone from one or more storage tanks into process, 143 barrels of domestic Class I crude oil, equivalent to 50,000 pounds. Day 30 (End of the Manufacturing Period) It is determined that during the manufacturing period just ended, that 34 barrels of fuel, equivalent to 10,000 pounds was consumed, and 5 barrels of oil, equivalent to 1,500 pounds was lost in the refining production process within the refinery subzone. The 10,000 pounds of fuel consumed will be attributed 10,000 pounds of PF Class III crude oil from Day 16-20. The 1,500 pounds of oil lost in the refining production process will be attributed to 1,500 pounds of PF Class III crude oil from Day 16-20. The remaining 3,500 pounds of PF Class III crude oil from Day 16-20 will be the first to be attributed during the next manufacturing period. III. Relative Value Calculation Because privileged foreign feedstocks transferred into process during Day 1-5 and Day 16-20 have two or more products attributed to them, each feedstock will require a relative value calculation. Relative value calculation for UIN Day 1-5, 50,000 pounds, equivalent to 150 barrels. A B C D E F G Residual oil 40,000 119 15.00 1,785 .9047 108 108 Asphalt 5,000 14 13.00 182 .7840 11 11 Motor gasoline 5,000 20 26.00 520 1.5682 31 31 Totals 50,000 153 2,487 150 150 A = Pounds Attributed. B = Equivalent Barrels. C = Price of Product. D = B × C. E = C/(Total of Column D/Attributed Crude BBLS). Residual Oil RV Factor = 15.00/(2,487/150) = .9047. F = B × E. G = Dutiable Barrels. Since all products attributed to the 50,000 pounds (150 BBLS) of PF Class II crude entered customs territory duty equals $7.88 (150 × .0525). Feedstock factor calculation for UIN Day 16-20, 46,500 pounds equivalent to 157 barrels. Lbs BBLS $/BBL Product value Feedstock factor R.V. BBL Dutiable BBL Jet Fuel 35,000 125 27.00 3,375 1.1030 138 0 Fuel 10,000 34 12.00 408 0.4902 17 0 Consumed Process Loss 1,500 5 12.00 60 0.4902 2 0 Totals 46,500 164 3,843 157 0 Since jet fuel was exported, no duty is applicable. Fuel consumed for refinery process was consumed within the subzone premises and did not enter customs territory, thus no duty is applicable (assume refinery not barred by duty-free consumption restriction). Likewise, the process loss occurred entirely within the subzone. Therefore, no duty is applicable. IV. Attribution to Privileged Foreign Feedstock; Relative Value; Monthly Manufacturing Period, Weekly Entries, Attribution to a Prior Period; Volume Loss or Gain Shown by Volume Differences. An operator who elects to attribute on a monthly basis files the following estimated removal of final products for the first week in September: Jet Fuel (deemed exported on international flights) 20,000 Gasoline—Domestic Consumption 15,000 Duty-free certified as emergency war material 10,000 Petroleum coke exportations 10,000 Distillate for consumption 5,000 Petrochemicals exported 10,000 Total removals 70,000 Because it does not elect to make attributions for feedstocks that were charged to operating units during the same week, the operator attributes the estimated removals to final products made during August from the following feedstocks: Class II PF (privileged foreign) crude 20,000 Class III PF crude 35,000 Class III D (domestic) crude 20,000 Class III NPF (nonprivileged foreign crude 20,000 95,000 During August the operator produced from those feedstocks: Jet 35,000 Gasoline 