CSMS Message: 94-000955

TO : ALL ABI BROKERS.

FROM : DALE SNELL

SUBJECT : PIPELINE - DRAFT REGS.

DATE : 09/19/94

NOTICE: THIS IS A DRAFT DOCUMENT

DEPARTMENT OF THE TREASURY
UNITED STATES CUSTOMS SERVICE

19 CFR PARTS 10, 18

(T.D. 94-___)

WAREHOUSE WITHDRAWALS; AIRCRAFT FUEL SUPPLIES;
PIPELINE TRANSPORTATION IN BOND OF MERCHANDISE

RIN ___________

AGENCY: U.S. CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY.
ACTION: NOTICE OF INTERIM REGULATIONS, SOLICITATION OF COMMENTS.
SUMMARY: THE AMENDMENTS CONTAINED IN THIS DOCUMENT ARE BEING
PUBLISHED AS INTERIM REGULATIONS TO IMPLEMENT CERTAIN STATUTORY
AMENDMENTS TO THE CUSTOMS LAWS REGARDING RECORDKEEPING FOR
MERCHANDISE TRANSPORTED BY PIPELINE AND DUTY-FREE WITHDRAWALS
FROM CUSTOMS BONDED WAREHOUSES OF AIRCRAFT TURBINE FUEL. THESE
STATUTORY AMENDMENTS ARE CONTAINED IN THE CUSTOMS MODERNIZATION
PROVISIONS OF THE NORTH AMERICAN FREE TRADE AGREEMENT
IMPLEMENTATION ACT. ALSO, THE INTERIM REGULATIONS CLARIFY THE
PROCEDURES APPLICABLE TO BONDED AIRCRAFT TURBINE FUEL WHICH IS
WITHDRAWN FROM CUSTOMS CUSTODY FOR CERTAIN DUTY-FREE USE AND IS
COMMINGLED WITH OTHER LOTS OF FUEL BEFORE BEING SO USED.

DATE: INTERIM RULE EFFECTIVE (INSERT DATE 45 DAYS FROM DATE OF
PUBLICATION IN THE FEDERAL REGISTER); COMMENTS MUST BE RECEIVED
ON OR BEFORE (INSERT DATE 30 DAYS FROM DATE OF PUBLICATION IN THE

FEDERAL REGISTER).

ADDRESS: WRITTEN COMMENTS (PREFERABLY IN TRIPLICATE) MUST BE
SUBMITTED TO U.S. CUSTOMS SERVICE, ATTN: REGULATIONS BRANCH,
FRANKLIN COURT, 1301 CONSTITUTION AVENUE, NW., WASHINGTON, D.C.
20229, AND MAY BE INSPECTED AT THE REGULATIONS BRANCH, 1099 14TH
STREET, NW., SUITE 4000, WASHINGTON, D.C.

FOR FURTHER INFORMATION CONTACT:
WILLIAM G. ROSOFF, OFFICE OF REGULATIONS AND RULINGS,
(202-482-7040).

