[Federal Register Volume 64, Number 8 (Wednesday, January 13, 1999)]
[Notices]
[Pages 2274-2275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-719]
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DEPARTMENT OF THE TREASURY
Customs Service
[T.D. 99-8]
19 U.S.C. 1625(c) Inapplicable to Certain Specific Manufacturing
Drawback Rulings and General Manufacturing Drawback Notices of
Acknowledgment
AGENCY: Customs Service, Treasury.
ACTION: General notice.
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SUMMARY: Under 19 U.S.C. 1625(c) Customs is required to give notice of
any proposed interpretive ruling that would modify or revoke a prior
interpretive ruling. Customs is announcing in this document that it has
determined that rulings involving no interpretive decision by Customs
which modify or terminate specific manufacturing drawback rulings or
terminate general manufacturing drawback notices of acknowledgment fall
outside the scope of 19 U.S.C. 1625(c). Accordingly, it is Customs
position that any such modifications or terminations do not require
prior notice published in the Customs Bulletin.
DATES: January 13, 1999.
FOR FURTHER INFORMATION CONTACT: Bill Rosoff, Duty and Refund
Determinations Branch, Office of Regulations and Rulings, 1300
Pennsylvania Avenue, NW, Washington, DC, 20029, Tel. (202) 927-2277.
SUPPLEMENTARY INFORMATION:
Background
This document concerns a position that Customs is taking that 19
U.S.C. 1625(c) is not applicable to:
(1) Factual non-interpretive modifications or terminations of
specific drawback manufacturing rulings, or;
(2) Factual non-interpretive terminations of general manufacturing
drawback notices of acknowledgment.
It is Customs position that the modification or termination of a
specific manufacturing drawback ruling which involves no interpretive
decision by Customs, or the termination for non-interpretive factual
reasons of a general manufacturing drawback notice of acknowledgment,
does not require prior notice published in the Customs Bulletin before
publication of the final ruling.
Customs considers modifications or terminations which require no
interpretation of the drawback laws and regulations by Customs as non-
interpretive.
General Manufacturing Drawback Notices of Acknowledgment
Section 191.7 of the Customs Regulations (19 CFR 191.7) provides
that applicants for drawback involving certain common manufacturing
operations may apply for drawback by submitting a letter of
notification of intent to operate under a general manufacturing
drawback ruling that is published in Appendix A to Part 191, Customs
Regulations. The letter of notification of intent contains much factual
information, such as the name and address of the manufacturer or
producer, locations of the factories which will operate under the
letter of notification, description of the merchandise and the
manufacturing process and the IRS number. The drawback office to which
the letter of notification of intent to operate under a general
manufacturing drawback ruling was submitted will review the letter and,
if the letter complies with certain criteria set forth in 19 CFR
191.7(c), will issue an acknowledged letter of notification.
Specific Manufacturing Drawback Rulings
Section 191.8 of the Customs Regulations (19 CFR 191.8) provides
that each manufacturer or producer of an article intended to be claimed
for drawback is required to apply for a specific manufacturing drawback
ruling unless operating under a general manufacturing drawback ruling.
The contents of an application for a specific manufacturing
drawback ruling, as with a letter of notification of intent for general
manufacturing drawback, include much factual, non-interpretive
information. Examples of some issues which are factual and non-
interpretive include an applicant's name and address, IRS number,
description of the type of business in which engaged, factory location,
manufacturer's election of the manner by which it intends to show the
basis for its entitlement to drawback (i.e, ``used in,'' ``appearing
in,'' ``used in less valuable waste''), election of whether the claim
will involve trade-off, and location of the Customs office where claims
will be filed, etc.
An application may also raise issues which require Customs to
interpret the drawback statute and regulations. Such interpretive
issues may arise in rulings where Customs erroneously concluded that a
process accurately described in the application was a manufacture or
production, where Customs erroneously concluded that a process
accurately described in the application was a major conversion or that
the materials used were required for the safe operation of the vessel
or aircraft within the meaning of 19 U.S.C. 1313, or where Customs
erroneously concluded that accurately described substitute merchandise
was of the same kind and quality as the designated merchandise, etc.
If Customs determines that a specific manufacturing drawback
application is consistent with the drawback law and regulations, a
letter of approval will be issued to the applicant.
Approved Drawback Applications Are ``Rulings''
Before the final rule revising the drawback regulations published
in the Federal Register (63 FR 10970) on March 5, 1998 became
effective, an approved drawback application was called a drawback
contract. In that final rule document, Customs affirmed that an
approved drawback application is now considered a drawback ruling,
rather than a drawback contract, and subject to the requirements of 19
CFR Part 177 and 19 U.S.C. 1625. Accordingly, a specific manufacturer's
[[Page 2275]]
statement of its proposed operations under 19 U.S.C. 1313(a), (b), (d)
and (g) which is approved by Customs now constitutes a ruling.