40,000 Petroleum Coke 10,000 Distillate 5,000 Petrochemicals 15,000 105,000 There is a gain of 105,000−95,000 = 10,000 Using the tables in T.D. 66-16, the following choices are available for attribution: Charged Jet Gasoline Petrolum coke Distillate Petro-chemical Class II PF Crude 20,000 13,000 17,200 4,400 17,200 5,000 Class III PF Crude 35,000 24,500 31,850 14,000 31,150 10,150 Class III D Crude 20,000 14,000 18,200 8,000 17,800 5,800 Class III NPF Crude 20,000 14,000 18,200 8,000 17,800 5,800 Feedstock factors are calculated: Barrels Value Value Feedstock factors Gasoline 40,000 $25 $1,000,000 .9117 Jet Fuel 35,000 23 805,000 .8388 Distillate 5,000 20 100,000 .7294 Petroleum Coke 10,000 10 100,000 .3647 Petrochemicals 15,000 40 600,000 1.4587 105,000 2,605,000 Gain −10,000 $2,605,000 Total 1 = $27.42 average value p/bbl Using the feedstock factor the refiner makes the following attributions: Jet Fuel 24,192 (20,291 feedstock attributed to Class III PF Crude). 10,808 Class III NPF Crude (attribution of 9066 solely for purpose of accounting for the amount of NPF used). 35,000 Gasoline 5,000 (4,559 feedstock attributed to Class III PF Crude). 5,000 Class III NPF Crude (attribution of 4599 solely for purpose of accounting for the amount of NPF used). 15,000 (13,676 feedstock attributed to Class III D Crude). Petroleum Coke 8,418 (3,070 feedstock attributed to Class II PF Crude). 1,582 Class III NPF Crude (attribution of 577 solely for purposes of accounting for the amount of NPF used). 10,000 Distillate 5,000 (3,647 feedstock attributed to Class III Domestic). Petrochemicals 3,975 (5,800 feedstock attributed to Class III NPF Crude). 6,025 (8,789 feedstock attributed to Class III PF Crude). 10,000 V. Weekly Entry, Weekly Manufacturing Period, and Relative Values Calculated on the Actual Weighted Average Values at the End of the Week. On the weekly estimated production CF 3461, the refiner is required to provide a pro forma invoice or schedule showing the number of units of each type of merchandise to be removed during the week and their zone and dutiable values. For example, on CF 3461 the refiner estimates the following shipments and relative values for the next week and files this on the preceding Friday. Product week 1 PF shipments (MBBLS) Value/barrel (platts) Total value Motor Gasoline 20,000 $35 $700,000 Total Alkylate 25,000 35 875,000 Heavy Reformate 60,000 35 2,100,000 Reformer Feed 110,000 35 3,850,000 Raffinates 200,000 35 7,000,000 Jet Fuel 200,000 35 7,000,000 Total 615,000 $21,525,000 Attributed Feedstock—Class III Crude: 615,000@ $105 = $64,575 (estimated duties) During that week the refiner actually removes the following products and reports those on the CF 7501, or its electronic equivalent, filed within 10 business days after the CF 3461 is filed. Column 3 is the actual “weighted average” value for the manufacturing period, therefore, no reconciliation is necessary. 