(i) That the specification can be equaled or exceeded with the instrument or apparatus described in subparagraph (3) of this paragraph; or

(ii) That although the instrument or apparatus differs in design from the article, it is nonetheless scientifically equivalent because it is as capable as or better than the article in fulfilling the purpose(s) relevant to the specification; or

(iii) The specification is not pertinent because it does not relate to one or more purposes described by the applicant in response to question 7, being rather a convenience or representing personal preferences, cost factors and the like.

(5) Where the comments regarding subparagraph (4) (i) or (ii) of this paragraph relate to a particular accessory or optional device offered by the domestic manufacturer, cite the type, model, or other catalog designation of the accessory or device and include the specifications therefor in the comments.

(6) Where the justification for dutyfree entry is based on excessive delivery time, show whether

(i) Such instrument or apparatus are as a general rule either produced for stock, produced on order, or are custom-made; and

(ii) An instrument or apparatus of equivalent scientific value to the article, for the purposes described in response to question 7 could have been produced and delivered to the applicant within a reasonable time following the receipt of the order.

(7) Indicate whether the applicant afforded the domestic manufacturer an opportunity to furnish an instrument or apparatus of equivalent scientific value to the article for the purposes described in response to question 7 and, if such be the case, whether the applicant submitted a formal invitation to bid that included the technical requirements of the applicant.

§ 701.10 Additions to the record.

(a) The Deputy Assistant Secretary shall assemble the application, and those comments meeting the requirements of § 701.9 into a record. After the period for comment (§ 701.9(a)) has ended, he shall not place explanations, arguments, or recommendations, other than those obtained from any selected Federal agency (ies) pursuant to paragraph (b) of this section, in the record in any form. He shall treat written comments received after the period for comment has

ended as offers to provide additional information (see paragraph (c) of this section) to the extent that they contain factual information, as contrasted with arguments, explanations or recommendations.

(b) The Deputy Assistant Secretary may add to the record such additional written factual information available within the executive branch of the Government, and such printed information generally available to the public, as he deems appropriate and pertinent. He may also obtain for the record an opinion on any issue before him and reasons therefor from any agency of the Government which he regards as having particular competency in the field in question.

(c) If it appears to the Deputy Assistant Secretary that the information in the record is not sufficient to enable him to render a decision, if the action of denial without prejudice to resubmission appears to be inappropriate, and if it further appears that certain additional factual information will cure the insufficiency of the record, the Deputy Assistant Secretary, in his discretion, may request and place in the record such additional factual information as he feels will enable him to render a decision from the party or those parties that appear best suited to provided the information. The Deputy Assistant Secretary may attach appropriate conditions and time limitations upon the provision of such information, and may draw appropriate inferences from the failure of a party to provide the information requested from him. The Deputy Assistant Secretary shall not, under this procedure, place arguments, explanations or recommendations upon the record. The Deputy Assistant Secretary may also, in his discretion, request from any party or parties to a proceeding hereunder, and place in the record, such additional affirmations as he deems necessary to enable him to render a decision.

§ 701.11 Review and findings of the Department of Commerce.

(a) Scientific equivalency. The determination of scientific equivalency shall be based on a comparison of the pertinent specifications of the foreign instrument with similar pertinent specifications of the most closely comparable domestic instrument. The guaranteed specifications for the foreign article will be considered in the comparison, includ

ing any amendments to the guaranteed specifications which have been inserted in the record. Similarly, the guaranteed specifications for the most closely comparable domestic instrument will be considered, including any amendments to the guaranteed specifications which have been inserted in the record. In the comparison, the Deputy Assistant Secretary may consider any reasonable combination of domestic instruments and accessories as being comparable to a foreign instrument that combines two or more functions in an integrated unit, if the combination of domestic instruments and accessories is capable of accomplishing the purposes for which the foreign instrument is intended to be used. If the Deputy Assistant Secretary finds that at least one domestic instrument or reasonable combination of domestic instruments does possess all the pertinent specifications of the foreign article, he shall find that there is being manufactured in the United States an instrument of equivalent scientific value to the foreign instrument for such purposes as described in the response to question 7 of the application form. Otherwise, he shall find to the contrary.

in the United

(b) Manufactured States. An instrument, apparatus, or accessory shall be considered as being manufactured in the United States if it is customarily produced for stock, produced on order, or custom-made within the United States. In determining whether a U.S. manufacturer is able and willing to produce a produced on order, or custom-made instrument, apparatus, or accessory and have it available without unreasonable delay to the applicant the Deputy Assistant Secretary shall take into account the normal commercial practices applicable to the production and delivery of instruments, apparatus, or accessories of the same general category. For example, in determining whether a domestic manufacturer is able to produce a custom-made instrument, apparatus, or accessory the Deputy Assistant Secretary may take into account the production experiences of the domestic manufacturer with respect to the types and complexity of products, the extent of the technological gap between the instrument, apparatus, or accessory to which the application relates and the manufacturer's customary products, and the availability of the professional and technical skills, as well as manu

facturing experience, essential to bridging the gap and the time required by the domestic manufacturer to produce an instrument, apparatus, or accessory to purchaser's specifications.

(c) Excessive delivery time. Dutyfree entry of the article shall be considered justified without regard to whether there is being manufactured in the United States an instrument, apparatus, or accessory of equivalent scientific value for the purposes described in response to question 7 of the application form, if the delay in obtaining such domestic instrument, apparatus, or accessory (as indicated by the difference between the delivery times quoted by domestic manufacturer and foreign manufacturer) will seriously impair the accomplishment of the purposes. In determining whether the difference in delivery times is excessive, the Deputy Assistant Secretary shall take into account the relevancy of the applicant's program to other research programs with respect to timing, the applicant's need to have such instrument, apparatus, or accessory available at the scheduled time for the course(s) in which the article is intended to be used, and other relevant circumstances.