SUPPLEMENTARY INFORMATION:
BACKGROUND
ON DECEMBER 8, 1993, THE PRESIDENT OF THE U.S. SIGNED INTO
LAW PUBLIC LAW 103-182, THE NORTH AMERICAN FREE TRADE AGREEMENT
IMPLEMENTATION ACT (107 STAT. 2057). TITLE VI OF THIS ACT,
POPULARLY KNOWN AS THE CUSTOMS MODERNIZATION ACT (THE ACT)
AMENDED CERTAIN CUSTOMS LAWS. SECTION 664 OF THE ACT AMENDED THE
CUSTOMS LAWS BY THE INSERTION OF A NEW 553A, TARIFF ACT OF 1930
(19 U.S.C. 1553A), AND 665 OF THE ACT AMENDED 557(A),
TARIFF ACT OF 1930, AS AMENDED (19 U.S.C. 1557(A)). UNDER THE
NEW 1553A, MERCHANDISE IN CUSTOMS CUSTODY THAT IS TRANSPORTED
BY PIPELINE MAY BE ACCOUNTED FOR ON A QUANTITATIVE BASIS. THE
TERM "MERCHANDISE IN CUSTOMS CUSTODY," IS MEANT TO COMPRISE
BONDED MERCHANDISE (E.G., MERCHANDISE WHICH HAS NOT BEEN ENTERED
FOR CONSUMPTION, INCLUDING MERCHANDISE TRANSPORTED IN BOND,
MERCHANDISE FROM A CUSTOMS BONDED WAREHOUSE, OR MERCHANDISE FROM
A FOREIGN TRADE ZONE) (SEE LEGISLATIVE HISTORY FOR THIS PROVISION
IN H. REPORT 103-361, 103D CONG., 1ST SESS., PART 1, PP. 150-151,
AND S. REPORT 103-189, 103D CONG., 1ST SESS., PP. 97). SECTION
1553A PROVIDES FOR THE USE OF THE BILL OF LADING OR EQUIVALENT
DOCUMENT OF RECEIPT, ISSUED BY THE PIPELINE CARRIER TO THE
SHIPPER AND ACCEPTED BY THE CONSIGNEE, TO ACCOUNT FOR THE
QUANTITY OF MERCHANDISE TRANSPORTED AND TO MAINTAIN THE IDENTITY
OF THAT MERCHANDISE. UNLESS CUSTOMS HAS REASONABLE CAUSE TO
SUSPECT FRAUD, THE PROVISION AUTHORIZES CUSTOMS TO ACCEPT THE
BILL OF LADING, OR EQUIVALENT DOCUMENT OF RECEIPT, FOR THIS
PURPOSE. UNDER 1553A, THE SHIPPER, PIPELINE OPERATOR, AND
CONSIGNEE ARE SUBJECT TO THE RECORDKEEPING REQUIREMENTS OF 508
AND 509, TARIFF ACT OF 1930, AS AMENDED (19 U.S.C. 1508,1509).
THE BACKGROUND TO, AND REASONS FOR, THE ADDITION OF 1553A
TO THE CUSTOMS LAWS ARE EXPLAINED IN THE LEGISLATIVE HISTORY FOR
THE ACT (H. REPORT 103-361, IBID., AND S. REPORT 103-189, IBID.).
CURRENTLY, THERE IS NO PROVISION IN THE CUSTOMS LAWS OR
REGULATIONS GOVERNING THE TRANSPORTATION OF BONDED MERCHANDISE BY
PIPELINE. THE GENERAL PROVISIONS CURRENTLY GOVERNING
TRANSPORTATION IN BOND (ENTRY FOR IMMEDIATE TRANSPORTATION AND
ENTRY FOR TRANSPORTATION AND EXPORTATION; 552 AND 553, TARIFF
ACT OF 1930, AS AMENDED (19 U.S.C. 1552, 1553)) DO NOT AUTHORIZE
THE COMMINGLING OF BONDED MERCHANDISE WITH NON-BONDED MERCHANDISE
IN THE TRANSPORTATION. MOST MERCHANDISE TRANSPORTED BY PIPELINE
IS COMMINGLED AND IS SUSCEPTIBLE TO QUANTITATIVE ACCOUNTING
(SEE H. REPORT 103-189, IBID.). ANALOGOUS TO THE AMENDMENT TO
1557(A) (DISCUSSED BELOW), THE NEW PROVISION PERMITS THE
EFFECTIVE USE OF MODERN FUEL TRANSPORTATION SYSTEMS AND WILL
REDUCE ADMINISTRATIVE COSTS AND PAPER-WORK FOR THE INDUSTRY AND
THE GOVERNMENT.
UNDER THE AMENDMENT TO 1557(A), TURBINE FUEL MAY BE
WITHDRAWN FROM A CUSTOMS BONDED WAREHOUSE FOR USE UNDER
1309, TARIFF ACT OF 1930, AS AMENDED (19 U.S.C. 1309),
WITHOUT THE PAYMENT OF DUTY IF AN AMOUNT EQUAL TO THE QUANTITY
OF FUEL WITHDRAWN IS SHOWN TO BE USED WITHIN 30 DAYS OF
WITHDRAWAL. UNDER 1309, IN PART, ARTICLES MAY BE WITHDRAWN
FROM ANY CUSTOMS BONDED WAREHOUSE FREE OF DUTY FOR SUPPLIES OF
FOREIGN OR U.S. VESSELS OR AIRCRAFT ACTUALLY ENGAGED IN
FOREIGN TRADE OR TRADE BETWEEN THE U.S. AND ANY OF ITS
POSSESSIONS, OR BETWEEN HAWAII AND ANY OTHER PART OF THE U.S.
OR BETWEEN ALASKA AND ANY OTHER PART OF THE U.S. SECTION 1309
CONTAINS AN EXCEPTION UNDER WHICH THE PROVISIONS FOR FREE
WITHDRAWALS IN THAT ARE NOT APPLICABLE TO PETROLEUM PRODUCTS
FOR VESSELS OR AIRCRAFT IN VOYAGES OR FLIGHTS EXCLUSIVELY
BETWEEN HAWAII OR ALASKA AND ANY AIRPORT OR PACIFIC COAST
SEAPORT OF THE U.S.
UNDER THE AMENDED 1557(A), DUTIES ARE REQUIRED TO BE
DEPOSITED ON TURBINE FUEL WHICH WAS WITHDRAWN IN EXCESS OF THE
QUANTITY SHOWN TO HAVE BEEN USED UNDER 1309 DURING THE
30-DAY PERIOD FOLLOWING WITHDRAWAL OF THE FUEL. SUCH DUTIES
MUST BE DEPOSITED BY THE 40TH DAY AFTER THE DATE OF WITHDRAWAL
OF THE FUEL. INTEREST ON THE DUTIES IS PAYABLE FROM THE DATE
OF WITHDRAWAL.
THE BACKGROUND TO, AND REASONS FOR, THE AMENDMENT TO
1557(A) ARE EXPLAINED IN THE LEGISLATIVE HISTORY FOR THE ACT
(H.REPORT 103-361, IBID., AND S. REPORT 103-189, IBID.).
ACCORDING TO THESE REPORTS, THE NATURE OF MAJOR AIRPORT
FUELING SYSTEMS IS THAT DIFFERENT LOTS (BONDED, IMPORTED,
DOMESTIC, ETC.) OF TURBINE FUEL ARE COMMINGLED IN A COMMON
HYDRANT SYSTEM. UNDER THE LAW AND REGULATIONS BEFORE THE
AMENDMENT OF 1557(A), CUSTOMS CONSIDERED WITHDRAWAL OF FUEL
FROM STORAGE TANKS AT AIRPORTS INTO THE COMMON HYDRANT SYSTEM
AS WITHDRAWAL FROM BONDING. THEREFORE, IN ORDER SUCH FOR
BONDED FUEL TO QUALIFY FOR THE DUTY-FREE TREATMENT AUTHORIZED
UNDER 1309, CUSTOMS REQUIRED DAILY ACCOUNTING FOR THE
COMMINGLED BONDED FUEL.
ACCORDING TO THE INDUSTRY, IDENTIFYING THE TURBINE FUEL
WHICH IS USED UNDER FOR FLIGHTS QUALIFYING UNDER 1309 AND
THAT USED FOR NON-QUALIFYING FLIGHTS AT THE TIME THAT TURBINE
FUEL IS ENTERED INTO THE COMMON HYDRANT SYSTEM IS
IMPRACTICABLE AND, IF POSSIBLE, WOULD RESULT IN GREAT
ADMINISTRATIVE EXPENSE AND EXCESSIVE PAPERWORK.
ALTERNATIVELY, REQUIRING MULTIPLE HYDRANT SYSTEMS (FOR
DIFFERENT LOTS OF TURBINE FUEL) IS PHYSICALLY IMPRACTICABLE AT
MOST AIRPORTS AND WOULD ALSO RESULT IN GREAT EXPENSE.
ACCORDING TO THIS LEGISLATIVE HISTORY, THE AMENDMENT TO
1557(A) WILL PERMIT THE EFFECTIVE USE OF MODERN FUELING
SYSTEMS AT U.S. AIRPORTS. IT WILL ALSO PERMIT THE INTENDED
USE OF EXISTING LAW (I.E., 1309) PERMITTING THE DUTY-FREE
WITHDRAWAL OF SUPPLIES FOR QUALIFYING AIRCRAFT. FURTHER, IT
WILL SUBSTANTIALLY REDUCE ADMINISTRATIVE COSTS AND PAPERWORK
FOR THE INDUSTRY AND ADMINISTRATIVE COSTS FOR THE GOVERNMENT.
THE CUSTOMS REGULATIONS GENERALLY PERTAINING TO THE
TRANSPORTATION OF MERCHANDISE IN BOND ARE CURRENTLY FOUND IN
PART 18. THESE INTERIM REGULATIONS IMPLEMENT THE NEW 1553A
BY THE ADDITION TO PART 18 OF A NEW 18.31. GENERALLY, THIS
NEW 18.31 PROVIDES THAT MERCHANDISE MAY BE TRANSPORTED BY
PIPELINE UNDER THE PROCEDURES PROVIDED FOR IN PART 18, UNLESS
OTHERWISE SPECIFICALLY PROVIDED. THE NEW 18.31 PROVIDES FOR
THE ACCEPTANCE BY CUSTOMS OF A BILL OF LADING OR EQUIVALENT
DOCUMENT OF RECEIPT TO ACCOUNT FOR THE QUANTITY OF MERCHANDISE
TRANSPORTED AND TO MAINTAIN THE IDENTITY OF THE MERCHANDISE,
UNDER THE CIRCUMSTANCES PROVIDED IN THE STATUTE (I.E., THE
BILL OF LADING OR EQUIVALENT DOCUMENT OR RECEIPT MUST BE
ISSUED BY THE PIPELINE OPERATOR TO THE SHIPPER AND ACCEPTED BY
THE CONSIGNEE AND THERE MUST BE NO REASONABLE CAUSE FOR
CUSTOMS TO SUSPECT FRAUD).
BASICALLY, THE NEW 18.31 ADOPTS THE CURRENT PROCEDURES
FOR TRANSPORTATION IN BOND, IF APPLICABLE TO PIPELINE
TRANSPORTATION. THAT IS, GENERALLY, MERCHANDISE TO BE
TRANSPORTED IN BOND BETWEEN PORTS IN THE U.S. IS DELIVERED TO
A COMMON CARRIER, CONTRACT CARRIER, FREIGHT FORWARDER, OR
PRIVATE CARRIER BONDED FOR THAT PURPOSE. THE CARRIER PREPARES
AN IN-BOND DOCUMENT AND TAKES RECEIPT OF THE MERCHANDISE. THE
IN-BOND DOCUMENT (WHICH ALSO SERVES AS THE TRANSPORTATION
ENTRY OR WITHDRAWAL), WITH RECEIPT OF THE MERCHANDISE BY THE
CARRIER NOTED THEREON, TOGETHER WITH A CUSTOMS CONTROL CARD OR
CARNET, IS USED AS THE IN-BOND MANIFEST FOR THE MERCHANDISE TO
ITS PORT OF DESTINATION.
DELIVERY OF THE MERCHANDISE AT THE PORT OF DESTINATION IS
REQUIRED WITHIN 30 DAYS AFTER THE DATE OF RECEIPT BY THE
CARRIER AT THE PORT OF ORIGIN, OR 60 DAYS AFTER SUCH DATE IF
THE MERCHANDISE IS TRANSPORTED ON BOARD A VESSEL ENGAGED IN
THE COASTWISE TRADE (EXCEPT FOR TRANSIT AIR CARGO IN WHICH
CASE 10 DAYS IS GIVEN, UNDER 122.118). WITHIN 2 DAYS OF
ARRIVAL OF THE MERCHANDISE AT THE PORT OF DESTINATION, THE
DELIVERING CARRIER IS REQUIRED TO REPORT THE ARRIVAL TO
CUSTOMS BY SURRENDERING THE IN-BOND MANIFEST TO CUSTOMS AT
THAT PORT.
UNDER ITS BOND, THE INITIAL CARRIER IS RESPONSIBLE FOR
ANY SHORTAGE, IRREGULAR DELIVERY, OR NONDELIVERY AT THE PORT
OF DESTINATION OR EXPORTATION. SPECIFIC PROVISION IS MADE FOR
TRANSSHIPMENT TO ONE OR MORE OTHER CONVEYANCES, DIVERSION TO A
DIFFERENT PORT, THE DIFFERENT KINDS OF TRANSPORTATION ENTRY OR
WITHDRAWAL WHICH MAY BE MADE (I.E., FOR IMMEDIATE
TRANSPORTATION, EXPORTATION, AND TRANSPORTATION AND
EXPORTATION), CHANGE OF THE FOREIGN DESTINATION OF MERCHANDISE
ENTERED OR WITHDRAWN FOR TRANSPORTATION AND EXPORTATION,
RETENTION OF MERCHANDISE ON THE DOCK, AND THE SPLITTING UP OF
A SHIPMENT OF MERCHANDISE FOR EXPORTATION.
IN ADDITION TO THESE GENERAL REQUIREMENTS, THE NEW
18.31 PROVIDES FOR THE INCLUSION OF THE BILL OF LADING OR
EQUIVALENT DOCUMENT OF RECEIPT WITH THE CUSTOMS IN-BOND
DOCUMENT FOR MERCHANDISE TO BE TRANSPORTED IN BOND BY
PIPELINE. PROVIDED THAT THERE ARE NO DISCREPANCIES BETWEEN
THE BILL OF LADING OR EQUIVALENT DOCUMENT OF RECEIPT AND THE
OTHER DOCUMENTS MAKING UP THE IN-BOND MANIFEST FOR THE
MERCHANDISE, AND PROVIDED THAT CUSTOMS HAS NO REASONABLE CAUSE
TO SUSPECT FRAUD, THE BILL OF LADING OR EQUIVALENT DOCUMENT OF
RECEIPT IS TO BE ACCEPTED BY CUSTOMS AT THE PORT OF
DESTINATION OR EXPORTATION AS ESTABLISHING THE QUANTITY AND
IDENTITY OF THE MERCHANDISE TRANSPORTED.
IN CASES IN WHICH THE INITIAL CARRIER TRANSFERS OR
TRANSSHIPS MERCHANDISE TO ANOTHER CONVEYANCE OR CARRIER, THE
NEW 18.31 GENERALLY ADOPTS THE PROCEDURES IN THE CURRENT
PROVISION FOR TRANSSHIPMENT ( 18.3). BASICALLY, THOSE
PROCEDURES REQUIRE THE IN-BOND DOCUMENT ACCOMPANYING THE
MERCHANDISE TO BE PRESENTED TO CUSTOMS AT THE PLACE OF
TRANSSHIPMENT FOR EXECUTION OF A CERTIFICATE OF TRANSFER ON
THE DOCUMENT. THE NOTATED DOCUMENT THEN ACCOMPANIES THE
MERCHANDISE TO ITS PORT OF DESTINATION OR EXPORTATION. IF THE
MERCHANDISE IS TO BE TRANSSHIPPED TO MORE THAN ONE CONVEYANCE,
ADDITIONAL COPIES OF THE IN-BOND DOCUMENT ARE REQUIRED.
IN ADDITION TO THESE PROCEDURES, THE NEW 18.31
PROVIDES, IF A PIPELINE IS THE INITIAL CARRIER, FOR DELIVERY
OF A COPY OF THE BILL OF LADING OR EQUIVALENT DOCUMENT OF
RECEIPT TO THE PERSON IN CHARGEOF THE CONVEYANCE TO WHICH THE
MERCHANDISE IS TRANSFERRED AND IF THE MERCHANDISE IS
TRANSFERRED TO MORE THAN ONE CONVEYANCE, TO THE PERSON IN
CHARGE OF EACH OF THE CONVEYANCES. IF THE INITIAL CARRIER IS
NOT A PIPELINE, THE NEW 18.31 PROVIDES FOR THE PRESENTATION
TO CUSTOMS AT THE PLACE OF TRANSSHIPMENT OF A BILL OF LADING
OR EQUIVALENT DOCUMENT OF RECEIPT ISSUED BY THE PIPELINE
OPERATOR TO THE SHIPPER ALONG WITH THE IN-BOND DOCUMENT
ACCOMPANYING THE MERCHANDISE. THE BILL OF LADING OR
EQUIVALENT DOCUMENT OF RECEIPT AND THE IN-BOND DOCUMENT
ARE TO BE EXECUTED WITH THE CERTIFICATE OF TRANSFER.
THE NEW 18.31 ALSO MAKES IT CLEAR THAT THE INITIAL
CARRIER IS RESPONSIBLE FOR ANY DISCREPANCIES, INCLUDING
SHORTAGES, IRREGULAR DELIVERIES, OR NONDELIVERIES AT THE PORT
