Supporting Law/Reg

United States Customs Service, Treasury
§ 151.13 Approval of commercial gaugers.
This section sets forth the requirements for commercial gaugers to obtain approval by Customs for the measuring of certain merchandise, and explains the operation of such approved
gaugers. This section also provides for
the imposition of approval and reapproval fees, sets forth grounds for
the suspension or revocation of approval, and provides for the imposition
of a monetary penalty for an approved
commercial gauger that fails to adhere
to the provisions of this section.
(a) What is a ‘‘Customs-approved gauger’’? ‘‘Commercial gaugers’’ are individuals and commercial organizations
that measure, gauge, or sample merchandise (usually merchandise in bulk
form) and who deal mainly with animal
and vegetable oils, petroleum, petroleum products, and bulk chemicals. A
‘‘Customs-approved gauger’’ is a commercial concern, within the United
States, that has demonstrated, to the
satisfaction of the Executive Director
(defined at § 151.12(a)), pursuant to this
section, the capability to perform certain gauging and measurement procedures for certain commodities. Customs approval extends only to the performance of such functions as are vested in, or delegated to, Customs.
(b) What are the obligations of a Customs-approved gauger? A commercial
gauger approved by Customs agrees to
the following conditions and requirements:
(1) To comply with the requirements
of part 151, Customs Regulations (19
CFR part 151), and to conduct professional services in conformance with approved standards and procedures, including procedures which may be required by the Commissioner of Customs or the Executive Director;
(2) To have no interest in or other
connection with any business or other
activity which might affect the unbiased performance of duties as a Customs-approved gauger. It is understood
that this does not prohibit acceptance
of the usual fees for professional services;
(3) To maintain the ability, i.e., the
instrumentation, equipment, qualified
staff, facilities, etc., to perform the
services for which the gauger is ap-

§ 151.13
proved, and allow the Executive Director to evaluate that ability on a periodic basis by such means as on-site inspections, demonstrations of gauging
procedures, and reviews of submitted
records;
(4) To retain those gauger records beyond the five-year record-retention period specified by Customs as necessary
to address matters concerned in pending litigation, and, if gauger operations
or approval cease, to contact Customs
immediately regarding the disposition
of records retained;
(5) To promptly investigate any circumstance which might affect the accuracy of work performed as an approved gauger, to correct the situation
immediately, and to notify both the
port director and the Executive Director of such matters, their consequences, and any corrective action
taken or that needs to be taken; and
(6) To immediately notify both the
port director and the Executive Director of any attempt to impede, influence, or coerce gauger personnel in the
performance of their duties, or of any
decision to terminate gauger operations or approval status. Further,
within 5 days of any changes involving
legal name, address, ownership, parentsubsidiary relationships, bond, other
offices or sites, or approved signatories
to notify the Executive Director by
certified mail.
(c) What are the approved measurement
procedures? Customs-approved gaugers
must comply with appropriate procedures published by such professional
organizations as the American Society
for Testing and Materials (ASTM) and
the American Petroleum Institute
(API), unless the Executive Director
gives written permission to use an alternate method. Alternative methods
will be considered and approved on a
case-by-case basis.
(d) How would a commercial gauger become a Customs-approved gauger? (1)
What should an application contain? An
application for Customs approval must
contain the following information:
(i) The applicant’s legal name and
the address of its principal place of
business and any other facility out of
which it will work;

