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Proposed Rule

Single Entry for Split Shipments

Document Details

Information about this document as published in the Federal Register.

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AGENCY:

Customs Service, Department of the Treasury.

ACTION:

Proposed rule.

SUMMARY:

This document proposes to amend the Customs Regulations to allow an importer of record, under certain conditions, to submit a single entry to cover multiple portions of a single shipment which was split by the carrier, and arrives in the United States separately. The proposed amendments would implement statutory changes made to the merchandise entry laws by the Tariff Suspension and Trade Act of 2000.

DATES:

Comments must be received on or before January 15, 2002.

ADDRESSES:

Written comments may be addressed to and inspected at the Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC 20229.

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FOR FURTHER INFORMATION CONTACT:

For operational or policy matters: Keith Fleming, Office of Field Operations, (202) 927-1049.

For legal matters: Larry L. Burton, Office of Regulations and Rulings, (202) 927-1287.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Background

Section 1460 of Public Law 106-476, popularly known as the Tariff Suspension and Trade Act of 2000, amended section 484 of the Tariff Act of 1930 (19 U.S.C. 1484) by adding a new paragraph (j) in order to provide for the treatment of certain multiple shipments of merchandise as a single entry.

In this latter respect, 19 U.S.C. 1484(j) is concerned with two issues. First, section 1484(j)(1) addresses a problem long encountered by the importing community in entering merchandise whose size or nature necessitates shipment in an unassembled or disassembled condition on more than one conveyance. Second, section 1484(j)(2) offers relief to importers whose shipments which they intended to be carried on a single conveyance are divided at the initiative of the carrier. As to both these matters, the legislation is silent as to the affected modes of transportation, thus indicating that the new law is to apply to merchandise shipped by air, land or sea.

The regulations proposed today relate only to shipments which are divided by carriers; these will be referred to as “split shipments”. Customs had already begun a project to amend the regulations to provide for one entry for such split shipments prior to the present statutory amendments, and it has since been determined that this effort should be completed. By a separate document that will be published in the Federal Register, Customs will propose regulations concerning the entry of shipments of unassembled or disassembled merchandise that arrive on more than one conveyance. Customs is working on that proposal, which will be published in the coming days.

It is noted that section 1484(j) includes a requirement that an importer make application in advance to obtain the single entry option. It is proposed that the importer provide written notice of the intent to file a single entry for all portions upon learning of the split shipment, but before the filing of summary.

Split Shipment Defined

Generally speaking, a split shipment consists of merchandise that is capable of being transported on a single conveyance, and that is delivered to and accepted by a carrier in the exporting country as one shipment under one bill of lading or waybill, and is thus intended by the importer to arrive as a single shipment. However, the shipment is thereafter divided by the carrier into different parts which arrive in the United States at different times, often days apart.

In practice, shipments often become split after being delivered intact to a carrier. The movement of cargo as a split shipment on multiple conveyances appears to be a regular and routine industry practice, particularly in the air environment. There are various reasons for a shipment to be split by a carrier, such as limited space, the need to balance weight distribution on a conveyance, and offloading for safety concerns. Occasionally a shipment may leave the exporting country as one shipment, but be offloaded in a second country, and then be reladen onto more than one conveyance for transport to the United States.

The Customs Regulations ordinarily require, with certain exceptions not here relevant, that all merchandise arriving on one conveyance and consigned to one consignee be included on one entry (see § 141.51, Customs Regulations (19 CFR 141.51)). There is no provision currently in the Customs Regulations authorizing the filing of a single entry to cover multiple portions of a shipment split by a carrier which then arrives in the United States at different times. While this proposed rule document would establish procedures to permit the acceptance of a single entry in the case of such a split shipment, importers may, of course, continue to file a separate entry for each portion of a split shipment as it arrives, if they so choose.

Specifically, the proposed regulations would permit the filing of a single entry to cover a split shipment provided that: (1) The subject shipment was capable of being transported on a single conveyance, and was delivered to and accepted by a carrier in the exporting country under one bill of lading or waybill and was thus intended by the importer to be a single shipment; (2) the shipment was thereafter split or deconsolidated by the carrier, acting on its own; (3) the split-portions of the shipment remain consigned to the same party in the United States to whom they were destined in the original bill of lading or waybill; and (4) those portions of the split shipment that could be covered under the entry arrived directly from abroad at the same port of importation in the United States within 10 calendar days of the date of the portion that arrived first.