OF DESTINATION OR EXPORTATION, AS IS CURRENTLY PROVIDED IN
PART 18 (SEE 18.8). AS PROVIDED IN 1553A, THE NEW 18.31
PROVIDES THAT THE SHIPPER, PIPELINE OPERATOR, AND CONSIGNEE
ARE SUBJECT TO THE RECORDKEEPING REQUIREMENTS IN 1508 AND
1509, AS PROVIDED IN 19 CFR PART 162.
TO MAKE IT CLEAR TO THE PUBLIC THAT THE CUSTOMS
REGULATIONS PERTAINING TO TRANSPORTATION IN BOND APPLY TO
TRANSPORTATION BY PIPELINE, THE DEFINITION OF "COMMON CARRIER"
IN 18.1(A)(1) IS AMENDED TO SPECIFICALLY INCLUDE A COMMON
CARRIER OF MERCHANDISE OWNING OR OPERATING A PIPELINE.
THE CUSTOMS REGULATIONS PERTAINING TO THE WITHDRAWAL OF
MERCHANDISE FROM A CUSTOMS BONDED WAREHOUSE ARE FOUND IN PART
144. UNDER 144.35, THE WITHDRAWAL FROM WAREHOUSE OF
SUPPLIES AND EQUIPMENT FOR VESSELS AND AIRCRAFT ARE PROVIDED
FOR IN SUBPART D OF PART 144 AND 10.59 THROUGH 10.65. THE
LATTER CONTAIN SPECIFIC PROVISIONS ON THE DUTY-FREE TREATMENT
OF SUPPLIES FOR FOREIGN OR U.S. VESSELS AND AIRCRAFT ACTUALLY
ENGAGED IN FOREIGN TRADE UNDER 1309. PURSUANT TO
10.59(D), ALTHOUGH THE PROVISIONS IN 10.59 THROUGH 10.64
ARE WRITTEN IN TERMS OF VESSELS, THEY ARE MADE APPLICABLE TO
AIRCRAFT INSOFAR AS THEY MAY BE SO APPLICABLE. SPECIFIC
PROVISIONS FOR THE WITHDRAWAL OF FUEL AS SUPPLIES UNDER 1309
FOR VESSELS (OR AIRCRAFT, UNDER 10.59(D), SEE ABOVE) ARE
PROVIDED IN 10.62.
THESE INTERIM REGULATIONS IMPLEMENT THE AMENDMENT TO
1557(A) BY THE ADDITION OF A NEW 10.62B TO PART 10. UNDER
THE NEW 10.62B, TURBINE FUEL INTENDED FOR USE AS SUPPLIES ON
AIRCRAFT UNDER 1309 WHICH IS WITHDRAWN FROM A CUSTOMS BONDED
WAREHOUSE IS ENTITLED TO DUTY-FREE TREATMENT UNDER 1309 IF
AN AMOUNT EQUAL TO OR EXCEEDING THE QUANTITY OF SUCH FUEL IS
SATISFACTORILY ESTABLISHED TO HAVE BEEN USED ON AIRCRAFT
QUALIFYING FOR DUTY-FREE TREATMENT UNDER 1309 WITHIN 30 DAYS
AFTER THE WITHDRAWAL OF THE FUEL FROM THE CUSTOMS BONDED
WAREHOUSE. FOR THE PROCEDURES FOR SUCH WITHDRAWALS, 10.62B
ADOPTS THE PROCEDURES NOW PROVIDED IN 10.59 THROUGH 10.65.
SECTION 10.62B PROVIDES THAT THE CUSTOMS FORM 7506 USED FOR
THE WITHDRAWAL SHALL BE ANNOTATED TO SHOW THAT THE WITHDRAWAL
IS UNDER THAT PROVISION.
IF LESS FUEL THAN WAS WITHDRAWN IS USED WITHIN 30 DAYS OF
WITHDRAWAL ON QUALIFYING AIRCRAFT, A WITHDRAWAL FOR
CONSUMPTION AND DUTIES FOR THE EXCESS OF FUEL WITHDRAWN OVER
THAT USED ON QUALIFYING AIRCRAFT ARE REQUIRED. THE WITHDRAWAL
FOR CONSUMPTION AND DUTIES, WITH INTEREST, ARE REQUIRED TO BE
DEPOSITED BY THE 40TH DAY AFTER THE DATE OF WITHDRAWAL OF THE
FUEL. INTEREST IS CALCULATED FROM THE DATE OF WITHDRAWAL AT
THE RATE OF INTEREST ESTABLISHED UNDER 26 U.S.C. 6621.
THE NEW 10.62B PROVIDES FOR TWO ALTERNATIVE WAYS OF
ESTABLISHING USE BY QUALIFYING AIRCRAFT OF THE FUEL WHICH IS
NOT ENTERED AND ON WHICH DUTIES ARE NOT PAID. EACH
ALTERNATIVE REQUIRES A SUBMISSION TO CUSTOMS BY THE 40TH DAY
AFTER THE DAY OF WITHDRAWAL OF THE FUEL. IN THE FIRST
ALTERNATIVE, THE PERSON WITHDRAWING THE AIRCRAFT TURBINE FUEL
IS REQUIRED TO SUBMIT RECORDS PREPARED IN THE NORMAL COURSE OF
BUSINESS EFFECTING THE TRANSFER OF THE FUEL WHICH IS NOT
ENTERED AND ON WHICH DUTIES ARE NOT PAID TO AIRCRAFT (E.G.,
"UPLIFT" OR REFUELING TICKETS) AND OBJECTIVE EVIDENCE THAT THE
AIRCRAFT TO WHICH THE FUEL WAS TRANSFERRED WERE ACTUALLY USED
IN TRADE QUALIFYING FOR THE PRIVILEGES PROVIDED IN 1309. IN
THE SECOND ALTERNATIVE, THE PERSON WITHDRAWING THE AIRCRAFT
TURBINE FUEL FILES A CERTIFICATE (DOCUMENTARY OR ELECTRONIC)
CERTIFYING THE INTENDED USE UNDER 1309 OF ALL OF THE FUEL
WITHDRAWN, THE TRANSFERRING TO QUALIFYING AIRCRAFT WITHIN 30
DAYS OF THE DAY OF WITHDRAWAL FROM WAREHOUSE OF ALL OF THE
FUEL WITHDRAWN WHICH IS NOT ENTERED AND ON WHICH DUTIES ARE
NOT PAID, THE USE OF ALL OF THE AIRCRAFT ONTO WHICH THE FUEL
WHICH IS NOT ENTERED AND ON WHICH DUTIES ARE NOT PAID WAS
UPLIFTED IN A TRADE QUALIFYING FOR 1309-TREATMENT, AND THAT
THE PERSON MAKING THE CERTIFICATION HAS EVIDENCE SUPPORTING
EACH OF THESE STATEMENTS. UNDER THE SECOND ALTERNATIVE, THE
PERSON MAKING THE CERTIFICATE MUST PROVIDE EVIDENCE SUPPORTING
ITS CLAIM UPON REQUEST BY CUSTOMS.
THE NEW 10.62B PROVIDES FOR LIQUIDATED DAMAGES AGAINST
THE PERSON WITHDRAWING TURBINE FUEL UNDER THE , UNDER THE
PROVISIONS OF 113.62, FOR FAILURE TO ACCOUNT FOR SUCH
TURBINE FUEL. FAILURE TO ACCOUNT FOR SUCH TURBINE FUEL
INCLUDES: (1) THE FAILURE TO MAKE ENTRY AND PAY APPLICABLE
DUTY, WITH INTEREST, ON THE QUANTITY OF FUEL WITHDRAWN BUT NOT
ESTABLISHED TO HAVE BEEN USED ON QUALIFYING AIRCRAFT WITHIN 30
DAYS OF WITHDRAWAL; OR (2) THE FAILURE TO FILE THE EVIDENCE OR
CERTIFICATE, PROVIDED FOR IN THE , ESTABLISHING SUCH USE OF
THE FUEL WHICH IS NOT ENTERED AND ON WHICH DUTIES ARE NOT
PAID.
THE NEW 10.62B PROVIDES THAT "BLANKET" WITHDRAWALS MAY
NOT BE USED FOR WITHDRAWALS UNDER THAT PROVISION. UNDER A
BLANKET WITHDRAWAL, ALL OR PART OF THE MERCHANDISE ENTERED
INTO A WAREHOUSE MAY BE WITHDRAWN, AT DIFFERENT TIMES IF
DESIRED, WITHOUT FURTHER CUSTOMS APPROVAL (I.E., AFTER
APPROVAL OF THE BLANKET PERMIT) (SEE 19 CFR 19.6; SEE ALSO
10.62(A), UNDER WHICH MONTHLY BLANKET WITHDRAWALS FOR
WITHDRAWALS OF FUEL FOR VESSELS (OR AIRCRAFT) FOR DUTY-FREE
USE UNDER 1309 ARE PERMITTED). BLANKET OR MONTHLY
WITHDRAWALS ARE NOT PERMITTED UNDER THE NEW 10.62B BECAUSE
OF THE REQUIREMENT IN THE AMENDED 1557(A) FOR USE ON
QUALIFYING AIRCRAFT WITHIN 30 DAYS OF WITHDRAWAL (I.E.,
BECAUSE OF THE REQUIREMENT FOR CERTAINTY OF THE
TIME OF WITHDRAWAL).
THE NEW 10.62B PROVIDES THAT THE PERSON WITHDRAWING
AIRCRAFT TURBINE FUEL FROM WAREHOUSE UNDER THE PROVISION IS
SUBJECT TO THE RECORDKEEPING REQUIREMENTS IN 1508 AND 1509,
AS PROVIDED FOR IN PART 162.
CONFORMING AMENDMENTS ARE MADE TO THE GENERAL PROVISIONS
FOR WITHDRAWAL UNDER 1309 IN 10.60 AND 10.62. IN THE
CASE OF THE AMENDMENT TO 10.60, THE AMENDMENT MAKES IT CLEAR
THAT THE GENERAL REQUIREMENT THAT SUPPLIES TO BE USED AT A
PORT OTHER THAN THE PORT OF WITHDRAWAL FROM WAREHOUSE MUST BE
WITHDRAWN ON A WITHDRAWAL FOR TRANSPORTATION IN BOND IS
INAPPLICABLE IN THE CASE OF WITHDRAWALS UNDER THE NEW
10.62B. IN THE CASE OF THE AMENDMENT TO 10.62, THE
AMENDMENT ALERTS THE PUBLIC THAT THERE IS AN ALTERNATIVE
PROVISION FOR AIRCRAFT TURBINE FUEL WITHDRAWN FROM WAREHOUSE,
PROVIDED IN 10.62B, TO THE GENERAL PROCEDURES AND
REQUIREMENTS FOR WITHDRAWAL OF BUNKER FUEL UNDER 1309. THE
INTERIM REGULATION ALSO PROMULGATES BY REGULATION, IN THE NEW
10.62B, A POSITION TAKEN BY CUSTOMS IN INTERPRETATIVE
RULINGS REGARDING THE COMMINGLING IN A SINGLE HYDRANT FUELING
SYSTEM OF BONDED AIRCRAFT TURBINE FUEL (E.G., SUCH FUEL
TRANSPORTED IN BOND, FROM A CUSTOMS BONDED WAREHOUSE, OR FROM
A FOREIGN TRADE ZONE) WITH DOMESTIC FUEL OR FUEL IN OTHER
BONDED CATEGORIES WHEN THE BONDED FUEL IS INTENDED FOR USE
UNDER 1309. GENERALLY, UNDER THESE RULINGS, DATED OCTOBER
20, 1989 (FILE: 221483), MAY 8, 1990 (FILE: 222258), APRIL
29, 1991 (FILE: 222914), OCTOBER 15, 1991 (FILE: 223268), AND
JANUARY 10, 1994 (FILE: 224628), CUSTOMS PERMITTED SUCH
COMMINGLING IF TWO BASIC CONDITIONS WERE MET. THE FIRST OF
THESE CONDITIONS WAS THAT THE HYDRANT SYSTEM MUST BE
PHYSICALLY CONFIGURED SO THAT BONDED FUEL ONCE INTRODUCED OR
COMMINGLED INTO THE SINGLE HYDRANT SYSTEM COULD NOT BE REMOVED
OTHERWISE THAN BY BEING PUMPED INTO AIRCRAFT. THE SECOND OF
THESE CONDITIONS WAS THAT THE COMMINGLED FUEL MUST BE
ACCOUNTED FOR ON THE BASIS OF A 24-HOUR ACCOUNTING PERIOD
(I.E., ENTRY MUST BE MADE AND DUTY PAID FOR ANY QUANTITY OF
BONDED FUEL WHICH IS INTRODUCED INTO THE HYDRANT SYSTEM WHEN A
LIKE QUANTITY IS NOT LOADED ON AIRCRAFT QUALIFYING FOR
DUTY-FREE TREATMENT UNDER 1309 WITHIN 24 HOURS OF THE
INTRODUCTION OF THE BONDED FUEL INTO THE HYDRANT SYSTEM). THE
RULINGS HELD THAT THE REQUIREMENT FOR ACCOUNTING ON THE BASIS
OF A 24-HOUR PERIOD MEANT THAT FUEL INTRODUCED OR COMMINGLED
INTO THE SINGLE HYDRANT SYSTEM MUST BE LOADED ONTO A
QUALIFYING AIRCRAFT IN THE SAME 24-HOUR PERIOD (DEFINED AS A
24 HOUR PERIOD BEGINNING AT 12:01 A.M. AND ENDING AT 12:00
MIDNIGHT). THE LEGISLATIVE HISTORY FOR THE AMENDMENT TO
1557(A), DESCRIBED ABOVE, RECOGNIZED AND CONFIRMED THE
FOREGOING CUSTOMS INTERPRETATIONS OF THE THEN APPLICABLE LAW
AND REGULATIONS.
AS STATED ABOVE, THE POSITION TAKEN IN THESE RULINGS IS
IMPLEMENTED IN THE NEW 10.62B. PARAGRAPH (A) OF THAT
CONTAINS A PROVISION MAKING THE POSITION TAKEN IN THESE
RULINGS THE GENERAL RULE. THAT IS, PARAGRAPH (A) PROVIDES
THAT, UNLESS OTHERWISE PROVIDED (THE PROVISION FOR WITHDRAWAL
FROM WAREHOUSE UNDER THE AMENDED 1557(A) DOES, OF COURSE,
OTHERWISE PROVIDE), BONDED AIRCRAFT TURBINE FUEL (I.E., SUCH
FUEL TRANSPORTED IN BOND, FROM A CUSTOMS BONDED WAREHOUSE, OR
FROM A FOREIGN TRADE ZONE) MAY BE COMMINGLED WITH DOMESTIC
AIRCRAFT TURBINE FUEL OR SUCH FUEL IN ANY DIFFERENT CUSTOMS
BONDED CATEGORY (E.G., FUEL TRANSPORTED IN BOND COMMINGLED
WITH DOMESTIC FUEL, FUEL FROM A CUSTOMS BONDED WAREHOUSE, OR
FUEL FROM A FOREIGN TRADE ZONE) ONLY UPON APPROVAL BY THE
APPROPRIATE DISTRICT DIRECTOR OF CUSTOMS. (FOR PURPOSES OF
THIS PROVISION, LOTS OF FUEL FROM A FOREIGN TRADE ZONE IN
DIFFERENT FOREIGN TRADE ZONE STATUS (I.E., PRIVILEGED-FOREIGN,
NON-PRIVILEGED-FOREIGN, DOMESTIC, OR ZONE-RESTRICTED STATUS)
ARE CONSIDERED TO BE FUEL IN DIFFERENT CUSTOMS BONDED
CATEGORIES FOR WHICH CUSTOMS APPROVAL OF COMMINGLING IS
REQUIRED.) PARAGRAPH (A) OF 10.62B PROVIDES THAT SUCH
COMMINGLING SHALL BE TREATED AS A WITHDRAWAL OR REMOVAL FROM
CUSTOMS CUSTODY OF THE FUEL. THUS, CUSTOMS APPROVAL FOR THE
COMMINGLING MAY BE OBTAINED UNDER THE APPROPRIATE PROVISIONS
IN THE CUSTOMS REGULATIONS RELATING TO TRANSPORTATION IN BOND
( 18.8), BONDED WAREHOUSES (SUBPART D OF PART 144), AND
FOREIGN TRADE ZONES (SUBPART F OF PART 146).
UNDER PARAGRAPH (A) OF 10.62B, THE DISTRICT DIRECTOR
MAY APPROVE SUCH COMMINGLING IF THE FUELING SYSTEM IN WHICH
THE COMMINGLING OCCURS CONTAINS PHYSICAL SAFEGUARDS PREVENTING
THE POSSIBLE UNAUTHORIZED ENTRY INTO THE CUSTOMS TERRITORY OF
THE FUEL. THE COMMINGLED FUEL MUST BE ACCOUNTED FOR IN THE
SAME 24-HOUR PERIOD IN WHICH IT WAS COMMINGLED AND MUST BE
EXPORTED OR USED UNDER 1309 WITHIN THAT 24-HOUR PERIOD OR
ENTERED OR WITHDRAWN FOR CONSUMPTION, WITH DUTY DEPOSITED, AS
REQUIRED UNDER THE APPROPRIATE REGULATIONS (UNDER PART 18,
141, 144, OR 146, AS APPLICABLE). AS NOTED ABOVE, THE
SPECIFIC PROVISION FOR THE DUTY-FREE WITHDRAWAL OF AIRCRAFT
TURBINE FUEL FROM A CUSTOMS BONDED WAREHOUSE IF THE FUEL IS
USED ON AN AIRCRAFT QUALIFYING FOR DUTY-FREE TREATMENT UNDER
1309, PROVIDED FOR IN THE AMENDMENT TO 1557(A) AND
PARAGRAPHS (B) THROUGH (F) OF 10.62B, IS AN EXCEPTION FROM
THE ABOVE-DESCRIBED GENERAL RULE FOR THE COMMINGLING OF BONDED
AIRCRAFT TURBINE FUEL.