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§ 151.13

19 CFR Ch. I (4–1–02 Edition)

(ii) Detailed statements of ownership
and any partnerships, parent-subsidiary relationships, or affiliations
with any other domestic or foreign organizations, including, but not limited
to, importers, producers, refiners, Customs brokers, or carriers;
(iii) A statement of financial condition;
(iv) If a corporation, a copy of the articles of incorporation and the names
of all officers and directors;
(v) The names, titles, and qualifications of each person who will be authorized to sign or approve gauging reports on behalf of the commercial
gauger;
(vi) A complete description of the applicant’s facilities, instruments, and
equipment;
(vii) An express agreement that if notified by Customs of pending approval
to execute a bond in accordance with
part 113, Customs Regulations (19 CFR
part 113), and submit it to the Customs
port nearest to the applicant’s main office. (The limits of liability on the
bond will be established by the Customs port in consultation with the Executive Director. In order to retain
Customs approval, the gauger must
maintain an adequate bond, as determined by the port director);
(viii) An express agreement to be
bound by the obligations contained in
paragraph (b) of this section; and,
(ix) A nonrefundable pre-payment
equal to 50 percent of the fixed approval fee, as published in the FEDERAL
REGISTER and Customs Bulletin, to
cover preliminary processing costs.
Further, the applicant agrees to pay
Customs within 30 days of notification
of preliminary approval the associated
charges assessed for approval, i.e.,
those charges for actual travel and
background investigation costs, and
the balance of the fixed approval fee.
(2) Where should an application be
sent? A commercial gauger seeking approval or an extension of an existing
approval must send a letter of application to the U.S. Customs Service, Attention: Executive Director, Laboratories & Scientific Services, 1300 Pennsylvania Ave., NW, Washington, D.C.
20229.
(3) How will an application be reviewed?

(i) Determination of competence. The
Executive Director will determine the
applicant’s overall competence, independence, and character by conducting
on-site inspections, which may include
demonstrations by the applicant of
gauging procedures and a review of
records submitted, and background investigations. The Executive Director
may also conduct proficiency testing
through check samples.
(ii) Evaluation of technical and operational requirements. Customs will determine whether the following technical and operational requirements are
met:
(A) Equipment. The facility must be
equipped with all of the instruments
and equipment needed to conduct approved services. The gauger must ensure that all instruments and equipment are properly calibrated, checked,
and maintained.
(B) Facilities. The facility must have,
at a minimum, adequate space, lighting, and environmental controls to ensure compliance with the conditions
prescribed for appropriate measurements.
(C) Personnel. The facility must be
staffed with persons having the necessary education, training, knowledge,
and experience for their assigned functions (e.g., maintaining equipment,
calibrating instruments, performing
gauging services, evaluating gauging
results, and signing gauging reports on
behalf of the commercial gauger). In
general, each technical staff member
should have, at a minimum, six months
training and experience in gauging.
(e) How will an applicant be notified
concerning approval?
(1) Notice of approval or nonselection.
When Customs evaluation of a gauger’s
credentials is completed, the Executive
Director will notify the gauger in writing of its preliminary approval or nonselection. (Final approval determinations will not be made until the applicant has satisfied all bond requirements and made payment on all assessed charges and the balance of the
applicable approval fee). All final notices of approval, reapproval, or extension of existing Customs approval will
be published in the FEDERAL REGISTER
and Customs Bulletin.

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United States Customs Service, Treasury
(2) Grounds for nonselection. The Executive Director may deny a gauger’s application for any of the following reasons:
(i) The application contains false or
misleading information concerning a
material fact;
(ii) The gauger, a principal of the
gauging facility, or a person the Executive Director determines is exercising
substantial ownership or control over
the gauger operation is indicted for,
convicted of, or has committed acts
which would:
(A) Under United States federal or
state law, constitute a felony or misdemeanor involving misstatements,
fraud, or a theft-related offense; or
(B) Reflect adversely on the business
integrity of the applicant;
(iii) A determination is made that
the gauger-applicant does not possess
the technical capability, have adequate
facilities, or management to perform
the approved methods of measurement
for Customs purposes;
(iv) A determination is made that the
gauger has submitted false reports or
statements concerning the measurement of merchandise, or that the applicant was subject to sanctions by state,
local, or professional administrative
bodies for such conduct;
(v) Nonpayment of assessed charges
and the balance of the fixed approval
fee; or
(vi) Failure to execute a bond in accordance with part 113 of this chapter.
(3) Adverse approval decisions; appeal
procedures. (i) Preliminary notice. A
gauger which is not selected for approval will be sent a preliminary notice of nonselection. The preliminary
notice of nonselection will state the
specific grounds for the proposed nonselection decision and advise the gauger that it may file a response addressing the grounds for the action proposed
with the Executive Director within 30
calendar days of the date the preliminary notice of nonselection was received by the gauger.
(ii) Final notice. (A) Based on nonresponse. If the gauger does not respond
to the preliminary notice, the Executive Director will issue a final notice of
nonselection within 60 calendar days of
the date the preliminary notice of nonselection was received by the gauger