Modification and Revocation of Rulings Under 19 U.S.C. 1625(c)
Pursuant to 19 U.S.C. 1625(c), before publishing a final ruling
which would (1) modify (other than to correct a clerical error) or
revoke a prior interpretive ruling which has been in effect for at
least 60 days or; (2) have the effect of modifying the treatment
previously accorded by Customs to substantially identical transactions,
Customs shall publish in the Customs Bulletin a proposed interpretive
ruling on the subject, giving interested parties the opportunity to
comment.
Termination of Specific Manufacturing Drawback Rulings or General
Manufacturing Drawback Notices of Acknowlegement
Under 19 CFR 191.8(h), a specific manufacturing drawback ruling
remains in effect indefinitely unless it is terminated for one of two
reasons: (1) it has not been used for five years and notice of
termination is published in the Customs Bulletin, or: (2) the ruling
recipient requests termination.
Under 19 CFR 191.7(d), an acknowledged letter of notification for
general manufacturing drawback remains in effect indefinitely unless it
is terminated under the same circumstances set forth in 19 CFR
191.8(h).
Termination of the effectiveness of a specific manufacturing
drawback ruling or general manufacturing drawback notice of
acknowledgment is equivalent to revocation under 19 U.S.C. 1625(c).
Modification of Specific Manufacturing Drawback Rulings
A specific manufacturing drawback ruling can be modified under 19
CFR 191.8(g) upon request of the manufacturer or producer. The Customs
Regulations do not provide for modification of a general manufacturing
drawback notice of acknowledgment.
Customs Processing of Approved Specific Manufacturing Drawback
Rulings and General Manufacturing Drawback Notices of
Acknowledgment
A unique computer-generated number is assigned when Customs
approves a specific manufacturing drawback ruling or acknowledges the
intent of a person to use a general manufacturing drawback ruling. This
number must be used when filing drawback claims with Customs. This
unique computer-generated number helps Customs track manufacturing
drawback transactions, particularly under the new Drawback Selectivity
System. The Drawback Selectivity System is intended to evaluate a
drawback claimant's compliance with the drawback laws and regulations
by providing a history of the claimant's activity. If a general
manufacturing drawback notice of acknowledgment or a specific
manufacturing drawback ruling is terminated, the computer-generated
number is removed from the active file part of the Drawback Selectivity
System as Customs intends to concentrate its compliance efforts on
active claimants. If a specific manufacturing drawback ruling is
modified, a suffix is added to the computer-generated number of the
original approved ruling which will continue the ruling as an active
file. This is important for purposes of the Drawback Selectivity
Program in that it continues the original specific manufacturing
drawback ruling as an active drawback selectivity file.
Independent of the Drawback Selectivity System, individual claims
of both active or inactive claimants remain subject to verification
under 19 CFR 191.61. If a verification of a general or specific
manufacturing claim reveals that the letter of intent for general
manufacturing drawback or application for specific manufacturing
drawback inaccurately described the actual operation employed by the
manufacturer, Customs may deny the claim without effecting a
modification or termination. In that situation, the failure of the
applicant to accurately describe the processing steps or the
specifications of the designated and substituted merchandise in the
application is the basis of denial of drawback.
Inapplicability of 19 U.S.C. 1625(c) to Factual, Non-Interpretive
Modifications or Terminations of Specific Manufacturing Drawback
Rulings or Non-Interpretive Terminations of General Manufacturing
Drawback Notices of Acknowlegement
As stated above, there are many factual elements of specific
manufacturing drawback rulings and letters of notice of intent which
are acknowledged for general manufacturing drawback. These factual
elements sometimes change and Customs is generally notified of such
changes by the recipient of the specific manufacturing drawback ruling
or the recipient of the notice of acknowledgment for general
manufacturing drawback. Such factual changes reflect the recipient's
altered circumstances and involve no interpretation of the drawback
statute and regulations by Customs. It is Customs position that
modifications or terminations of specific manufacturing drawback
rulings or terminations of general manufacturing drawback notices of
acknowledgment, which are limited to factual changes and involve no
interpretive decision by Customs, fall outside the scope of 19 U.S.C.
1625(c) as this section is not triggered absent a proposed
``interpretive'' ruling or decision. Accordingly, any such proposed
non-interpretive modification or termination does not require prior
notice published in the Customs Bulletin before publication of the
final ruling.
Furthermore, Customs perceives no benefit, either to the Service or
to the applicant, in postponing publication of a final ruling pending
prior publication of a notice which merely details changes to a
recipient's factual circumstance.
Of course, any modification or termination based on information
which requires Customs to interpret the drawback statute and
regulations will continue to be subject to the procedures of 19 U.S.C.
1625(c).
Dated: January 7, 1999.
Stuart P. Seidel,
Assistant Commissioner, Office of Regulations and Rulings.
[FR Doc. 99-719 Filed 1-12-99; 8:45 am]
BILLING CODE 4820-02-P