DELAYED EFFECTIVE DATE AND PUBLIC COMMENT
REQUIREMENTS
THE AGENCY INTENDS THAT THESE INTERIM REGULATIONS BECOME
EFFECTIVE ON THE 45TH DAY FOLLOWING THE DATE OF PUBLICATION,
I.E., 15 DAYS AFTER THE CLOSE OF THE COMMENT PERIOD. THE
AGENCY BELIEVES IT HAS GOOD CAUSE UNDER 5 U.S.C. 553(D)(1) AND
(3) OF THE ADMINISTRATIVE PROCEDURE ACT (APA) (5 U.S.C. 553)
TO PROMULGATE INTERIM REGULATIONS BECAUSE THE REGULATIONS
PROVIDE AN IMMEDIATE BENEFIT TO BOTH THE GOVERNMENT AND THE
PUBLIC BY REDUCING ADMINISTRATIVE COSTS AND PAPERWORK PURSUANT
TO SPECIFIC STATUTORY AUTHORITY. THESE INTERIM REGULATIONS
ARE INTENDED TO IMPLEMENT CONGRESSIONAL INTENT EMBODIED IN
1553A AND 1557(A) AND SPECIFICALLY STATED IN THE
LEGISLATIVE HISTORY TO THOSE PROVISIONS, AS DESCRIBED IN THE
BACKGROUND. FURTHERMORE, EXISTING RIGHTS AND OBLIGATIONS ARE
NOT CHANGED OTHERWISE THAN AS AUTHORIZED BY THE NEW STATUTORY
PROVISIONS. THE AGENCY BELIEVES THAT THE EFFECTED PUBLIC WANTS
THESE NEW STATUTORY PROVISIONS TO BECOME EFFECTIVE AS SOON AS
POSSIBLE SO THAT THE PUBLIC CAN BENEFIT FROM THE EFFICIENCIES
AND SAVINGS RESULTING THEREFROM. IN ADDITION, THE AGENCY DOES
NOT BELIEVE THE PUBLIC NEEDS TIME TO CONFORM ITS CONDUCT SO AS
TO AVOID VIOLATION OF THESE REGULATIONS (I.E., BECAUSE THE NEW
PROVISIONS ARE PERMISSIVE, NOT RESTRICTIVE). THE DUE AND
TIMELY EXECUTION OF THE AGENCY'S RESPONSIBILITIES WOULD BE
UNNECESSARILY IMPEDED BY A TIME CONSUMING NOTICE AND COMMENT
PERIOD. THE AGENCY BELIEVES SUCH DELAY IS UNNECESSARY BECAUSE
IT DOES NOT EXPECT THE PUBLIC TO OBJECT TO THE REGULATIONS
BEING PROMULGATED AS THEY MERELY PROVIDE THE RELIEF THAT
CONGRESS INTENDED.
EVEN THOUGH, BASED ON THE DISCUSSION SET FORTH ABOVE,
CUSTOMS BELIEVES THE AMENDMENTS IN THIS DOCUMENT MAY BE
PROMULGATED ON AN INTERIM BASIS AND COULD BE EFFECTIVE
IMMEDIATELY, CUSTOMS IS PROVIDING A 45-DELAYED EFFECTIVE DATE,
WITH A 30-DAY COMMENT PERIOD PRECEDING THAT EFFECTIVE DATE.
THIS REPRESENTS A PRACTICAL COMPROMISE BETWEEN THE NEED FOR
TEMPORAL URGENCY AND THE DESIRABILITY FOR PUBLIC PARTICIPATION
IN THE RULEMAKING PROCESS.
IN THE SPIRIT OF THE APA, THE AGENCY IS SOLICITING PUBLIC
COMMENT REGARDING ITS DECISION TO PROMULGATE THESE INTERIM
REGULATIONS AND IN DELAYING THEIR EFFECTIVE DATE ONLY FOR THAT
PERIOD OF TIME NECESSARY TO REVIEW ANY RELEVANT COMMENTS
REGARDING THAT DECISION. UNLESS THE COMMENTS SHOW THAT THERE
EXISTS GOOD CAUSE FOR NOT MAKING THE REGULATIONS EFFECTIVE ON
AN INTERIM BASIS, THE REGULATIONS WILL BECOME EFFECTIVE ON AN
INTERIM BASIS ON THE 45TH DAY FOLLOWING THE DATE OF
PUBLICATION.