§ 151.13
applicant. The final notice of nonselection will state the specific grounds for
the nonselection and advise the gauger
that it may choose to pursue one of the
following two options:
(1) Submit a new application for approval, in accordance with the provisions of paragraph (d)(1) of this section,
180 days after the date of the final notice of nonselection; or
(2) Administratively appeal the final
notice of nonselection to the Assistant
Commissioner within 30 calendar days
of the date of the final notice of nonselection.
(B) Based on response. If the gauger
files a timely response, the Executive
Director will issue a final determination regarding the gauger’s approval
within 30 calendar days of the date the
applicant’s response is received by the
Executive Director. If this final determination is adverse to the gauger, then
the final notice of nonselection will
state the specific grounds for nonselection and advise the gauger that it may
choose to pursue one of the two options
provided at paragraphs (e)(3)(ii)(A)(1)
and (2) of this section.
(iii) Appeal decision. The Assistant
Commissioner will issue a decision on
the appeal within 30 calendar days of
the date the appeal is received. If the
appeal decision is adverse to the gauger, then the decision notice will advise
the gauger that it may choose to pursue one of the following two options:
(A) Submit a new application for approval, in accordance with the provisions of paragraph (d)(1) of this section,
120 days after the date of the appeal decision; or
(B) File an action with the Court of
International Trade, pursuant to chapter 169 of title 28, United States Code,
within 60 days of the date of the appeal
decision.
(f) What are the approval/reapproval
fee requirements?
(1) In general. A fixed fee, representing
Customs
administrative
overhead expense, will be assessed for
each application for approval or reapproval. In addition, associated assessments, representing the actual
costs associated with travel and per
diem of Customs employees related to
verification of application criteria and
background investigations will be

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§ 151.13

19 CFR Ch. I (4–1–02 Edition)

charged. The combination of the fixed
fee and associated assessments represent reimbursement to Customs for
costs related to approval and reapproval. The fixed fee will be published in the Customs Bulletin and the
FEDERAL REGISTER. Based on a review
of the actual costs associated with the
program, the fixed fee may be adjusted
periodically; any changes will be published in the Customs Bulletin and the
FEDERAL REGISTER.
(i) Approval fees. A nonrefundable prepayment equal to 50 percent of the
fixed approval fee to cover preliminary
processing costs must accompany each
application for approval. Before a
gauger will be approved, it must submit to Customs, at the address specified in the billing, within the 30 day
billing period the associated charges
assessed for the approval and the balance of the fixed approval fee.
(ii) Reapproval fees. Before a gauger
will be reapproved, it must submit to
Customs, at the billing address specified, within the 30 day billing period,
the fixed reapproval fee.
(2) Disputes. In the event a gauger
disputes the charges assessed for travel
and per diem costs associated with
scheduled inspection visits, it may file
an appeal within 30 calendar days of
the date of the assessment with the Executive Director. The appeal letter
must specify which charges are in dispute and provide such supporting documentation as may be available for each
allegation. The Executive Director will
make findings of fact concerning the
merits of an appeal and communicate
the agency decision to the gauger in
writing within 30 calendar days of the
date of the appeal.
HTSUS

