ment, or destruction, or until the bonded period has expired if the merchandise has not been so accounted for before that time. When the entry is liquidated, such of the merchandise as has been withdrawn for transportation to another port shall be excluded from the liquidation. This same procedure shall be followed in the case of alcoholic beverages provided for in Schedule 1, Part 12, Tariff Schedules of the United States, and subject to internal-revenue taxes, and in the case of wool or hair. The liability for duty or tax with respect to any such quota merchandise or alcoholic beverage which has been withdrawn for transportation and delivered into customs custody at the port of destination shall be determined by a liquidation of the rewarehouse entry made in the district where the merchandise is withdrawn for consumption or for exportation.

(d) The internal revenue taxes imposed on imported tobacco materials, tobacco products, cigarette papers, and cigarette tubes under 26 U.S.C. 5701 or 7652 are determined in accordance with 26 U.S.C. 5703 at the time of removal; that is, on the quantity removed from customs custody under the entry or withdrawal for consumption. The duties unlike those on alcoholic beverages, do not necessarily apply only to such quantities. Liquidation of warehouse or rewarehouse entries of such articles shall be suspended until all such merchandise covered by the entry has been accounted for within the bonded period by withdrawal, abandonment, or destruction, or until the bonded period has expired if the merchandise has not been so accounted for before that time. The liability for duty or tax with respect to any such articles withdrawn for transportation and delivered into customs custody at the port of destination shall be determined by a liquidation of the rewarehouse entry made in the district where the merchandise is withdrawn for consumption or exportation. Any such articles so withdrawn shall be excluded from the liquidation of the original warehouse entry.

(Sec. 505, 46 Stat. 732; 19 U.S.C. 1505) [28 F.R. 14742, Dec. 31, 1963, as amended by T.D. 66-275, 31 F.R. 15645, Dec. 13, 1966]

§ 16.4 Conversion of currency.

(a) In determining the percentage of variation between the rate proclaimed by the Secretary of the Treasury and the

Federal reserve rate," the difference between the two rates shall be divided by the Federal reserve rate.

"(b) Proclaimed value basis of conversion. For the purpose of the assessment and collection of duties upon merchandise imported into the United States on or after the day of the enactment of this Act, wherever it is necessary to convert foreign currency into currency of the United States, such conversion, except as provided in subdivision (c), shall be made at the values proclaimed by the Secretary of the Treasury under the provisions of section 25 of such Act of August 27, 1894, as amended, for the quarter in which the merchandise was exported.

"(c) Market rate when no proclamation. (1) If no value has been proclaimed under subsection (a) for the quarter in which the merchandise was exported, or if the value so proclaimed varies by 5 per centum or more from a value measured by the buying rate at noon on the day of exportation, then conversion of the foreign currency involved shall be made

“(A) At a value measured by such buying rate, or

"(B) If the Secretary of the Treasury shall by regulation so prescribe with respect to the particular foreign currency, at a value measured by the buying rate first certified under this subsection for a day in the quarter in which the day of exportation falls (but only if the buying rate at noon on the day of exportation does not vary by 5 per centum or more from such first-certified buying rate).

"(2) For the purposes of this subsection, the term "buying rate" means the buying rate in the New York market for cable transfers payable in the foreign currency so to be converted. Such rate shall be determined by the Federal Reserve Bank of New York and certified to the Secretary of the Treasury, who shall make it public at such times and to such extent as he deems necessary. In ascertaining such buying rate, the Federal Reserve Bank of New York may, in its discretion

"(A) Take into consideration the last ascertainable transactions and quotations, whether direct or through exchange of other currencies, and

"(B) If there is no market buying rate for such cable transfers, calculate such rate (1) from actual transactions and quotations in demand or time bills of exchange, or (11) from the last ascertainable transactions and quotations outside the United States in or for exchange payable in United States currency or other currency.

"(3) For the purposes of this subsection, if the day of exportation is one on which banks are generally closed in New York City, then the buying rate at noon on the last preceding business day shall be considered the buying rate at noon on the day of exportation." (31 U.S.C. 372(b))

(b) The date of exportation for currency conversion shall be fixed in accordance with § 14.3 of this chapter.