Entry or Release of Merchandise

Where a single entry is accepted for multiple portions of a split shipment that arrives at different times, the legislation leaves open the question of whether the various portions of the shipment may be released as they arrive, or whether their release must be delayed until the entire shipment is reunited. Start Printed Page 57689Customs has determined to provide either option to importers of certain shipments which have been split by carriers. Under either option, the proposed regulations require the importer to file Customs Form (CF) 3461 or CF 3461 alternate (CF 3461 ALT), or electronic equivalent, which will cover all of the merchandise enumerated on the invoice, as necessary to secure its release. In particular, this data must indicate the total number of pieces in, as well as the total value of, the entire shipment as reflected on the invoice.

In the event that each portion of a split shipment is to be released upon its arrival, and prior to the arrival of the entire shipment, the procedure for releasing merchandise under a special permit for immediate delivery will be used for this purpose, as more fully outlined below. As each portion arrives, the importer must submit a copy of the CF 3461/CF 3461 ALT, adjusted to reflect the quantity of that particular portion.

Special Permit for Immediate Delivery

Customs law typically contemplates that merchandise will be imported before it is entered. This presents no problem for importers who elect to delay entry until all of the various portions of a split shipment have arrived and have been reunited within the specified time frame. However, it does raise an obstacle to allowing an entry covering an entire shipment to be filed and accepted when only a portion of the merchandise has thus far arrived. It also presents the difficult question of whether a rate of duty, set at the time of the release of the first portion, may apply to goods still outside, and not yet imported into, the United States. The proposed resolution of these latter two issues lies in requiring such shipments to be released under a special permit for immediate delivery. Section 142.21(a)-(g), Customs Regulations (19 CFR 142.21(a)-(g)), describes the circumstances and lists the types of merchandise that are currently eligible to be released under a special permit for immediate delivery.

Due to the fact that merchandise released under the special permit procedures set forth in § 142.21 is not considered to be entered until the entry/entry summary is filed, all of the merchandise contained in the split shipment will be imported by the time the entry/entry summary is filed. The rate of duty applied to the merchandise will be the rate in effect for all goods released under the immediate delivery procedures; that is, the rate in effect when the entry/entry summary is filed. An importer who objects to having the duty rate tied to the date the entry/entry summary is filed may always file a separate entry for each portion of the split shipment as it arrives. In that case, the rate of duty will generally be the duty rate in effect at the time of release, unless the importer elects otherwise (see § 141.68(a), Customs Regulations (19 CFR 141.68(a))).

Incremental Release of Split Shipment Under Immediate Delivery Procedure

It is proposed to create another category of immediate delivery releases, to be referred to as incremental release, by amending § 142.21 to add a new paragraph (g) that would allow the filing of a special permit for immediate delivery where the shipment is split by the carrier and the importer elects to have each portion of the shipment separately released as it arrives. Current paragraph (g) of § 142.21 would be redesignated as paragraph (h) and be revised consistent with proposed paragraph (g). If an entry had already been pre-filed with Customs, as allowable under § 142.2(b), Customs Regulations (19 CFR 142.2(b)), the notification to Customs by the importer of record that a single entry will be filed for shipments to be released incrementally would serve as a request that the pre-filed entry be converted to an application for a special permit for immediate delivery.

In order to secure the separate release of each split portion of a shipment following its arrival, manifest information relating to the special permit which reflects exact information for each portion of the shipment must be presented to Customs. The carrier that split or deconsolidated the shipment must present this manifest information to Customs; this may be done either electronically or on a paper manifest. The carrier must identify successive portions of the split shipment as they arrive. Customs may, however, examine any or all parts of the split shipment and would reserve the right to deny incremental release should such an examination of the merchandise be necessary.

As successive portions of the shipment arrive, these portions will be decremented against the manifested quantity, as reflected on the CF 3461/CF 3461 ALT, or electronic equivalent. This will continue for up to 10 calendar days until the total manifested quantity has arrived. Each portion of a split shipment which does not arrive within 10 calendar days of the first portion must be entered separately.