1 2 3 4 5 6 7 6 Week 1: Motor Gasoline 19,977 $35.70 $713,179 1.104545 22,065 $2,317 Total Alkylate 22,907 42.50 973,548 1.314935 30,121 3,163 Heavy Reformate 58,164 31.42 1,827,513 .972123 56,542 5,937 Reformer Feed 100,279 31.42 3,150,766 .972123 97,484 10,235 Raffinates 170,293 29.55 5,032,158 .914266 155,693 16,348 Jet Fuel 168,433 30.04 5,059,727 .929426 156,546 16,437 Total 540,053 16,756,891 518,451 54,437 (9) (10) Class III Crude Consumed 518,451 × $.105 = $54,437 Volumetric Gain 21,602 Avg. Value/Barrel Crude Consumed = $16,756,891 ÷ 518,451 = $32.321 (8) This example shows volumetric gain of 21,602 mbbls. However, in that PF was requested, liquidated duties are only on actual feedstock (class III crude) used in the refining process. (518,451 @ $.105 = $54,437). VI. Weekly Entry, Monthly Manufacturing Period, and Relative Values Calculated on the Actual Weighted Average Values at the End of the Month. For example, on the CF 3461 the refiner estimates the following shipments and relative values for the next week and files this on the preceding Friday. 1 2 3 4 Week 1: Motor Gasoline 20,000 $35 $700,000 Total Alkylate 25,000 35 875,000 Heavy Reformate 60,000 35 2,100,000 Reformer Feed 110,000 35 3,850,000 Raffinates 200,000 35 7,000,000 Jet Fuel 200,000 35 7,000,000 Total 615,000 21,525,000 Attributed Feedstock—Class III Crude: 615,000 @ $.105 = $64,575 (estimated duties) During the week the refiner actually removes the following products and reports those on the CF 7501, or its electronic equivalent, filed within 10 business days after the CF 3461 is filed. The reported relative values may be an estimate based on Platts, prior period actual prices, or the refiner's transfer prices. For this example, the estimates are based on the refiner's actual transfer prices. Listed below are the data to be shown on the weekly CF 7501s, or their electronic equivalents, with actual quantities shipped and estimated values for weeks 1-5. 1 2 3 4 5 6 7 6 Week 1: Motor Gasoline 19,977 $35.70 $713,179 1.104545 22,065 $2,317 Total Alkylate 22,907 42.50 973,548 1.314935 30,121 3,163 Heavy Reformate 58,164 31.42 1,827,513 .972123 56,542 5,937 Reformer Feed 100,279 31.42 3,150,766 .972123 97,484 10,235 Raffinates 170,293 29.55 5,032,158 .914266 155,693 16,348 Jet Fuel 168,433 30.04 5,059,727 .929426 156,546 16,437 Total 540,053 16,756,891 518,451 $54,437 (9) (10) Class III Crude Consumed 518,451 × $.105 = $54,437 Volumetric Gain 21,602 Avg. Value/Barrel Crude Consumed = $16,756,891 ÷ 518,451 = $32.321 (8) 1 2 3 4 5 6 7 Week 2: Motor Gasoline 20,651 $36.90 $762,022 1.145429 23,654 $2,484 Total Alkylate 23,435 44.25 1,036,999 1.373584 32,190 3,380 Heavy Reformate 59,819 30.35 1,815,507 .942108 56,358 5,918 Reformer Feed 101,167 30.10 3,045,127 .934347 94,526 9,925 Raffinates 172,317 29.30 5,048,888 .909514 156,726 16,456 Jet fuel 165,291 30.70 5,074,434 .952972 157,519 16,539 Total 542,680 $16,782,977 520,973 $54,702 Class III Crude Consumed 520,973 × $.105 = $54,702 Volumetric Gain 21,707 Avg. Value/Barrel Crude Consumed = $32.215 1 2 3 4 5 6 7 Week 3: Motor Gasoline 18,689 $34.90 $652,246 1.091819 20,405 $2,142 Total Alkylate 21,511 40.25 865,818 1.259190 27,087 2,844 Heavy Reformate 57,371 30.90 1,772,764 .966682 55,460 5,823 Reformer Feed 99,707 30.90 3,080,946 .966682 96,386 10,121 Raffinates 168,112 29.65 4,984,521 .927577 155,938 16,374 Jet Fuel 172,092 29.85 5,136,946 .933834 160,707 16,874 Total 537,482 $16,493,241 515,983 $54,178 Class III Crude Consumed 515,983 × $.105 = $54,178 Volumetric Gain 21,499 Avg. Value/Barrel Crude Consumed = $31.965 1 2 3 4 5 6 7 Week 4: Motor Gasoline 21,905 $32.85 $719,579 1.027237 22,502 $2,363 Total Alkylate 22,552 38.75 873,890 1.211733 27,327 2,869 Heavy Reformate 58,116 29.60 1,720,234 0.925607 53,791 5,648 Reformer Feed 101,058 29.40 2,971,105 0.919353 92,908 9,755 Raffinates 169,823 30.15 5,120,163 