(c) Whenever the Federal Reserve Bank of New York advises that its certification of rates for a currency is being suspended pending determination of the question whether it will certify multiple rates for that currency, the customs field officers will be so informed. In any case where for the purpose of the assessment and collection of duties it is necessary to determine the proper rate or rates for that currency for a date during the period of suspension of certification by the Federal Reserve Bank, appraisement shall be withheld and liquidation suspended. When certification is resumed by the Bank, the rate or rates certified will be published either in the Treasury Decisions or in Customs Information Exchange circulars. Currency information received from the Bank, or otherwise available, which might be helpful in calculating estimated duties and in appraisement and liquidation will be furnished to the customs field officers. For purposes of calculating estimated duties by the Bank, the rate or rates certified by the Bank, the collector shall use the rate or rates appearing to be applicable under the instructions in this section to the type of merchandise involved; and when it is not yet known what certified rate or rates are applicable or no rate has been certified, he shall use the highest rate or combination of rates (i.e., the rate or combination of rates showing the highest amount of United States money), certified or uncertified as the case may be, which could be applicable.

(d) For the currency of each foreign country listed at the end of this paragraph, there will be published in the Treasury Decisions, for the quarter beginning January 1, 1957, and for each quarter thereafter, the rate or rates first certified by the Federal Reserve Bank of New York for such foreign currency for a day in that quarter. The rate or rates of exchange to be used for customs purposes for any day of exportation within the quarter shall be the rate or rates so certified and published, unless the rate or rates certified by the Federal Reserve Bank for the day of exportation (1) vary by 5 per centum or more from such first certified and published rate or rates in which case notice of such variance and the rate or rates certified for such day shall be published in the Treas

EDITORIAL NOTE: For the rate of exchange in the conversion of the Luxembourg franc to be equal to the rate of exchange for the Belgian franc as certified by the Federal Reserve Bank of New York, see T.D. 56336, 30 F.R. 574, Jan. 16, 1965.

(e) When the Federal Reserve Bank of New York certifies two or more rates of exchange for the currency of any country, those rates will be published as provided in paragraphs (c) and (d) of this section. Thereafter when the appraiser and collector are in possession of sufficient information to apply the instructions in this section, they shall proceed, respectively, with the appraisement and liquidation in the case of any importation of merchandise exported on a date for which the Federal Reserve Bank of New York certifies such multiple rates, according to the following procedure:

(1) Except as prescribed in this section, no rate of exchange shall be used for customs purposes under this section other than a rate or rates certified by the Federal Reserve Bank of New York. If there is a proclaimed value of the currency involved which varies by less than 5 per cent from any certified rate otherwise applicable, such proclaimed value shall be used in lieu of such certified rate.

(2) Whenever appraisement is made in a multiple-rate currency, or the use of rates of exchange for a multiple-rate currency has been necessary in connection with the determination whether the foreign or export value is the higher, or the use of rates for a multiple-rate cur

If

rency appears involved in any other manner in the process of appraisement or liquidation, the appraiser shall include in his report to the collector an advisory statement of his views as to what type of certified rate or combination of types of certified rates is applicable to the merchandise involved. there is disagreement, which cannot be resolved locally, between the collector and appraiser as to what type of certified rate or combination of types of certified rates is applicable in a particular case, a detailed report shall be submitted to the Bureau so that appropriate instructions may be issued.

(3) For all purposes of appraisement and assessment of duties, the type of rate used for any value expressed in a currency for which two or more rates have been certified shall be the type of certified rate, designated by the Federal Reserve Bank of New York, which the appraiser or collector is satisfied, from information in his own files, information obtained and presented to him by the importer, or information obtained from other sources, is uniformly applicable under the laws and regulations of the country of exportation to the particular class of commodity on the date of exportation. In cases where two or more types of certified rates are uniformly applicable on a percentage basis, each type of certified rate shall be used for the percentage of the value to which it is applicable. The percentages used shall be those which reflect realistically the percentage for which each type of rate is uniformly applicable under the laws and regulations of the country of exportation on the date of exportation.

(4) If the appraiser or collector has credible information that the type of rate or combination of types of rates which would otherwise be applicable under subparagraph (3 of this paragraph was not required or permitted, as the case may be, under the laws and regulations of the country of exportation to be used uniformly during any period in connection with the payment for all merchandise of the type involved, appraisement shall be withheld and liquidation shall be suspended as to all merchandise of the type involved exported to the United States during the period involved.