Filing of Entry Summary

Where the shipment is entered after all portions of the shipment have arrived, the entry summary must be filed within 10 working days of the time of entry. In the alternative, where the shipment is instead initially released under a special permit for immediate delivery after all portions of the shipment have arrived, the entry summary, which would serve as both the entry and the entry summary, must be filed within 10 working days after the merchandise or any part of the merchandise has been authorized for release under the special permit, or, in the case of quota class merchandise, within the quota period, whichever expires first (see §§ 142.21(e) and 142.23, Customs Regulations (19 CFR 142.21(e), 142.23)).

Under proposed § 142.21(g), in the case of a split shipment which is released incrementally under the immediate delivery procedures, the entry summary, which would serve as both the entry and the entry summary, must be filed within 10 working days from the date of the first release of a portion of the split shipment. However, under no circumstances may the entry/entry summary be filed before the last portion of the split shipment which is to be included on the entry has arrived.

At the time of filing the entry summary, estimated duties, taxes and fees would need to be attached. If the entry summary is filed electronically, the estimated duties, taxes and fees would need to be scheduled at such time for payment pursuant to the Automated Clearinghouse (see § 24.25 of this chapter).

While 19 U.S.C. 1484(j) addresses the entry of merchandise, this legislation is silent as to classification principles. It is therefore proposed that for Customs classification purposes, the separate portions of a split shipment placed on one entry be classified as if they had been imported together.

Review of Entry Data; Evidence for Splitting of Shipment

The importer of record would be responsible for reviewing the total manifested quantity shown on the CF 3461/CF 3461 ALT, or electronic equivalent, in relation to all portions of the split shipment that arrived within the specified 10 calendar day period. At the conclusion of the specified 10 calendar day period, the importer of record would have to make any adjustments necessary to reflect the actual amount, value, correct classification and rate of duty of the merchandise that was properly included Start Printed Page 57690on the CF 3461/CF 3461 ALT or electronic equivalent. As discussed above, if all portions of the split shipment did not arrive within the required 10 calendar day period, an additional entry or entries as appropriate would have to be filed to cover any remaining portions of the split shipment that subsequently arrived.

Additionally, the importer of record must maintain sufficient documentary evidence to substantiate that the splitting of the shipment was done by the carrier acting on its own, and not at the request of the foreign shipper and/or the importer of record. This documentation should include a copy of the originating bill of lading or waybill under which the shipment was delivered to the carrier in the country of exportation.

Exclusions From Split-Entry Procedure Under Proposed § 142.21(g)

Section 142.21(e) would be revised to make clear that the immediate delivery procedure under proposed § 142.21(g) that would authorize the release of each portion of a split shipment upon its arrival would not be available for merchandise that is subject to quota and/or visa requirements.

Customs also proposes to reserve the right for the port director to deny use of the incremental release procedure as circumstances warrant.

Nevertheless, in the case of quota class merchandise and other classes of merchandise excluded by Customs from incremental release as circumstances warrant, or where incremental release is denied due to Customs need to examine the merchandise, the importer may still file a single entry or special permit for immediate delivery covering the entire split shipment of the merchandise following, and to the extent of, its arrival within the required 10 calendar day period.

Accordingly, to implement 19 U.S.C. 1484(j) insofar as it enables Customs to accept a single entry for split shipments, as described, it is proposed to add a new § 141.57 to the Customs Regulations (19 CFR 141.57). Also, in addition to the proposed amendments to § 142.21, as noted, a minor conforming change would be made as well to § 141.51 of the Customs Regulations (19 CFR 141.51).

Comments

Before adopting the proposed amendments, consideration will be given to any written comments that are timely submitted to Customs. Customs specifically requests comments on the clarity of this proposed rule and how it may be made easier to understand. Comments submitted will be available for public inspection in accordance with the Freedom of Information Act (5 U.S.C. 552), § 1.4, Treasury Department Regulations (31 CFR 1.4), and § 103.11(b), Customs Regulations (19 CFR 103.11(b)), on regular business days between the hours of 9 a.m. and 4:30 p.m. at the Regulations Branch, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC.

