Importing Chapter 2
ENTRY OF GOODS
2. ENTRY PROCESS
When a shipment reaches the United States, the importer of record (i.e., the owner, purchaser, or licensed customs broker designated by the owner, purchaser, or consignee) will file entry documents for the goods with the port director at the goods' port of entry. Imported goods are not legally entered until after the shipment has arrived within the port of entry, delivery of the merchandise has been authorized by Customs, and estimated duties have been paid. It is the importer of record's responsibility to arrange for examination and release of the goods.
Pursuant to 19 U.S.C. 1484, the importer of record must use reasonable care in making entry.
NOTE: In addition to contacting the U.S. Customs Service, importers should contact other agencies when questions arise about particular commodities. For example, questions about products regulated by the Food and Drug Administration should be forwarded to the nearest FDA district office (check local phone book under U.S. government listings) or to the Import Division, FDA Headquarters, 301.443.6553. The same is true for alcohol, tobacco, firearms, wildlife products (furs, skins, shells), motor vehicles, and other products and merchandise regulated by the other federal agencies for which Customs enforces entry laws. Appropriate agencies are identified in Chapter 360.
Addresses and phone numbers for these agencies are listed in the appendix.
Goods may be entered for consumption, entered for warehouse at the port of arrival, or they may be transported in bond to another port of entry and entered there under the same conditions as at the port of arrival. Arrangements for transporting the merchandise in bond to an in-land port may be made by the consignee or by a customs broker or by any other person with an interest in the goods for that purpose. Unless your merchandise arrives directly at the port where you wish to enter it, you may be charged additional fees by the carrier for transportation to that port unless other arrangements have been made. Under some circumstances, your goods may be released through your local Customs port even though they arrive at another port from a foreign country. Prior to the goods' arrival, arrangements for entry must be made at the Customs port where you intend to file your duties and documentation.
Goods to be placed in a foreign trade zone are not entered at the customhouse. See Chapter 41 for more information on foreign trade zones.
EVIDENCE OF RIGHT TO MAKE ENTRY
Goods may only be entered by their owner, purchaser, or a licensed customs broker. When the goods are consigned "to order," the bill of lading, properly endorsed by the consignor, may serve as evidence of the right to make entry. An air waybill may be used for merchandise arriving by air.
In most instances, entry is made by a person or firm certified by the carrier bringing the goods to the port of entry. This entity (i.e., the person or firm certified) is considered the "owner" of the goods for customs purposes.
The document issued by the carrier for this purpose is known as a "Carrier's Certificate." An example of this certificate is shown in the Appendix. In certain circumstances, entry may be made by means of a duplicate bill of lading or a shipping receipt. When the goods are not imported by a common carrier, possession of the goods by the importer at the time of arrival shall be deemed sufficient evidence of the right to make entry.
ENTRY FOR CONSUMPTION
Entering merchandise is a two part process consisting of: (1) filing the documents necessary to determine whether merchandise may be released from Customs custody, and (2) filing the documents that contain information for duty assessment and statistical purposes. Both of these processes can be accomplished electronically via the Automated Broker Interface program of the Automated Commercial Systems.
Within 15 calendar days of the date that a shipment arrives at a U.S. port of entry, entry documents must be filed at a location specified by the port director, unless an extension is granted. These documents are:
- Entry Manifest (Customs Form 7533) or Application and Special Permit for Immediate Delivery (Customs Form 3461) or other form of merchandise release required by the port director.
- Evidence of right to make entry.
- Commercial invoice or a pro forma invoice when the commercial invoice cannot be produced.
- Packing lists, if appropriate.
- Other documents necessary to determine merchandise admissibility.
If the goods are to be released upon entry from Customs custody, an entry summary for consumption must be filed and estimated duties deposited at the port of entry within 10 working days of the goods' entry.
The entry must be accompanied by evidence that a bond has been posted with Customs to cover any potential duties, taxes, and charges that may accrue. Bonds may be secured through a resident U.S. surety company, but may be posted in the form of United States currency or certain United States government obligations. In the event that a customs broker is employed for the purpose of making entry, the broker may permit the use of his bond to provide the required coverage.
ENTRY SUMMARY DOCUMENTATION
Following presentation of the entry, the shipment may be examined, or examination may be waived. The shipment is then released if no legal or regulatory violations have occurred. Entry summary documentation is filed and estimated duties are deposited within 10 working days of the entry of the merchandise at a designated customhouse. Entry summary documentation consists of:
- Return of the entry package to the importer, broker, or his authorized agent after merchandise is permitted release.
- Entry summary (Customs Form 7501).
- Other invoices and documents necessary to assess duties, collect statistics, or determine that all import requirements have been satisfied. This paper documentation can be reduced or eliminated by using features of the ABI.
An alternate procedure that provides for immediate release of a shipment may be used in some cases by applying for a special permit for immediate delivery on Customs Form 3461 prior to arrival of the merchandise. Carriers participating in the Automated Manifest System can receive conditional release authorizations after leaving the foreign country and up to five days before landing in the United States. If the application is approved, the shipment will be released expeditiously after it arrives. An entry summary must then be filed in proper form, either on paper or electronically, and estimated duties deposited within 10 working days of release. Immediate delivery release using Form 3461 is limited to the following types of merchandise:
ENTRY FOR WAREHOUSE
- Merchandise arriving from Canada or Mexico, if it is approved by the port director and an appropriate bond is on file.