(5) If the appraiser or collector has credible information that a type of rate or combination of types of rates not ap

plicable to payment for the merchandise was required or permitted in payment of costs, charges, or expenses, the currency conversions for the exchange covering payment for the merchandise and for the exchange covering such costs, charges, or expenses shall be calculated separately. If the costs, charges, or expenses are dutiable, they shall be calculated according to the rules stated above in this section, and in the event. that any type of rate uniformly applicable to payment of dutiable costs, charges, or expenses for merchandise of the type involved was a type of rate not. certified by the Federal Reserve Bank, appraisement shall be withheld and liquidation suspended. In deducting nondutiable costs, charges, or expenses, the foreign exchange shall be at the rate or rates actually used in payment of such costs, charges, or expenses, whether or not certified by the Federal Reserve Bank.

(f) Whenever appraisement is withheld or liquidation suspended, under paragraph (e) (4) or (5) of this section, a detailed report shall be transmited immediately to the Board.

(Secs. 505, 522, 46 Stat. 732, 739, as amended; 19 U.S.C. 1505, 31 U.S.C. 372)

§ 16.5 Weight, gauge, or measure.

(a) If any merchandise covered by a warehouse entry has been cleaned, sorted, repacked, or otherwise changed in condition under section 562, Tariff Act of 1930, as amended, before liquidation of the warehouse entry, such entry shall be liquidated and withdrawals passed on the basis of the weight, gauge, or measure of such merchandise in its manipulated condition with an appropriate notation in the duty statement that the duties are assessed on the basis of the manipulated condition of the merchandise. If the covering entry is liquidated prior to any manipulation of the merchandise, each subsequent warehouse withdrawal of manipulated merchandise shall be liquidated on the basis of the condition, quantity, and weight of the merchandise at the time of withdrawal. (See § 16.2(e).)

(b) When the amount of duty is governed in any way by the net weight of the merchandise, liquidation may be made on the net weight shown on the invoice if it is impracticable to obtain actual net weight without injury to the goods.

(c) If weighable merchandise is subject to an ad valorem rate of duty, liquidation shall be made on the basis upon which appraisement was made, as indicated by the appraiser's report.

(d) Duties and internal-revenue taxes on imported alcoholic beverages provided for in Schedule 1, Part 12, Tariff Schedules of the United States, and subject to internal-revenue taxes shall be collected only on the number of proof gallons (or wine gallons if below proof), and fractional parts thereof, entered or withdrawn for consumption. (Secs. 315, 500 (a), 505, 46 Stat. 695, as amended, 729, 732; 19 U. S. C. 1315, 1500 (a), 1505)

$16.6 Tare; dutiable weights.

(a) The net weight of merchandise dutiable by net weight, or upon a value dependent on net weight," shall be determined insofar as possible by deducting the actual or schedule tare from the gross weight. Actual tare may be determined on the basis of tests when the tares of the packages in a shipment are reasonably uniform.

(b) When the actual tare cannot reasonably be determined and no schedule tare is applicable, the invoice tare may be used in ascertaining the net weight of the merchandise.

(c) The following tares which, from experience, have proved to be the average for certain classes of merchandise shall be known as schedule tares and shall be applied, except as provided in paragraph (d) of this section:

Apple boxes. Eight pounds per box. This schedule tare includes the paper wrappers, if any, on the apples.

China clay in so-called half-ton casks. Seventy-two pounds per cask.

Figs in skeleton cases. Actual tare for outer containers plus 13 percent of the gross weight of the inside wooden boxes and figs. Fresh tomatoes. Four ounces per 100 paper wrappings.

Lemons and oranges. Ten ounces per box and 5 ounces per half box for paper wrap

"The Secretary of the Treasury is hereby authorized to prescribe and issue regulations for the ascertainment of tare upon imported merchandise, including the establishment of reasonable and just schedule tares therefor, but in no case shall there be any allowance for draft or for impurities, other than excessive moisture and impurities not usually found in or upon such or similar merchandise." (Tariff Act of 1930, sec. 507; 19 U. S. C. 1507)

pings, and actual tare for outer containers. Ocher, dry, in casks. Eight percent of the gross weight; in oil in casks: 12 percent of the gross weight.

Pimientos in tins imported from SpainDrained weights

Size can:

3 kilo-------28 OZ-------15 OZ----

7 02--------

30 pounds-case of 6 tins. 36.72 pounds-case of 24 tins.

17.72 pounds case of 24 tins.

8.62 pounds case of 24 tins. 4 OZ--------- 5.33 pounds case of 24 tins. Such schedule drained weight shall be used as the customs dutiable weight in the liquidation of entries, the difference between the weight of the net contents of pimientos in tins and such drained weight being the allowance made in liquidation for tare for water.

Sugar. (See § 13.6 of this chapter.)