(g) Can existing Customs-approved
gaugers continue to operate? Commercial
gaugers approved by the Executive Director prior to December 8, 1993, will
retain approval under these regulations
provided that they conduct their business in a manner consistent with the
administrative portions of this section.
This paragraph does not pertain to any
gauger which has had its approval suspended or revoked. Gaugers which have
had their approvals continued under
this section will have their status reevaluated on their next triennial inspection date which is no earlier than
three years after the effective date of
this regulation. At the time of reapproval, these gaugers must meet the
requirements of this section and remit
to Customs, at the address specified in
the billing, within the 30 day billing period the fixed reapproval fee. Failure to
meet these requirements will result in
revocation or suspension of the approval.
(h) How will Customs-approved gaugers
operate?
(1) Reports. (i) Contents of reports. The
measurement results from a Customsapproved gauger that are submitted by
an importer of record with respect to
merchandise in an entry, in the absence of measurements conducted by
Customs, will be accepted by Customs,
provided that the importer of record
certifies that the measurement was of
the merchandise in the entry. All reports must measure net landed quantity, except in the case of crude petroleum of Heading 2709, Harmonized Tariff Schedule of the United States
(HTSUS), which may be measured by
gross quantity. Reports must use the
appropriate HTSUS units of quantity,
e.g., liters, barrels, or kilograms.

Product

Headings 1501–1515 ................................
Subheadings
2707.10–2707.30
and
2902.20–2902.44.
Heading 2709 ............................................
Heading 2710 (various subheadings) .......

Unit of quantity

Animal and vegetable oils ....................... Kilogram.
Benzene, toluene and xylene .................. Liter.

Crude Petroleum ..................................... Barrel.
Fuel oils, motor oils, kerosene, naphtha, Barrel.
lubricating oils .
Chapter 29 (various subheadings) ............ Organic compounds in bulk and liquid Kilogram, liter, etc.
form .

(ii) Status of commercial reports where
Customs also gauges merchandise. Nothing in these regulations will preclude

Customs from gauging a shipment
which has been gauged by a Customsapproved gauger at the request of an

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United States Customs Service, Treasury
importer. In cases where a shipment
has been gauged by both Customs and a
Customs-approved gauger, all Customs
actions will be based upon the gauging
reports issued by Customs, unless the
Executive Director advises other actions. If Customs gauges merchandise,
it will release the report of its measurements to the importer of record or
its agent upon request unless the gauging information is proprietary to the
holder of a copyright or patent, or developed by Customs for enforcement
purposes.
(2) Recordkeeping requirements. Customs-approved gaugers must maintain
records of the type normally kept in
the ordinary course of business in accordance with the provisions of this
chapter and any other applicable provisions of law, and make them available
during normal business hours for Customs inspection. In addition, these
gaugers must maintain all records necessary to permit the evaluation and
verification of all Customs-related
work, including, as appropriate, those
described below. All records must be
maintained for five years, unless the
gauger is notified in writing by Customs that a longer retention time is
necessary for particular records. Electronic data storage and transmission
may be approved by Customs.
(i) Transaction records. Records for
each Customs-related transaction must
be readily accessible and have the following:
(A) A unique identifying number;
(B) The date and location where the
transaction occurred;
(C) The identity of the product (e.g.
crude oil);
(D) The name of the client;
(E) The source of the product (e.g.,
name of vessel, flight number of airline); and
(F) If available, the Customs entry
date, entry number, and port of entry
and the names of the importer, exporter, manufacturer, and country-oforigin.
(ii) Major equipment records. Records
for each major piece of equipment used
in Customs-related work must identify
the name and type of instrument, the
manufacturer’s name, the instrument’s
model and any serial numbers, and the
occurrence of all servicing performed