COMMENTS
CONSEQUENTLY, THE AGENCY HEREBY SOLICITS COMMENTS ON BOTH
THE SUBSTANCE OF THESE REGULATIONS AND THEIR INTENDED
EFFECTIVE DATE. THE COMMENTS SHOULD CLEARLY STATE WHETHER
THEY ADDRESS THE SUBSTANCE OF THE INTERIM RULE OR THE AGENCY'S
DETERMINATION TO MAKE THE RULE EFFECTIVE ON AN INTERIM BASIS.
IF, BASED ON THE COMMENTS, GOOD CAUSE IS SHOWN THAT THE
REGULATIONS SHOULD NOT BECOME EFFECTIVE ON AN INTERIM BASIS, A
DOCUMENT WILL BE ISSUED WITHDRAWING THE INTERIM REGULATIONS
BEFORE THEIR EFFECTIVE DATE. IF NO SUCH GOOD CAUSE IS SHOWN,
THE INTERIM REGULATIONS WILL GO INTO EFFECTIVE. THE AGENCY
WILL THEN BE ABLE TO GAIN EXPERIENCE WITH THE INTERIM
REGULATION, FULLY CONSIDER SUBSTANTIVE COMMENTS,
AND DECIDE WHETHER THE INTERIM REGULATION NEEDS AMENDMENT
BEFORE ITS PROMULGATION AS A FINAL RULE.
CONSIDERATION WILL BE GIVEN TO ANY WRITTEN COMMENTS
(PREFERABLY IN TRIPLICATE) THAT ARE TIMELY SUBMITTED TO
CUSTOMS. ALL SUCH COMMENTS RECEIVED FROM THE PUBLIC PURSUANT
TO THIS NOTICE OF RULEMAKING WILL BE AVAILABLE FOR PUBLIC
INSPECTION IN ACCORDANCE WITH THE FREEDOM OF INFORMATION ACT
(5 U.S.C. 552), 1.4, TREASURY DEPARTMENT REGULATIONS (31 CFR
1.4), AND 103.11(B), CUSTOMS REGULATIONS (19 CFR 103.11(B)),
DURING REGULAR BUSINESS DAYS BETWEEN THE HOURS OF 9:00 A.M.
AND 4:30 P.M. AT THE REGULATIONS BRANCH, 1099 14TH STREET,
NW., SUITE 4000, WASHINGTON, D.C.