- Fresh fruits and vegetables for human consumption arriving from Canada or Mexico and removed from the area immediately contiguous to the border and placed within the importer's premises within the port of importation.
- Shipments consigned to or for the account of any agency or officer of the U.S. government.
- Articles for a trade fair.
- Tariff rate quota merchandise and, under certain circumstances, merchandise subject to an absolute quota. Absolute-quota items require a formal entry at all times.
- In very limited circumstances, merchandise released from warehouse followed within 10 working days by a warehouse withdrawal for consumption.
- Merchandise specifically authorized by Customs Headquarters to be entitled to release for immediate delivery.
If one wishes to postpone release of the goods, they may be placed in a Customs bonded warehouse under a warehouse entry. The goods may remain in the bonded warehouse up to five years from the date of importation. At any time during that period, warehoused goods may be re-exported without paying duty, or they may be withdrawn for consumption upon paying duty at the duty rate in effect on the date of withdrawal. If the goods are destroyed under Customs supervision, no duty is payable.
While the goods are in the bonded warehouse, they may, under Customs supervision, be manipulated by cleaning, sorting, repacking, or otherwise changing their condition by processes that do not amount to manufacturing. After manipulation, and within the warehousing period, the goods may be exported without the payment of duty, or they may be withdrawn for consumption upon payment of duty at the rate applicable to the goods in their manipulated condition at the time of withdrawal. Perishable goods, explosive substances, or prohibited importations may not be placed in a bonded warehouse. Certain restricted articles, though not allowed release from custody, may be warehoused.
Information regarding bonded manufacturing warehouses is contained in section 311 of the Tariff Act (19 U.S.C. 1311).
If no entry has been filed for the goods at the port of entry, or at the port of destination for in bond shipments, within 15 calendar days after their arrival, the goods may be placed in a general order warehouse at the importer's risk and expense. If the goods are not entered within six months from the date of importation, they can be sold at public auction. Perishable goods, however, and goods subject to depreciation and explosive substances may be sold sooner.
Storage charges, expenses of sales, internal revenue or other taxes, duties, fees, and amounts for the satisfaction of liens must be taken out of the money obtained from the sale of the unentered goods. Any surplus remaining after these deductions are taken is ordinarily payable to the holder of a duly endorsed bill of lading. This bill of lading must, however, cover those goods, and the claim must be made within 10 days of the sale. Carriers, not port directors, are required to notify a bonded warehouse of unentered merchandise. Once notified, the bonded warehouse operator/manager shall arrange for the unentered merchandise to be transported to his or her premises for storage at the consignee's risk and expense. If the goods are subject to internal revenue taxes, but will not bring enough to pay the taxes if sold at public auction, they are subject to destruction.
Importers have found that in some cases it is to their advantage to use the national postal service - that is, a country's mail system, rather than courier services - to import merchandise into the United States. Some benefits to be gained are:
- Ease in clearing shipments through Customs. The duties on parcels valued at $2,000 or less are collected by the letter carrier who delivers the parcel to the addressee (see note below).
- Savings on shipping charges. Smaller, low valued packages can often be sent less expensively through the mails.
- No formal entry required on duty free merchandise not exceeding $2,000 in value.
- No need to clear shipments personally if under $2,000 in value.
Joint Customs and postal regulations provide that all parcel post packages must have a Customs declaration securely attached to the outer wrapping giving an accurate description of the contents and their value. This declaration can be obtained at post offices worldwide. Commercial shipments must also be accompanied by a commercial invoice enclosed in the parcel bearing the declaration.
Each mail parcel containing an invoice or statement of value should be marked on the outer wrapper, on the address side, "Invoice enclosed.â" If the invoice or statement cannot be conveniently enclosed within the sealed parcel, it may be securely attached to the parcel. Failure to comply with any of these requirements will delay clearance of the shipment through Customs.
Packages other than parcel post - for example, letter class mail, commercial papers, printed matter, or samples of merchandise - must bear on the address side a label, Form C1, provided by the Universal Post Union, or the endorsement "May be opened for customs purposes before delivery," or similar words definitely waiving the privacy of the seal and indicating that Customs officers may open the parcel without recourse to the addressee. Parcels not labeled or endorsed in this manner and found to contain prohibited merchandise, or containing merchandise that is subject to duty or tax, are subject to forfeiture.
A Customs officer prepares the Customs entry (a form) for mail importations not exceeding $2,000 in value, and the letter carrier at the destination delivers the parcel to the addressee upon payment of duty. If the value of a mail importation exceeds $2,000, the addressee is notified to prepare and file a formal Customs entry (also called a consumption entry) for it at the Customs port nearest him. A commercial invoice is required with the entry.
A Customs processing fee of $5.00 will be assessed on each item of dutiable mail for which a Customs officer prepares documentation. The postal carrier will collect this nominal fee on all dutiable or taxable mail along with the duty owed. There is also a postal fee (in addition to prepaid postage) authorized by international postal conventions and agreements as partial reimbursement to the Postal Service for its extra work in clearing packages through Customs and delivering them.