§ 151.13
on the equipment or instrument, to include recalibration and any repair
work, identifying who performed the
service and when.
(iii) Records of gauging procedures.
The Customs-approved gauger must
maintain complete and up-to-date copies of all approved gauging procedures,
calibration methods, etc., and must
document the procedures that each
staff member is authorized to perform.
These procedures must be readily
available to appropriate staff.
(iv) Gauging records. The Customs-approved gauger must identify each
transaction by transaction record number (see paragraph (h)(2)(i) of this section) and must maintain all information or data (such as temperatures,
etc.) associated with each Customs-related gauging transaction. Each gauging record (i.e., the complete file of all
data for each separate transaction)
must be dated and initialed or signed
by the staff member(s) who did the
work.
(v) Gauging reports. Each gauging report submitted to Customs must include:
(A) The name and address of the Customs-approved gauger;
(B) A description and identification
of the transaction, including its unique
identifying number;
(C) The designations of each gauging
procedure used;
(D) The gauging report itself (i.e., the
quantity of the merchandise);
(E) The date of the report; and
(F) The typed name and signature of
the person accepting technical responsibility for the gauging report (i.e., an
approved signatory).
(3) Representation of Customs-approved
status. Commercial gaugers approved
by Customs must limit statements or
wording regarding their approval to an
accurate description of the commodities for which approval has been obtained. Use of terms other than those
appearing in the notice of approval (see
paragraph (e) of this section) is prohibited.
(4) Subcontracting prohibited. Customs-approved gaugers must not subcontract Customs-related work to non
Customs-approved gaugers or non Customs-accredited laboratories, but may
subcontract to other facilities that are

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§ 151.13

19 CFR Ch. I (4–1–02 Edition)

Customs-approved/accredited and in
good standing.
(i) How can a gauger have its approval
suspended or revoked or be required to
pay a monetary penalty?
(1) Grounds for suspension, revocation,
or assessment of a monetary penalty. (i)
In general. The Executive Director may
immediately suspend or revoke a gauger’s approval only in cases where the
gauger’s actions are intentional violations of any Customs law or when required by public health or safety. In
other situations where the Executive
Director has cause, the Executive Director will propose the suspension or
revocation of a gauger’s approval or
propose a monetary penalty and provide the gauger with the opportunity
to respond to the notice of proposed action.
(ii) Specific grounds. A gauger’s approval may be suspended or revoked, or
a monetary penalty may be assessed
because:
(A) The selection was obtained
through fraud or the misstatement of a
material fact by the gauger;
(B) The gauger, a principal of the
gauging facility, or a person the port
director determines is exercising substantial ownership or control over the
gauger operation is indicted for, convicted of, or has committed acts which
would: under United States federal or
state law, constitute a felony or misdemeanor involving misstatements,
fraud, or a theft-related offense; or reflect adversely on the business integrity of the applicant. In the absence of
an indictment, conviction, or other
legal process, the port director must
have probable cause to believe the proscribed acts occurred;
(C) Staff gauger personnel refuse or
otherwise fail to follow any proper
order of a Customs officer or any Customs order, rule, or regulation;
(D) The gauger fails to operate in accordance with the obligations of paragraph (b) of this section;
(E) A determination is made that the
gauger is no longer technically or operationally proficient at performing the
approved methods of measurement for
Customs purposes;
(F) The gauger fails to remit to Customs, at the billing address specified,
within the 30 day billing period the as-

sociated charges assessed for the approval and the balance of the fixed approval fee;
(G) The gauger fails to maintain its
bond;
(H) The gauger fails to remit to Customs, at the billing address specified,
within the 30 day billing period the
fixed reapproval fee; or
(I) The gauger fails to remit any
monetary penalty assessed under this
section.
(iii) Assessment of monetary penalties.
The assessment of a monetary penalty
under this section, may be in lieu of, or
in addition to, a suspension or revocation of approval under this section. The
monetary penalty may not exceed
$100,000 per violation and will be assessed and administered pursuant to
published guidelines. Any monetary
penalty under this section can be in addition to the recovery of:
(A) Any loss of revenue, in cases
where the gauger intentionally falsified the gauging report in collusion
with the importer, pursuant to 19
U.S.C. 1499(b)(1)(B)(i); or
(B) Liquidated damages assessed
under the gauger’s Customs bond.
(2) Notice of adverse action. When a decision to suspend or revoke approval,
and/or assess a monetary penalty is
made, the Executive Director will immediately notify the gauger in writing,
indicating whether the action is effective immediately or is proposed.
(i) Immediate suspension or revocation.
Where the suspension or revocation of
approval is immediate, the Executive
Director will issue a final notice of adverse determination. The final notice
of adverse determination will state the
specific grounds for the immediate suspension or revocation, direct the gauger to cease performing any Customs-approved functions, and advise the gauger
that it may choose to pursue one of the
following two options:
(A) Submit a new application for approval, in accordance with the provisions of paragraph (d)(1) of this section,
180 days after the date of the final notice of nonselection; or
(B) Administratively appeal the final
notice of adverse determination to the
Assistant Commissioner within 30 calendar days of the date of the final notice of adverse determination.