REGULATORY FLEXIBILITY ACT AND EXECUTIVE ORDER 12866

SINCE THIS DOCUMENTS IS NOT SUBJECT TO THE NOTICE AND
PUBLIC PROCEDURE REQUIREMENTS OF 5 U.S.C. 553, IT IS NOT
SUBJECT TO THE PROVISIONS OF THE REGULATORY FLEXIBILITY ACT
(5 U.S.C. 601 ET SEQ.). THIS DOCUMENT IS NOT A "SIGNIFICANT
REGULATORY ACTION" UNDER E.O. 12866.

PAPERWORK REDUCTION ACT
________________________

DRAFTING INFORMATION
THE PRINCIPAL AUTHOR OF THIS DOCUMENT WAS ______________,
REGULATIONS BRANCH, U.S. CUSTOMS SERVICE. HOWEVER, PERSONNEL
FROM OTHER OFFICES PARTICIPATED IN ITS DEVELOPMENT.

LIST OF SUBJECTS
19 CFR PART 10
___________________
19 CFR PART 18
___________________
AMENDMENTS
TITLE 19, CHAPTER I, PARTS 10 AND 18 OF THE CUSTOMS
REGULATIONS (19 CFR PARTS 10 AND 18) IS AMENDED AS SET FORTH
BELOW:
PART 10 - ARTICLES CONDITIONALLY FREE,
SUBJECT TO A REDUCED RATE, ETC.
1. THE GENERAL AUTHORITY FOR PART 10 CONTINUES TO READ AS
FOLLOWS, AND SPECIFIC AUTHORITY, FOR NEW 10.62B, IS ADDED AS
FOLLOWS:
AUTHORITY: 19 U.S.C. 66, 1202, 1321, 1481, 1498, 1508, 1623,
1624;

10.62B ALSO ISSUED UNDER 19 U.S.C. 1557;

2. SECTION 10.60 IS AMENDED BY REVISING THE FIRST SENTENCE OF
PARAGRAPH (D) TO READ AS FOLLOWS:
10.60 FORMS OF WITHDRAWALS; BOND.

(D) EXCEPT AS OTHERWISE PROVIDED IN 10.62B, RELATING
TO WITHDRAWALS FROM WAREHOUSE OF AIRCRAFT TURBINE FUEL TO BE
USED WITHIN 30 DAYS OF SUCH WITHDRAWAL AS SUPPLIES ON AIRCRAFT
UNDER 309, TARIFF ACT OF 1930, AS AMENDED, WHEN THE SUPPLIES
ARE TO BE LADEN AT A PORT OTHER THAN THE PORT OF WITHDRAWAL
FROM WAREHOUSE, THEY SHALL BE WITHDRAWN FOR TRANSPORTATION IN
BOND TO THE PORT OF LADING.

3. SECTION 10.62 IS AMENDED BY REVISING THE FIRST SENTENCE OF
PARAGRAPH (A) TO READ AS FOLLOWS:
10.62 BUNKER FUEL OIL.
(A) WITHDRAWAL UNDER 309, TARIFF ACT OF 1930, AS
AMENDED.
EXCEPT AS OTHERWISE PROVIDED IN 10.62B, RELATING TO
WITHDRAWALS FROM WAREHOUSE OF AIRCRAFT TURBINE FUEL TO BE USED
WITHIN 30 DAYS OF SUCH WITHDRAWAL AS SUPPLIES ON AIRCRAFT
UNDER 309, TARIFF ACT OF 1930, AS AMENDED, WHEN ALL THE
BUNKER FUEL OIL IN A CUSTOMS BONDED TANK IS INTENDED ONLY FOR
LADING DUTY FREE AS SUPPLIES ON VESSELS UNDER 309 AT THE
PORT WHERE THE TANK IS LOCATED, DELIVERY OF THE OIL, BY
CUSTOMS BONDED CARRIER, CARTMAN, OR LIGHTERMAN (INCLUDING
BONDED PIPELINES), UNDER WITHDRAWALS ON CUSTOMS FORM 7506,
EITHER SINGLE OR MONTHLY (BLANKET), MAY BE MADE WITHOUT THE
PRESENCE OF A CUSTOMS OFFICER.