Regulatory Flexibility Act and Executive Order 12886

The proposed rule is intended to implement the statutory law and to engender cost savings by reducing paperwork for importers, and by reducing the number of entries required for split shipments. Hence, pursuant to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), it is certified that the proposed rule, if adopted, will not have a significant economic impact on a substantial number of small entities. Accordingly, it is not subject to the regulatory analysis or other requirements of 5 U.S.C. 603 and 604. Nor does the proposed rule result in a “significant regulatory action” under E.O. 12866.

Paperwork Reduction Act

The collections of information encompassed within this proposed rule have already been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) and assigned OMB Control Numbers 1515-0065 (Requirement to make entry unless specifically exempt; Requirement to file entry summary form); 1515-0167 (Statement processing and Automated Clearinghouse); 1515-0214 (General recordkeeping and record production requirements); and 1515-0001 (Transportation manifest; cargo declaration). This rule does not propose any substantive changes to the existing approved information collections. An agency may not conduct, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number assigned by OMB.

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List of Subjects

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Proposed Amendments to the Regulations

It is proposed to amend parts 141 and 142, Customs Regulations (19 CFR parts 141 and 142), as set forth below.

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PART 141—ENTRY OF MERCHANDISE

1. The general authority citation for part 141 would continue to read as follows:

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Authority: 19 U.S.C. 66, 1448, 1484, 1624.

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2. It is proposed to revise § 141.51 to read as follows:

Quantity usually required to be in one entry.

All merchandise arriving on one conveyance and consigned to one consignee must be included on one entry, except as provided in § 141.52. In addition, a shipment of merchandise that arrives by separate conveyances at the same port of arrival in multiple portions, as a split shipment, may be processed under a single entry, as prescribed in § 141.57.

3. It is proposed to amend subpart D of part 141 by adding a new § 141.57 to read as follows:

Single entry for split shipments.

(a) At election of importer of record. At the election of the importer of record, a split shipment, pursuant to section 484(j)(2), Tariff Act of 1930 (19 U.S.C. 1484(j)(2)), may be processed under a single entry, as prescribed under the procedures set forth in this section.

(b) Split shipment defined. A “split shipment”, for purposes of this section, means a shipment:

(1) Which may be accommodated on a single conveyance, and which is delivered to and accepted by a carrier in the exporting country under one bill of lading or waybill, and is thus intended by the importer to arrive in the United States as a single shipment;

(2) Which is thereafter divided by the carrier, acting on its own, into different portions which are transported and consigned to the same party in the United States; and

(3) Of which the first portion and all succeeding portions arrive directly from foreign at the same port of importation in the United States, and all the succeeding portions arrive within 10 calendar days of the date of the first portion.

(c) Notification by importer. The importer must notify Customs, in writing, that the shipment has been split at the carrier's initiative, that the Start Printed Page 57691remainder of the shipment will arrive by subsequent conveyance(s), and that an election is being made to file a single entry for all portions. The required notification must be given as soon as the importer becomes aware that the shipment has been split, but in all cases notification must be made before the entry summary is filed.

(d) Entry or special permit for immediate delivery. In order to make a single entry for a split shipment or obtain a special permit for the release of a split shipment under immediate delivery, an importer of record may follow the procedure prescribed in paragraph (d)(1) or (d)(2) of this section, as applicable.

(1) Entry or special permit after arrival of entire shipment. An importer may file an entry at such time as all portions of the split shipment have arrived. In the alternative, again after the arrival of all portions of a split shipment, the importer may instead file a special permit for immediate delivery provided that the merchandise is eligible for such a permit under § 142.21(a)-(f) and (h) of this chapter. In either case, Customs Form (CF) 3461 or CF 3461 alternate (CF 3461 ALT) as appropriate, or electronic equivalent, must be filed with Customs. The entry or special permit must indicate the total number of pieces in, as well as the total value of, the entire shipment as reflected on the invoice.