Tobacco, leaf not stemmed. Thirteen pounds per bale; Sumatra: actual tare for outside coverings, plus 44 pounds for the inside matting and, if a certificate be attached to the special customs or commercial invoice certifying that the bales contain paper wrappings and specifying whether light or heavy paper has been used, either 4 or 8 ounces for the paper wrapping according to the thickness of paper used.

(d) If the importer is not satisfied with the invoice tare or with the schedule tare, or if the collector is of the opinion that the invoice or schedule tare does not correctly represent the tare of the merchandise, or if the weigher has reason to believe that the invoice or schedule tare is greater than the real tare, the actual tare shall be ascertained and in so doing the weigher shall empty and weigh as many casks, boxes, and other coverings as he may deem necessary.

(e) When it is impracticable to ascertain the actual tare, the weigher shall state in his report what, in his judgment, constitutes a fair tare allowance. (Sec. 507, 46 Stat. 732; 19 U.S.C. 1507) F.R. 14742, Dec. 31, 1963, as amended by T.D. 56213, 29 F.R. 9606, July 16, 1964; T.D. 56305, 29 F.R. 15409, Nov. 18, 1964]

[28

§ 16.7 Articles in examination packages not specified in the invoice.

When any article not corresponding with the description given in the invoice is found by the appraiser and is reported to the collector in accordance with section 499, Tariff Act of 1930, as amended, duties shall be assessed on the goods actually found, and, if the discrepancy appears conclusively to be the result of a mistake and not of any intent to defraud,

"(11) verification of packing lists or other documents filed at the time of entry, or

"(iii) evidence showing performance of commercial settlement tests generally accepted in the trade and filed in such time and manner as may be prescribed by regulations of the Secretary of the Treasury,

the commingled articles shall be subject to the highest rate of duty applicable to any part thereof unless the consignee or his agent segregates the articles pursuant to subdivision (b) hereof.

"(b) Every segregation of articles made pursuant to this headnote shall be accomplished by the consignee or his agent at the risk and expense of the consignee within 30 days (unless the Secretary authorizes in writing a longer time) after the date of personal delivery or mailing, by such employee as the Secretary of the Treasury shall designate, of written notice to the consignee that the articles are commingled and that the quantity or value of each class of articles cannot be readily ascertained by customs officers. Every such segregation shall be accomplished under customs supervision, and the compensation and expenses of the supervising customs officers shall be reimbursed to the Government by the consignee under such regulations as the Secretary of the Treasury may prescribe.

"(c) The foregoing provisions of this headnote do not apply with respect to any part

in General Headnote 7 (b), (c), or (d), Tariff Schedules of the United States, are satisfied. Evidence specified in General Headnote 7(a)(iii), Tariff Schedules of the United States shall be considered only if it is filed in the collector's office within 30 days after the date of delivery or mailing of the notice provided for in paragraph (b) of this section, except that the collector may extend such 30-day period for additional periods of 30 days each, but not beyond 6 months from the date of delivery or mailing of the notice, provided the importer or his agent makes written application for each extension and gives satisfactory reasons for its allowance.

(b) The collector shall give written notice to the consignee as promptly as possible after any commingling is discovered.

of a shipment if the consignee or his agent furnishes, in such time and manner as may be prescribed by regulations of the Secretary of the Treasury, satisfactory proof

"(1) that such part (A) is commercially negligible, (B) is not capable of segregation without excessive cost, and (C) will not be segregated prior to its use in a manufacturing process or otherwise, and

"(11) that the commingling was not intended to avoid the payment of lawful duties. Any article with respect to which such proof is furnished shall be considered for all customs purposes as a part of the article, subject to the next lower rate of duty, with which it is commingled.

"(d) The foregoing provisions of this headnote do not apply with respect to any shipment if the consignee or his agent shall furnish, in such time and manner as may be prescribed by regulations of the Secretary of the Treasury, satisfactory proof

"(1) that the value of the commingled articles is less than the aggregate value would be if the shipment were segregated;

"(11) that the shipment is not capable of segregation without excessive cost and will not be segregated prior to its use in a manufacturing process or otherwise; and

"(iii) that the commingling was not intended to avoid the payment of lawful duties.

Any merchandise with respect to which such proof is furnished shall be considered for all customs purposes to be dutiable at the rate applicable to the material present in greater quantity than any other material.

"(e) The provisions of this headnote shall apply only in cases where the schedules do not expressly provide a particular tariff treatment for commingled articles." (General Headnote 7, Tariff Schedules of the United States.)