4. SECTION 10.62B IS ADDED TO READ AS FOLLOWS:
10.62B AIRCRAFT TURBINE FUEL.
(A) GENERAL. UNLESS OTHERWISE PROVIDED, AIRCRAFT
TURBINE FUEL TRANSPORTED IN BOND UNDER PART 18 OF THIS CHAPTER
OR IN A CUSTOMS BONDED WAREHOUSE OR A FOREIGN TRADE ZONE MAY
BE COMMINGLED WITH DOMESTIC AIRCRAFT TURBINE FUEL OR AIRCRAFT
TURBINE FUEL IN ANY DIFFERENT CUSTOMS BONDED CATEGORY (E.G.,
FUEL TRANSPORTED IN BOND COMMINGLED WITH DOMESTIC FUEL, FUEL
FROM A CUSTOMS BONDED WAREHOUSE, OR FUEL FROM A FOREIGN TRADE
ZONE, WITH EACH FOREIGN TRADE ZONE STATUS TREATED AS A
DIFFERENT CUSTOMS BONDED CATEGORY) ONLY IF SUCH COMMINGLING IS
APPROVED BY THE DISTRICT DIRECTOR OF CUSTOMS FOR THE PORT
WHERE THE COMMINGLING OCCURS. SUCH COMMINGLING SHALL BE
TREATED AS A WITHDRAWAL OR REMOVAL FROM CUSTOMS CUSTODY OF THE
BONDED FUEL. THE DISTRICT DIRECTOR MAY APPROVE SUCH
COMMINGLING IF THE FUELING SYSTEM IN WHICH THE COMMINGLING
WILL OCCUR CONTAINS ADEQUATE PHYSICAL SAFEGUARDS TO PREVENT
THE POSSIBLE UNAUTHORIZED ENTRY INTO THE CUSTOMS TERRITORY OF
THE BONDED FUEL. SUCH COMMINGLED FUEL MUST BE ACCOUNTED FOR
IN THE SAME 24-HOUR PERIOD IN WHICH IT WAS COMMINGLED AND MUST
BE-- (1) EXPORTED WITHIN THAT 24-HOUR PERIOD;
(2) USED UNDER 309, TARIFF ACT OF 1930, AS
AMENDED, WITHIN THAT 24-HOUR PERIOD; OR
(3) ENTERED OR WITHDRAWN FOR CONSUMPTION, WITH DUTY
DEPOSITED, AS REQUIRED UNDER THE REGULATIONS FOR MERCHANDISE
IN THAT CATEGORY (UNDER PART 18, 141, 144, OR 146 OF THIS
CHAPTER, AS APPROPRIATE).
(B) DUTY-FREE WITHDRAWAL FROM WAREHOUSE OF AIRCRAFT
TURBINE FUEL UNDER 557(A), TARIFF ACT OF 1930, AS AMENDED.
TURBINE FUEL INTENDED FOR USE AS SUPPLIES ON AIRCRAFT UNDER
309, TARIFF ACT OF 1930, AS AMENDED, AND WITHDRAWN FROM A
CUSTOMS BONDED WAREHOUSE SHALL BE ENTITLED TO PRIVILEGES
PROVIDED FOR IN 309, TARIFF ACT OF 1930, AS AMENDED, IF AN
AMOUNT EQUAL TO OR EXCEEDING THE QUANTITY OF SUCH FUEL IS
ESTABLISHED, AS PROVIDED FOR IN PARAGRAPH (D) OF THIS , TO
HAVE BEEN USED ON AIRCRAFT QUALIFYING FOR THE PRIVILEGES
PROVIDED FOR IN 309 WITHIN 30 DAYS AFTER THE WITHDRAWAL OF
THE FUEL FROM THE CUSTOMS BONDED WAREHOUSE. WITHDRAWAL OF
AIRCRAFT TURBINE FUEL UNDER THIS PARAGRAPH SHALL BE IN
ACCORDANCE WITH THE PROCEDURES IN 10.59 - 10.64, UNLESS
OTHERWISE PROVIDED IN THIS . THE CUSTOMS FORM 7506 USED FOR
WITHDRAWALS UNDER THIS (SEE 10.62) SHALL BE ANNOTATED WITH
THE TERM "WITHDRAWAL UNDER 19 CFR 10.62B".
(C) ESTABLISHMENT OF USE OF FUEL BY QUALIFYING AIRCRAFT.
THE PERSON WITHDRAWING AIRCRAFT TURBINE FUEL UNDER THIS
SHALL ESTABLISH USE BY AIRCRAFT QUALIFYING FOR THE PRIVILEGES
PROVIDED FOR IN 309, TARIFF ACT OF 1930, AS AMENDED, OF THE
FUEL WHICH IS NOT ENTERED AND UPON WHICH DUTIES ARE NOT PAID
BY SUBMITTING TO CUSTOMS BY THE 40TH DAY AFTER THE DAY OF
WITHDRAWAL OF THE FUEL EITHER--
(1) RECORDS PREPARED IN THE NORMAL COURSE OF
BUSINESS EFFECTING THE TRANSFER TO AIRCRAFT OF THE FUEL WHICH
IS NOT ENTERED AND ON WHICH DUTIES ARE NOT PAID AND OBJECTIVE
EVIDENCE THAT THE AIRCRAFT WERE ACTUALLY USED IN TRADE
QUALIFYING FOR THE PRIVILEGES PROVIDED IN 309, TARIFF ACT OF
1930, AS AMENDED; OR
(2) A CERTIFICATE (DOCUMENTARY OR ELECTRONIC) THAT:
(I) ALL OF THE FUEL WITHDRAWN WAS INTENDED FOR
USE ON AIRCRAFT ENTITLED TO THE PRIVILEGES PROVIDED FOR IN
309;
(II) WITHIN 30 DAYS OF THE DAY OF WITHDRAWAL
FROM WAREHOUSE, ALL OF THE FUEL WITHDRAWN WHICH IS NOT ENTERED
AND ON WHICH DUTIES ARE NOT PAID WAS TRANSFERRED AS SUPPLIES
TO AIRCRAFT ENTITLED TO THE PRIVILEGES PROVIDED FOR IN 309;
(III) ALL OF THE AIRCRAFT ONTO WHICH THE FUEL
WHICH IS NOT ENTERED AND ON WHICH DUTIES ARE NOT PAID WAS
TRANSFERRED AS SUPPLIES WERE USED IN A TRADE PROVIDED FOR IN
309; AND
(IV) THE PERSON MAKING THE CERTIFICATION
POSSESSES EVIDENCE (DOCUMENTARY OR ELECTRONIC) SUPPORTING EACH
OF THE ABOVE STATEMENTS.
UPON REQUEST BY CUSTOMS, THE PERSON MAKING THIS CERTIFICATION
SHALL PROVIDE THE EVIDENCE REQUIRED TO SUPPORT THE CLAIM FOR
TREATMENT UNDER 309 AND EACH OF THE STATEMENTS IN THE
CERTIFICATION.
(D) TREATMENT OF TURBINE FUEL WITHDRAWN BUT NOT USED ON
QUALIFYING AIRCRAFT WITHIN 30 DAYS. IF TURBINE FUEL IS
WITHDRAWN FROM A CUSTOMS BONDED WAREHOUSE UNDER THIS BUT
LESS FUEL THAN WAS WITHDRAWN IS ESTABLISHED TO HAVE BEEN USED
WITHIN 30 DAYS OF THE DAY OF WITHDRAWAL FROM WAREHOUSE ON
AIRCRAFT QUALIFYING FOR THE PRIVILEGES PROVIDED FOR IN 309,
TARIFF ACT OF 1930, AS AMENDED, A WITHDRAWAL FOR CONSUMPTION
SHALL BE FILED AND DUTIES SHALL BE DEPOSITED FOR THE EXCESS OF
FUEL SO WITHDRAWN OVER THAT USED ON AIRCRAFT SO QUALIFYING.
SUCH WITHDRAWAL SHALL BE FILED AND SUCH DUTIES SHALL BE
DEPOSITED BY THE 40TH DAY AFTER THE DAY OF WITHDRAWAL OF THE
FUEL IN ACCORDANCE WITH THE PROCEDURES IN 144.38 OF THIS
CHAPTER. INTEREST SHALL BE PAYABLE AND DEPOSITED
WITH SUCH DUTIES, CALCULATED FROM THE DAY OF WITHDRAWAL AT THE
RATE OF INTEREST ESTABLISHED UNDER 26 U.S.C. 6621.
(E) LIQUIDATED DAMAGES. FAILURE TO ACCOUNT FOR TURBINE
FUEL WITHDRAWN UNDER PARAGRAPHS (B) THROUGH (G) OF THIS , BY
THE ENTRY AND PAYMENT OF DUTY, WITH INTEREST, ON THE QUANTITY
OF FUEL SO WITHDRAWN BUT NOT ESTABLISHED TO HAVE BEEN USED ON
QUALIFYING AIRCRAFT WITHIN 30 DAYS OF WITHDRAWAL, AS PROVIDED
FOR IN PARAGRAPH (D), AND BY THE FILING OF THE EVIDENCE OR
CERTIFICATE ESTABLISHING SUCH USE ON THE FUEL WHICH IS NOT
ENTERED AND ON WHICH DUTIES ARE NOT PAID, AS PROVIDED FOR IN
PARAGRAPH (C), SHALL RESULT IN LIQUIDATED DAMAGES AGAINST THE
PERSON WITHDRAWING THE TURBINE FUEL, AS PROVIDED FOR UNDER
113.62 OF THIS CHAPTER.
(F) BLANKET WITHDRAWALS NOT PERMITTED. BLANKET
WITHDRAWALS (SEE 10.62(A) AND (B) AND 10.62A), MAY NOT BE
USED FOR WITHDRAWALS FROM WAREHOUSE UNDER 557(A), TARIFF ACT
OF 1930, AS AMENDED, AND PARAGRAPHS (B) THROUGH (G) OF THIS .
(G) RECORDKEEPING. THE PERSON WITHDRAWING AIRCRAFT
TURBINE FUEL FROM WAREHOUSE UNDER THIS IS SUBJECT TO THE
RECORDKEEPING REQUIREMENTS IN 19 U.S.C. 1508 AND 1509, AS
PROVIDED FOR IN PART 162 OF THIS CHAPTER.
PART 18 - TRANSPORTATION IN BOND AND MERCHANDISE IN
TRANSIT
1. THE GENERAL AUTHORITY FOR PART 18 IS REVISED TO READ, AND
SPECIFIC AUTHORITY FOR NEW 18.31 IS ADDED, AS FOLLOWS:
AUTHORITY: 5 U.S.C. 301, 19 U.S.C. 66, 1202 (GENERAL NOTE 16,
HTSUS), 1551, 1552, 1553, 1624;

18.31 ALSO ISSUED UNDER 19 U.S.C. 1553A.
2. SECTION 18.1 IS AMENDED BY REVISING THE SECOND SENTENCE OF
PARAGRAPH (A)(1) TO READ AS FOLLOWS:
18.1 CARRIERS, APPLICATION TO BOND.
(A)(1) FOR THE PURPOSES OF THIS , THE TERM
"COMMON CARRIER" MEANS A COMMON CARRIER OF MERCHANDISE OWNING
OR OPERATING A RAILROAD, STEAMSHIP, PIPELINE, OR OTHER
TRANSPORTATION LINE OR ROUTE.