0.942806 160,110 16,812 Jet Fuel 171,493 31.05 5,324,858 0.970949 166,511 17,484 Total 544,947 $16,729,829 523,149 $54,931 Class III Crude Consumed 523,149 × $.105 = $54,931 Gain 21,798 Avg. Value/Barrel Crude Consumed = $31.979 1 2 3 4 5 6 7 Week 5: Motor Gasoline 8,990 $37.25 $334,878 1.136260 10,215 $1,073 Total Alkylate 9,984 45.10 450,278 1.375713 13,735 1,442 Heavy Reformate 25,351 31.50 798,557 0.960864 24,360 2,558 Reformer Feed 43,492 31.35 1,363,474 0.956288 41,592 4,367 Raffinates 75,172 29.95 2,251,401 0.913583 68,677 7,211 Jet fuel 75,795 30.56 2,316,295 0.932190 70,654 7,418 Total 238,784 $7,514,883 229,233 $24,069 Class III Crude Consumed 229,233 × $.105 = $24,069 Gain 9,551 Avg. Value/Barrel Crude Consumed = $32.783 As provided in the regulations, the refiner files an amended CF 7501 for each week based on the refiner's actual weighted average values for the month, as shown below. Product Value/ barrel (MBBLS) Month End: Motor Gasoline $35.27 Total Alkylate 41.84 Heavy Reformate 30.66 Reformer Feed 30.54 Raffinates 29.69 Jet Fuel 30.42 Reconciliation of Week 1 Using Month's End Actual Weighted Average Values 1 2 3 4 5 6 7 6 Motor Gasoline 19,977 $35.27 $704,589 1.095716 21,889 $2,298 Total Alkylate 22,907 41.84 958,429 1.299823 29,775 3,126 Heavy Reformate 58,164 30.66 1,783,308 .952499 55,401 5,817 Reformer Feed 100,279 30.54 3,062,521 .948771 95,141 9,990 Raffinates 170,293 29.69 5,055,999 .922365 157,072 16,493 Jet Fuel 168,433 30.42 5,123,732 .945043 159,176 16,713 Total 540,053 $16,688,578 518,454 54,437 (9) (10) Class III Crude Consumed = 518,454 × $.105 = $54,437 Volumetric Gain 21,599 Avg.Value/Bbl Crude Consumed = $16,688,578 ÷ 518,454 = $32.189 (8) Note: No change in amended total duties, because duty is computed on total quantity of class III crude used. The difference is amongst the various products, i.e. VII. Weekly entry, monthly manufacturing period, relative values calculated on prior manufacturing period's actual weighted average values. The prior period (PP) values are set forth below: Product Value/Barrel Motor Gasoline § 35.28 Total Alkylate 41.90 Heavy Reformate 31.78 Reformer Feed 30.02 Raffinates 31.10 Jet Fuel 28.80 Thereafter, the information provided or both the CF 3461, or its electronic equivalent, and CF 7501 filed for each weekly entry with respect to relative values would remain the same. The only estimated amount would be the quantity to be removed on the CF 3461, or its electronic equivalent, as shown below. On the CF 3461, or its electronic equivalent, the refiner estimates the following shipments and uses a prior manufacturing period's actual weighted average values. 1 2 3 4 Week 1 Motor Gasoline 20,000 $35.28 $705,600 Total Alkylate 25,000 41.90 1,047,500 Heavy Reformate 60,000 31.78 1,906,800 Reformer Feed 110,000 30.02 3,302,200 Raffinates 200,000 31.10 6,220,000 Jet Fuel 200,000 28.80 5,760,000 Total 615,000 18,942,100 Attributed Feedstock—Class III Crude: 615,000 @ $.105 = $64,575 (estimated duties) On the CF 7501, the refiner reports the following shipments and uses a prior manufacturing period's actual average values. 