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United States Customs Service, Treasury
(ii) Proposed suspension, revocation, or
assessment of monetary penalty.
(A) Preliminary notice. Where the suspension or revocation of approval, and/
or the assessment of a monetary penalty is proposed, the Executive Director will issue a preliminary notice of
proposed action. The preliminary notice of proposed action will state the
specific grounds for the proposed action, inform the gauger that it may
continue to perform those functions requiring Customs-approval until the Executive Director’s final notice is
issued, and advise the gauger that it
may file a response addressing the
grounds for the action proposed with
the Executive Director within 30 calendar days of the date the preliminary
notice of proposed action was received
by the gauger. The gauger may respond
by accepting responsibility, explaining
extenuating circumstances, and/or providing rebuttal evidence. The gauger
also may ask for a meeting with the
Executive Director or his designee to
discuss the proposed action.
(B) Final notice.
(1) Based on nonresponse. If the gauger does not respond to the preliminary
notice of proposed action, the Executive Director will issue a final notice of
adverse determination within 60 calendar days of the date the preliminary
notice of proposed action was received
by the gauger. The final notice of adverse determination will state the specific grounds for the adverse determination, direct the gauger to cease
performing
any
Customs-approved
functions, and advise the gauger that it
may choose to pursue one of the two
options
provided
at
paragraphs
(i)(2)(i)(A) and (B) of this section.
(2) Based on response. If the gauger
files a timely response, the Executive
Director will issue a final determination regarding the status of the gauger’s approval within 30 calendar days of
the date the gauger’s response is received by the Executive Director. If
this final determination is adverse to
the gauger, then the final notice of adverse determination will state the specific grounds for the adverse action, advise the gauger to cease performing
any functions requiring Customs approval, and advise the gauger that it

§ 151.14
may choose to pursue one of the two
options
provided
at
paragraphs
(i)(2)(i))(A) and (B) of this section.
(3) Publication of final notices of adverse determination.
Any final notices of adverse determination issued by the Executive Director resulting in a gauger being directed to cease performing Customs-approved functions will be published in
the FEDERAL REGISTER and Customs
Bulletin and the notice published will
include the effective date, duration,
and scope of the determination.
(4) Appeal decision. The Assistant
Commissioner will issue a decision on
the appeal within 30 calendar days of
the date the appeal is received. If the
appeal decision is adverse to the gauger, then the decision notice will advise
the gauger that it may choose to pursue one of the following two options:
(i) Submit a new application for approval, in accordance with the provisions of paragraph (d)(1) of this section,
120 days after the date of the appeal decision; or
(ii) File an action with the Court of
International Trade, pursuant to chapter 169 of title 28, United States Code,
within 60 calendar days of the date of
the appeal decision.
[T.D. 99–67, 64 FR 48539, Sept. 7, 1999; T.D. 99–
67, 65 FR 10011, Feb. 25, 2000]

§ 151.14 Use of commercial laboratory
tests in liquidation.
The analysis method for crude petroleum contained in ASTM D96 or other
approved analysis method and as determined by a Customs-accredited commercial laboratory shall be used for
Customs purposes if the difference between the value found by the commercial laboratory and the value found by
the Customs laboratory does not exceed 0.11 percent. If the difference exceeds this limit and the Customs-accredited commercial laboratory cannot
establish that Customs is in error, then
the Customs results shall be used.
[T.D. 90–78, 55 FR 40167, Oct. 2, 1990, as
amended by T.D. 99–67, 64 FR 48543, Sept. 7,
1999]

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