3. PART 18 IS AMENDED BY ADDING A CENTER HEADING AND NEW
18.31, FOLLOWING 18.27, TO READ AS FOLLOWS:
MERCHANDISE TRANSPORTED BY PIPELINE
18.31 PIPELINE TRANSPORTATION OF BONDED MERCHANDISE.
(A) GENERAL. MERCHANDISE MAY BE TRANSPORTED BY PIPELINE
UNDER THE PROCEDURES IN THIS PART, AS APPROPRIATE AND UNLESS
OTHERWISE SPECIFICALLY PROVIDED FOR IN THIS .
(B) BILL OF LADING TO ACCOUNT FOR MERCHANDISE. UNLESS
CUSTOMS HAS REASONABLE CAUSE TO SUSPECT FRAUD, CUSTOMS SHALL
ACCEPT A BILL OF LADING OR EQUIVALENT DOCUMENT OF RECEIPT
ISSUED BY THE PIPELINE OPERATOR TO THE SHIPPER AND ACCEPTED BY
THE CONSIGNEE TO ACCOUNT FOR THE QUANTITY OF MERCHANDISE
TRANSPORTED BY PIPELINE AND TO MAINTAIN THE IDENTITY OF THE
MERCHANDISE.
(C) PROCEDURES WHEN PIPELINE IS ONLY CARRIER. WHEN A
PIPELINE IS THE ONLY CARRIER OF BONDED MERCHANDISE AND THERE
IS NO TRANSFER TO ANOTHER CARRIER, THE BILL OF LADING OR
EQUIVALENT DOCUMENT OF RECEIPT ISSUED BY THE PIPELINE OPERATOR
TO THE SHIPPER SHALL BE INCLUDED WITH, AND MADE A PART OF, THE
CUSTOMS IN-BOND DOCUMENT (SEE 18.2(B)) AND ENTRY OR
WITHDRAWAL (SEE 18.10) FOR THE MERCHANDISE. IF THERE ARE NO
DISCREPANCIES BETWEEN THE BILL OF LADING OR EQUIVALENT
DOCUMENT OF RECEIPT AND THE OTHER DOCUMENTS MAKING UP THE
IN-BOND MANIFEST FOR THE MERCHANDISE, AND PROVIDED THAT
CUSTOMS HAS NO REASONABLE CAUSE TO SUSPECT FRAUD, THE BILL OF
LADING OR EQUIVALENT DOCUMENT OF RECEIPT SHALL BE ACCEPTED BY
CUSTOMS AT THE PORT OF DESTINATION OR EXPORTATION (SEE
18.2(D), 18.7) AS ESTABLISHING THE QUANTITY AND IDENTITY OF
THE MERCHANDISE TRANSPORTED. THE PIPELINE OPERATOR SHALL BE
RESPONSIBLE FOR ANY DISCREPANCIES, INCLUDING SHORTAGES,
IRREGULAR DELIVERIES, OR NONDELIVERIES AT THE PORT OF
DESTINATION OR EXPORTATION (SEE 18.8).
(D) PROCEDURES WHEN THERE IS MORE THAN ONE CARRIER
(I.E., TRANSFER OF THE MERCHANDISE).
(1) PIPELINE AS INITIAL CARRIER. WHEN A PIPELINE
IS THE INITIAL CARRIER OF BONDED MERCHANDISE AND THE
MERCHANDISE IS TRANSFERRED TO ANOTHER CONVEYANCE (EITHER A
DIFFERENT MODE OF TRANSPORTATION OR A PIPELINE OPERATED BY
ANOTHER OPERATOR), THE PROCEDURES IN 18.3 AND PARAGRAPH (C)
OF THIS SHALL BE FOLLOWED, EXCEPT THAT--
(I) WHEN THE MERCHANDISE IS TO BE TRANSFERRED
TO ONE CONVEYANCE, A COPY OF THE BILL OF LADING OR EQUIVALENT
DOCUMENT ISSUED BY THE PIPELINE OPERATOR TO THE SHIPPER SHALL
BE DELIVERED TO THE PERSON IN CHARGE OF THE CONVEYANCE FOR
DELIVERY, ALONG WITH THE IN-BOND DOCUMENT, TO THE DISTRICT
DIRECTOR AT THE PORT OF DESTINATION OR EXPORTATION; OR
(II) WHEN THE MERCHANDISE IS TO BE TRANSFERRED
TO MORE THAN ONE CONVEYANCE, A COPY OF THE BILL OF LADING OR
EQUIVALENT DOCUMENT ISSUED BY THE PIPELINE OPERATOR TO THE
SHIPPER SHALL BE DELIVERED TO THE PERSON IN CHARGE OF EACH
ADDITIONAL CONVEYANCE, ALONG WITH THE TWO ADDITIONAL COPIES OF
THE CUSTOMS FORM IN-BOND DOCUMENT, FOR DELIVERY TO THE
DISTRICT DIRECTOR AT THE PORT OF DESTINATION OR EXPORTATION.
IN THE CASE OF BOTH PARAGRAPHS (D)(1)(I) AND (D)(1)(II), AT
THE PLACE OF TRANSSHIPMENT, CUSTOMS WILL EXECUTE THE
CERTIFICATE OF TRANSFER ON REQUIRED IN-BOND DOCUMENTS AND
BILLS OF LADING OR EQUIVALENT DOCUMENTS OF RECEIPT.
(2) TRANSFER TO PIPELINE FROM INITIAL CARRIER OTHER
THAN A PIPELINE. WHEN BONDED MERCHANDISE INITIALLY
TRANSPORTED BY A CARRIER OTHER THAN A PIPELINE IS TRANSFERRED
TO A PIPELINE, THE PROCEDURES IN 18.3 AND PARAGRAPH (C) OF
THIS SHALL BE FOLLOWED, EXCEPT THAT A BILL OF LADING OR
OTHER EQUIVALENT DOCUMENT OF RECEIPT ISSUED BY THE PIPELINE
OPERATOR TO THE SHIPPER SHALL BE PRESENTED TO THE DISTRICT
DIRECTOR OF CUSTOMS AT THE PLACE OF TRANSSHIPMENT, ALONG WITH
THE IN-BOND DOCUMENT WHICH ACCOMPANIED THE MERCHANDISE TO THAT
PLACE. THE CERTIFICATE OF TRANSFER SHALL BE EXECUTED ON BOTH
THE IN-BOND DOCUMENT AND THE BILL OF LADING OR EQUIVALENT
DOCUMENT OF RECEIPT.
(3) INITIAL CARRIER LIABLE FOR DISCREPANCIES. IN
THE CASE OF EITHER PARAGRAPH (D)(1) OR (D)(2) OF THIS , THE
INITIAL CARRIER SHALL BE RESPONSIBLE FOR ANY DISCREPANCIES,
INCLUDING SHORTAGES, IRREGULAR DELIVERIES, OR NONDELIVERIES,
AT THE PORT OF DESTINATION OR EXPORTATION (SEE 18.8).
(E) RECORDKEEPING. THE SHIPPER, PIPELINE OPERATOR, AND
CONSIGNEE ARE SUBJECT TO THE RECORDKEEPING REQUIREMENTS IN 19
U.S.C. 1508 AND 1509, AS PROVIDED FOR IN PART 162 OF THIS
CHAPTER.

COMMISSIONER OF CUSTOMS

APPROVED:

DEPUTY ASSISTANT SECRETARY OF THE TREASURY