supporting CFR

§ 146.5

19 CFR Ch. I (4–1–03 Edition)

zone. The operator, at its liability,
may allow the zone importer or owner
of the goods to store, safeguard, and
otherwise maintain or handle the goods
and the inventory records pertaining to
them.
(d) Records maintenance. The operator
shall (1) maintain the inventory control and recordkeeping system in accordance with the provisions of subpart
B, (2) retain all records required in this
part and defined in § 162.1(a) of this
chapter, pertaining to zone merchandise for 5 years after the merchandise
is removed from the zone, and (3) protect proprietary information in its custody from unauthorized disclosure.
Records shall be readily available for
Customs review at the zone.
(e) Merchandise security. The operator
shall maintain the zone and establish
procedures adequate to ensure the security of merchandise located in the
zone in accordance with applicable
Customs security standards and specifications.
(f) Storage and handling. The operator
shall store and handle merchandise in a
zone in a safe and sanitary manner to
minimize damage to the merchandise,
avoid hazard to persons, and meet
local, state, and Federal requirements
applicable to a specific kind of goods.
All trash and waste will be promptly
removed from a zone. Aisles will be established and maintained, and doors
and entrances left unblocked for access
by Customs officers and other persons
in the performance of their official duties.
(g) Guard service. The operator is authorized to provide guards or contract
for guard service to safeguard the merchandise and ensure the security of the
zone. This authorization does not limit
the authority of the port director to
assign Customs guards to protect the
revenue under section 4 of the Act (19
U.S.C. 81d).
(h) Miscellaneous responsibilities. The
operator is responsible for complying
with requirements for admission, manipulation, manufacture, exhibition, or
destruction, shortage, or overage; inventory control and recordkeeping systems, transfer to Customs territory,
and other requirements as specified in
this part. If the operator elects to
transfer merchandise from within the

district boundaries (see definition of
‘‘district’’ at § 112.1) to his zone, he
shall receipt for the merchandise at the
time he picks it up for transportation
to his facility. He becomes liable for
the merchandise at that time.
[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. A zone operator, or
where there is no operator, a grantee,
shall make written application to the
port director to obtain approval of activation of a zone or zone site. The area
to be activated may be all or any portion of the zone approved by the Board.
The application must include a description of all the zone sites covered by the
application, any operation to be conducted therein, and a statement of the
general character of the merchandise
to be admitted. The port director may
also require the operator or grantee to
submit fingerprints on form FD 258 or
electronically at the time of filing the
application. If the operator is an individual, that individual’s fingerprints
may be required. If the operator or
grantee is a business entity, fingerprints of all officers and managing officials may be required.
(b) Supporting documents. The application must be accompanied by the following:
(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

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United States Customs Service, Treasury

§ 146.7
(b) Deactivation or reactivation. A
grantee, or an operator with the concurrence of a grantee, shall make written application to the port director for
deactivation of a zone site, indicating
by layout or blueprint the exact site to
be deactivated. The port director shall
not approve the application unless all
merchandise in the site in zone status
(other than domestic status) has been
removed at the risk and expense of the
operator. The port director may require an accounting of all merchandise
in a zone as a condition of approving
the deactivation. A zone may be reactivated using the above procedure if a
sufficient bond is on file under
§ 146.6(d).
(c) Suspension of activated site. When
approval of an activated status has
been suspended through the procedure
in subpart G, the port director may require all goods in that area in zone status (other than domestic status) to be
transferred to another zone, a bonded
warehouse, or other location where
they may lawfully be stored, if the port
director considers that transfer advisable to protect the revenue or administer any Federal law or regulation.
(d) New bond. The port director may
require an operator to furnish, on 10
days notice, a new Foreign Trade Zone
Operator’s Bond on Customs Form 301.
If the operator fails to furnish the new
bond, no more merchandise will be received in the zone in zone status. Merchandise in zone status (other than domestic status) will be removed at the
risk and expense of the operator. A new
bond may be required if (1) the activated zone area is substantially altered; (2) the character of merchandise
admitted to the zone or operations performed in the zone are substantially
changed; (3) the existing bond lacks
good and sufficient surety; or (4) for
any other reason that substantially affects the liability of the operator under
the bond. Although a new bond may
not be required, the operator shall obtain the consent of the surety to any
material alteration in the boundaries
of the zone.
(e) New operator. A grantee of an activated zone site shall make written application to the port director for approval of a new operator, submitting
with the application a certification by

(5) The written concurrence of the
grantee, when the operator applies for
activation, in the requested zone activation.
(c) Inquiry by port director. As a condition of approval of the application, the
port director may order an inquiry by
a Customs officer into:
(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. The
port director shall promptly notify the
applicant in writing of his decision to
approve or deny the application to activate the zone. If the application is denied, the notification will state the
grounds for denial which need not be
limited to those listed in § 146.82. The
decision of the port director will be the
final Customs administrative determination in the matter. On approval of
the application, a Foreign Trade Zone
Operator’s Bond shall be executed on
Customs Form 301, containing the bond
conditions of § 113.73 of this chapter.
(e) Activation. Upon the port director’s approval of the application and
acceptance of the executed bond, the
zone or zone site will be considered activated; and merchandise may be admitted to the zone. Execution of the
bond by an operator does not lessen the
liability of the grantee to comply with
the Act and implementing regulations.
[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. An
operator shall make written application to the port director for approval of
an alteration of an activated area, including an alteration resulting from a
zone boundary modification. The application must be accompanied by the
supporting
document
requirements
specified in § 146.6, as applicable. The
port director may review the security,
suitability, and fitness of the area, and
shall reply to the applicant as provided
for in § 146.6.

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