(d) Decision on the application. The Deputy Assistant Secretary shall prepare a written decision granting or denying the application in whole or in part. The decision shall be in the form of one or more findings stating whether an instrument or apparatus of equivalent scientific value to the article for which duty-free entry is sought, for the purposes for which it is intended to be used, is or is not being manufactured in the United States, and it shall include a statement of his reasons for the finding(s). He shall transmit the decision to the FEDERAL REGISTER for publication, to the Commissioner of Customs, and to the applicant. At the same time, he shall make a copy of the record available for public review. (Copies of materials received pursuant to paragraphs (a) and (c) of § 701.10 which were not entered in the record pursuant to § 701.10 shall also be made available for public review. The Deputy Assistant Secretary may dispose of such materials at any time after final disposition of the application.) Pursuant to 19 CFR 10.117, the Deputy Assistant Secretary shall notify the district director of customs for the district in which entry of the merchandise in question was made, or the Com

missioner of Customs if the district of entry is not known to the Deputy Assistant Secretary, of the final disposition of each application. If the Deputy Assistant Secretary thereafter receives notice from the applicant in accordance with 19 CFR 10.116(c), he shall then notify said district director of the final disposition of the application. For purposes of this paragraph, disposition of an application shall be deemed final (1) when 20 days have elapsed after publication of the decision in the FEDERAL REGISTER and no appeal has been taken pursuant to § 701.12, or (2) if such appeal has been taken, when final judgment is made and entered by the U.S. Court of Customs and Patent Appeals.

(e) Consolidated decision. The Deputy Assistant Secretary may on his own initiative, consolidate two or more applications under a single notice of consolidated decision whenever he deems such consolidation to be appropriate. An appeal from any decision published in such notice of consolidated decision which is

An appeal from any decision made pursuant to § 701.11 may be taken, in accordance with headnote 6(e) to part 4 of Schedule 8, only to the U.S. Court of Customs and Patent Appeals and only on a question or questions of law, within 20 days after publication of the decision in the FEDERAL REGISTER. If at any time while its application is under consideration by the Deputy Assistant Secretary or by the Court of Customs and Patent Appeals on an appeal from a finding by him, an institution cancels an order for the instrument or apparatus to which the application relates or ceases to have a firm intention to order such instrument or apparatus, the institution shall promptly notify the Deputy Assistant Secretary or such court, as the case may be.

Part

802

803

(2) The Department of Commerce may in lieu of individual reports required under this part, accept consolidated reports from foreign governments covering the operations of their national shipping concerns when, in its discretion, such consolidated reports would provide the information required by this part. Where such reports are accepted, the individual reports from operators or their agents will not be required.

(b) The foreign operator, for purposes of this part, means the owner, managing or operating owner, chartered owner, or subchartered owner who enters into and carries out any form of transportation contract with the shippers of merchandise or with passengers.

(c) If foreign-owned vessels or aircraft are chartered to other foreign operators, the owner should report his expenses in the United States, if any, and the operator should report the freight or charter revenue earned from the shippers of merchandise and his expenses in the United States.

(d) If foreign-owned vessels or aircraft are chartered to a United States operator, the owner should report his expenses in the United States, if any.

(e) Reports submitted by agents should include all disbursements accounted for directly by them to the foreign company at its foreign office; if subagents report through a principal agent in the same or another location, the

principal agent should file a consolidated report on behalf of the foreign company. § 802.2 Forms to be used.

Vessel operators shall report on Form BE-29, Aircraft operators shall report on Form BE-36.1

§ 802.3

Information to be furnished.

The information required for balanceof-payments purposes consists of the earnings of foreign operators from the carriage of imports into the United States and their total expenses incurred in the United States on both passenger and freight operations, including overhead. Voluntary replies to questions 5, 6, 7 and 8 on Form BE-29 (vessel operators) regarding earnings on exports and movements in accounts due to or payable from home offices of foreign branches in the United States are requested but are not required by law.

§ 802.4 Time and place of filing reports.

Reports shall be filed annually on or before March 31 of each year to cover operations of the preceding calendar year, except that a report covering operations for 1951 shall be filed on or before June 30, 1952. Reports shall be filed with the Department of Commerce, Bureau of Economic Analysis, Balance of Payments Division, Washington, D.C. 20230.

[17 FR 4922, May 30, 1952, as amended at 39 FR 44441, Dec. 24, 1974]

(i) Ownership of 25 percent or more of the voting stock of foreign corporations, either directly or together with domestic or foreign affiliates (Forms BE-577 and BE-577S). See § 803.2 (a) (1) for further detail.

(ii) Ownership of at least 10 percent, but less than 25 percent, of the voting stock of foreign corporations, or the equivalent interest in an unincorporated foreign enterprise, held either directly or together with domestic affiliates (Form BE-577A). See § 803.2(a) (1) for further detail.

(iii) Unincorporated foreign branches, or other direct foreign operations conducted by a United States incorporated interprise or other business organization in its own name in a foreign country. This includes mining claims, oil concessions, exploration and development activities or other property held by United States persons directly or jointly with others (Form BE-578). See § 803.2(a) (1) for further detail.

(2) Estates and trusts. Direct foreign investments held by a domestic estate or trust, i.e., an estate or trust created under the laws of the United States or any subdivision thereof, shall be reported by the fiduciary and not by a beneficiary. Such property must be reported whether or not any beneficiary is subject to the laws of the United States or any subdivision thereof.

(3) Persons beneficially interested in property. If direct foreign investments beneficially owned by a person subject to the jurisdiction of the United States were held by or in the name of another, only the person having the beneficial interest shall report, except as specifically provided above regarding domestic estates and trusts.