U.S. Customs and Border Protection is seeking comments by March 17 on a proposed rule that would revise its regulations on the requirements applicable to the operation of class 9 warehouses, which are also known as duty-free stores. CBP states that these revisions would align the regulations with actual business practices and streamline outdated processes and requirements while ensuring that adequate records are maintained for audit purposes.
Highlights of the proposed changes include the following.
Vessel Supplies. The proposed blanket withdrawal procedure for a withdrawal of vessel supplies from a class 9 warehouse would allow, upon a showing of good cause and with the written approval of the appropriate CBP director of field operations, the transportation of the supplies in bond from the port where the warehouse is located to the port where the vessel is located. This change would permit the more timely and efficient movement of such supplies when, for example, they are delivered from a warehouse in one port to a cruise ship at another port.
Reporting. Class 9 proprietors would have 20 calendar days (up from five business days currently) to provide written confirmation of any theft, suspected theft or overage, or extraordinary shortages or damage. The person with the right to make entry would have 20 calendar days (up from five business days) after an overage is discovered to file a warehouse entry for it. Class 9 proprietors would be eligible for a reduced annual reconciliation reporting requirement if they successfully demonstrate by application to the appropriate CBP port director that shortages will be reported within 20 calendar days of discovery.
Store Operations. The proposal would provide an alternative to marking domestic merchandise as “U.S. origin” and merchandise previously entered or withdrawn for consumption as “duty paid” for class 9 proprietors who maintain an electronic system capable of immediately identifying such merchandise. The requirement that conditionally duty-free merchandise be physically separated from other merchandise in the sales or crib area would be eliminated for those class 9 proprietors who can immediately identify the duty status of goods through an electronic system. Sales tickets would no longer have to be made out in triplicate and the proprietor’s copy could be maintained electronically, provided that the port director is satisfied that the proprietor has the technological capability to immediately print the sales ticket upon the request of a CBP officer.
World Trade/Interactive