(2) Special permit prior to arrival of entire shipment. As provided in § 142.21(g) of this chapter, an importer of record may also file a special permit for immediate delivery after the arrival of the first portion of a split shipment, but before the arrival of the entire shipment, thus qualifying the split shipment for incremental release, under paragraph (e) of this section, as each portion of the shipment arrives (see paragraph (g)(2)(ii) of this section). In such case, a CF 3461 or CF 3461 ALT as appropriate, or electronic equivalent, must be filed with Customs. As each portion arrives, the importer must submit a copy of the CF 3461/CF 3461 ALT, adjusted to reflect the quantity of that particular portion. In the event that an entry has been pre-filed with Customs (see § 142.2(b) of this chapter), notification to Customs by the importer of record that a single entry will be filed for shipments released incrementally will serve as a request that the pre-filed entry be converted to an application for a special permit for immediate delivery (see § 142.21(g) of this chapter). The special permit must indicate the total number of pieces in, as well as the total value of, the entire shipment as reflected on the invoice. The release of each portion of the split shipment upon arrival, as permitted under this paragraph, may be limited due to Customs need to examine the merchandise in accordance with paragraph (f) of this section.

(e) Release. To secure the separate release upon arrival of each portion of a split shipment under paragraph (d)(2) of this section, the carrier responsible for initially splitting the shipment must present to Customs either on a paper manifest or through an authorized electronic data interchange system manifest information relating to the shipment that reflects exact information for each portion of the split shipment.

(f) Examination. Customs examination of any or all parts of the split shipment may be required. For split shipments subject to the immediate delivery procedure of paragraph (d)(2) of this section, Customs reserves the right to deny incremental release should such an examination of the merchandise be necessary. The denial of incremental release does not preclude the use of the procedures specified in paragraph (d)(1) of this section.

(g) Entry summary—(1) Entry. For merchandise entered under paragraph (d)(1) of this section, an entry summary must be filed within 10 working days from the time of entry.

(2) Release for immediate delivery—(i) Release under paragraph (d)(1) of this section. For merchandise released under a special permit for immediate delivery pursuant to paragraph (d)(1) of this section, the entry summary, which serves as both the entry and the entry summary, must be filed within 10 working days after the merchandise or any part of the merchandise is authorized for release under the special permit or, for quota class merchandise, within the quota period, whichever expires first (see § 142.23 of this chapter).

(ii) Release under paragraph (d)(2) of this section. For merchandise released under a special permit for immediate delivery pursuant to paragraph (d)(2) of this section, the entry summary, which serves as both the entry and the entry summary, must be filed within 10 working days from the date of the first release of a portion of the split shipment. When the entry summary is filed, it must reflect all portions of the split shipment which have been released, to include quantity, value, correct classification and rate of duty. The entry summary cannot include any portions of the split shipment which have not been released.

(3) Duty payment. At the time the entry summary is filed under paragraphs (g)(1) and (g)(2)(i) and (ii) of this section, estimated duties, taxes and fees applicable to the released merchandise must be attached. If the entry summary is filed electronically, the estimated duties, taxes and fees must be scheduled for payment at such time pursuant to the Automated Clearinghouse (see § 24.25 of this chapter).

(h) Classification. For purposes of section 484(j)(2), Tariff Act of 1930 (19 U.S.C. 1484(j)(2)), the merchandise comprising the separate portions of a split shipment included on one entry will be classified as though imported together.

(i) Separate entry required. All those portions of a split shipment that do not arrive within 10 calendar days of the portion that arrived first must be entered separately.

(j) Requirement of importer to review entry and maintain evidence substantiating splitting of shipment—(1) Review of entry. The importer of record will be responsible for reviewing the total manifested quantity shown on the CF 3461/CF 3461 ALT, or electronic equivalent, in relation to all portions of the split shipment that arrived within the specified 10 calendar day period. At the conclusion of the specified 10 calendar day period, the importer of record must make any adjustments necessary to reflect the actual amount, value, correct classification and rate of duty of the merchandise that was released incrementally under the split shipment procedures. If all portions of the split shipment do not arrive within the required 10 calendar day period, an additional entry or entries as appropriate must be filed to cover any remaining portions of the split shipment that subsequently arrive (see paragraph (i) of this section).