1 2 3 4 5 6 7 6 Week 1: Motor Gasoline 19,977 $35.28 $704,789 1.097219 21,919 $2,902 Total Alkylate 22,907 41.90 959,803 1.303104 29,850 3,134 Heavy Reformate 58,164 31.78 1,848,452 .988368 57,486 6,036 Reformer Feed 100,279 30.02 3,010,376 .933632 93,623 9,830 Raffinates 170,293 31.10 5,296,112 .967220 164,710 17,295 Jet Fuel 168,433 28.80 4,850,870 .895689 150,863 15,840 Total 540,053 $16,670,402 518,451 $54,437 (9) (10) Class III Crude Used 518,451 × $.105 = $54,437 Volumetric Gain 21,602 Avg. Value/Barrel Crude Used = $16,670,402 ÷ 518,451 = $32.154 (8) 1 2 3 4 5 6 7 Week 2: Motor Gasoline 20,651 $35.28 $728,567 1.096128 22,636 $2,377 Total Alkylate 23,435 41.90 981,926 1.301808 30,508 3,203 Heavy Reformate 59,819 31.78 1,901,048 .987386 59,064 6,202 Reformer Feed 101,167 30.02 3,037,033 .932704 94,359 9,908 Raffinates 172,317 31.10 5,359,059 .966259 166,503 17,483 Jet Fuel 165,291 28.80 4,760,381 .894799 147,903 15,529 Total 542,680 16,768,014 520,973 54,702 Class III Crude Used 520,973 × $.105 = $54,702 Volumetric Gain 21,707 Avg. Value/Barrel Crude Used = $32.186 1 2 3 4 5 6 7 Week 3: Motor Gasoline 18,689 $35.28 $659,348 1.099168 20,542 $2,157 Total Alkylate 21,511 41.90 901,311 1.305418 28,081 2,948 Heavy Reformate 57,371 31.78 1,823,250 .990124 56,803 5,964 Reformer Feed 99,707 30.02 2,993,204 .935290 93,254 9,792 Raffinates 168,112 31.10 5,228,283 .968938 162,889 17,103 Jet Fuel 172,092 28.80 4,956,250 .897280 154,414 16,214 Total 537,482 16,561,646 515,983 54,178 Class III Crude Used 515,983 × $.105 = $54,178 Volumetric Gain 21,499 Avg. Value/Barrel Crude Used = $32.097 1 2 3 4 5 6 7 Week 4: Motor Gasoline 21,905 $35.28 $772,808 1.097390 24,038 $2,524 Total Alkylate 22,552 41.90 944,929 1.303306 29,391 3,086 Heavy Reformate 58,116 31.78 1,846,926 .988522 57,447 6,032 Reformer Feed 101,058 30.02 3,033,761 .933777 94,365 9,908 Raffinates 169,823 31.10 5,281,495 .967371 164,281 17,250 Jet Fuel 171,493 28.80 4,938,998 .895829 153,627 16,131 Total 544,947 16,818,917 523,149 54,931 Class III Crude Used 523,149 × $.105 = $54,931 Volumetric Gain 21,798 Avg. Value/Barrel Crude Used = $32.149 1 2 3 4 5 6 7 Week 5: Motor Gasoline 8,990 $35.28 $317,167 1.097698 9,868 $1,036 Total Alkylate 9,984 41.90 418,330 1.303671 13,016 1,367 Heavy Reformate 25,351 31.78 805,655 .988799 25,067 2,632 Reformer Feed 43,492 30.02 1,305,630 .934039 40,623 4,265 Raffinates 75,172 31.10 2,337,849 .967642 72,740 7,638 Jet Fuel 75,795 28.80 2,182,896 .896080 67,919 7,131 Total 238,784 7,367,527 229,233 24,069 Class III Crude Used 229,233 × $.105 = $24,069 Volumetric Gain 9,551 Avg. Value/Barrel Crude Used = $32.14 At the end of the month, the refiner must calculate its actual weighted average values for use in the subsequent period. Reconciliation of Relative Value for the Subsequent Period 1 2 3 4 5 6 7 Month End: Motor Gasoline 90,212 $35.27 $3,181,777 1.095682 98,844 $10,379 Total Alkylate 100,389 41.84 4,200,276 1.299783 130,484 13,701 Heavy Reformate 258,821 30.66 7,935,452 .952470 246,519 25,885 Reformer Feed 445,703 30.54 13,611,770 .948742 422,857 44,400 Raffinates 755,717 29.69 22,437,238 .922336 697,025 73,188 Jet Fuel 753,104 30.42 22,909,424 .945014 711,694 74,726 Total 2,403,946 74,275,937 2,307,423 242,279 (9) (10) Class III Crude Used 2,307,423 × $.105 = $242,279 Volumetric Gain 96,523 Avg. Value/Barrel Crude Used = $74,275,937 ÷ 2,307,423 = $32.19 (8) Note: Actual monthly reconciliation data could result in attributions on a product basis that are less than or greater than weekly distributions. This is due to the “weighing” of the data i.e. [T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by CBP Dec. 15-14, 80 FR 61291, Oct. 13, 2015]