(2) Evidence for splitting of shipment; recordkeeping. The importer of record must maintain sufficient documentary evidence to substantiate that the splitting of the shipment was done by the carrier acting on its own, and not at the request of the foreign shipper and/or the importer of record. This documentation should include a copy of the originating bill of lading or waybill under which the shipment was delivered to the carrier in the country of exportation. This documentary evidence as well as all other necessary records received or generated by or on behalf of the importer of record under this section must be maintained and produced, if requested, in accordance with part 163 of this chapter.

(k) Single entry limited; exclusions from single entry under incremental release procedure—(1) Quota/visa merchandise. Merchandise subject to Start Printed Page 57692quota and/or visa requirements is excluded from incremental release under the immediate delivery procedure set forth in paragraph (d)(2) of this section and § 142.21(g) of this chapter. Additionally, if by splitting a shipment any portion of it is subject to quota, no portion of the split shipment may be released incrementally.

(2) Other merchandise. In addition, the port director may deny the use of the incremental release procedure set forth in paragraph (d)(2) of this section and § 142.21(g) of this chapter, as circumstances warrant.

(3) Limited single entry available. For merchandise described in paragraphs (k)(1) and (k)(2) of this section, that is excluded from the immediate delivery procedure of paragraph (d)(2) of this section and § 142.21(g) of this chapter, the importer may still file a single entry or special permit for immediate delivery under paragraph (d)(1) of this section covering the entire split shipment of such merchandise following, and to the extent of, its arrival within the required 10 calendar day period.

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PART 142—ENTRY PROCESS

1. The general authority for part 142 would continue to read as follows:

Start Authority

Authority: 19 U.S.C. 66, 1448, 1484, 1624.

End Authority

2. It is proposed to amend § 142.21 as follows:

a. By removing the second sentence in paragraph (e)(1) and adding in its place two new sentences,

b. By removing the second sentence in paragraph (e)(2) and adding in its place two new sentences,

c. By redesignating paragraph (g) as paragraph (h) and adding a new paragraph (g), and

d. By revising newly redesignated paragraph (h).

The additions and revision read as follows:

Merchandise eligible for special permit for immediate delivery.
* * * * *

(e) Quota-class merchandise. (1) Tariff rate. * * * However, merchandise subject to a tariff-rate quota may not be incrementally released under a special permit for immediate delivery as provided in paragraph (g) of this section. Where a special permit is authorized, an entry summary will be properly presented pursuant to § 132.1 of this chapter within the time specified in § 142.23, or within the quota period, whichever expires first. * * *

(2) Absolute. * * * However, merchandise subject to an absolute quota under this paragraph may not be incrementally released under a special permit for immediate delivery as provided in paragraph (g) of this section. Where a special permit is authorized, a proper entry summary must be presented for merchandise so released within the time specified in § 142.23, or within the quota period, whichever expires first. * * *

* * * * *

(g) Incremental release of split shipments. Merchandise subject to § 141.57(d)(2) of this chapter, which is purchased and invoiced as a single shipment, but which is shipped by the carrier in separate portions to the same port of arrival due to the carrier's inability to accommodate the merchandise on a single conveyance, may be released incrementally under a special permit. Incremental release means releasing each portion of such shipments separately as they arrive.

(h) When authorized by Headquarters. Headquarters may authorize the release of merchandise under the immediate delivery procedure in circumstances other than those described in paragraphs (a), (b), (c), (d), (e), (f) and (g) of this section provided a bond on Customs Form 301 containing the bond conditions set forth in § 113.62 of this chapter is on file.

3. It is proposed to amend § 142.22 by removing the first sentence of paragraph (a) and adding in its place the following two sentences to read as follows:

Application for special permit for immediate delivery.

(a) Form. An application for a special permit for immediate delivery will be made on Customs Form 3461, Form 3461 ALT, or its electronic equivalent, supported by the documentation provided for in § 142.3. A commercial invoice will not be required, except for merchandise released under the provisions of 19 U.S.C. 1484(j).* * *

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Start Signature
Approved: November 7, 2001.

Charles W. Winwood,

Acting Commissioner of Customs.

Timothy E. Skud,

Acting Deputy Assistant Secretary of the Treasury.

End Signature End Part End Supplemental Information

[FR Doc. 01-28551 Filed 11-15-01; 8:45 am]

BILLING CODE 4820-02-P