NOTE: The following general exceptions apply to the $2,000 limit:
Articles classified in Subchapters III and IV, Chapter 99, HTSUS
- Billfolds and other flat goods
- Feathers and feather products
- Flowers and foliage, artificial or preserved
- Fur, articles of
- Headwear and hat braids
- Leather, articles of
- Millinery ornaments
- Pillows and cushions
- Plastics, miscellaneous articles of
- Rawhides and skins
- Rubber, miscellaneous articles of
- Textile fibers and products
- Toys, games, and sports equipment
The limit for these articles is $250, except for textiles (fibers and products). Virtually all commercial shipments of textiles require formal entry, regardless of value. Unaccompanied shipments of made-to-measure suits from Hong Kong, a category that includes single suits for personal consumption, also require a formal entry regardless of the suit's value.
TRANSPORTATION OF MERCHANDISE IN BOND
Not all merchandise imported into the United States and intended for domestic commerce is entered at the port where it arrives. The importer may prefer to enter the goods at a different location in the United States, in which case the merchandise will have to be further transported to that location. In order to protect United States revenue in these cases, the merchandise must travel in a bonded status from the port of arrival to the intended port of entry. This process is referred to as traveling under Immediate Transportation procedures and is accomplished by the execution of Customs Form 7512 (Transportation Entry and Manifest of Goods Subject to Customs Inspection and Permit). The merchandise is then placed with a carrier who accepts it under its bond for transportation to the intended destination, where the normal merchandise entry process will occur.
3. RIGHT TO MAKE ENTRY
ENTRY BY IMPORTER
Merchandise arriving in the United States by commercial carrier must be entered by the owner, purchaser, his or her authorized regular employee, or by the licensed customs broker designated by the owner, purchaser, or consignee. U.S. Customs officers and employees are not authorized to act as agents for importers or forwarders of imported merchandise, although they may give all reasonable advice and assistance to inexperienced importers.
Customs brokers are the only persons who are authorized by the tariff laws of the United States to act as agents for importers in the transaction of their customs business. Customs brokers are private individuals or firms licensed by the Customs Service to prepare and file the necessary Customs entries, arrange for the payment of duties found due, take steps to effect the release of the goods in Customs custody, and otherwise represent their principals in customs matters. The fees charged for these services may vary according to the customs broker and the extent of services performed.
Every entry must be supported by one of the forms of evidence of the right to make entry outlined in this chapter. When entry is made by a customs broker, a Customs power of attorney is made in the name of the customs broker. This power of attorney is given by the person or firm for whom the customs broker is acting as agent. Ordinarily, the authority of an employee to make entry for his or her employer is established most satisfactorily by a Customs power of attorney.
ENTRIES MADE BY OTHERS
Entry of goods may be made by a nonresident individual or partnership, or by a foreign corporation through a U.S. agent or representative of the exporter, a member of the partnership, or an officer of the corporation.
The surety on any Customs bond required from a nonresident individual or organization must be incorporated in the United States. In addition, a foreign corporation in whose name merchandise is entered must have a resident agent in the state where the port of entry is located who is authorized to accept service of process in the foreign corporation's behalf.
A licensed customs broker named in a Customs power of attorney may make entry on behalf of the exporter or his representative. The owner's declaration made by a nonresident individual or organization which the customs broker may request must be supported by a surety bond providing for the payment of increased or additional duties found due. Liability for duties is discussed in Chapter 13. An owner's declaration executed in a foreign country is acceptable, but it must be executed before a notary public and bear the notary's seal. Notaries public will be found in all American embassies around the world and in most of the larger consulates.
POWER OF ATTORNEY
A nonresident individual, partnership, or foreign corporation may issue a power of attorney to a regular employee, customs broker, partner, or corporation officer to act in the United States for the nonresident employer. Any person named in a power of attorney must be a resident of the United States who has been authorized to accept service of process on behalf of the person or organization issuing the power of attorney. The power of attorney to accept service of process becomes irrevocable with respect to Customs transactions duly undertaken. Either the applicable Customs form (see Appendix) or a document using the same language as the form is acceptable. References to acts which the issuer has not authorized the agent to perform may be deleted from the form or omitted from the document. A power of attorney from a foreign corporation must be supported by the following documents or their equivalent when foreign law or practice differs from that in the United States:
- A certificate from the proper public officer of the country showing the legal existence of the corporation, unless the fact of incorporation is so generally known as to be a matter of common knowledge.
- A copy of that part of the charter or articles of incorporation which shows the scope of the corporation's business and its governing body.
- A copy of the document or part thereof by which the person signing the power of attorney derives his authority, such as a provision of the charter or articles of incorporation, a copy of the resolution, minutes of the board of directors' meeting, or other document by which the governing body conferred this authority. In this case, a copy is required of the bylaws or other document giving the governing board the authority to designate others to appoint agents or attorney.
A nonresident individual or partnership or a foreign corporation may issue a power of attorney to authorize the persons or firms named in the power of attorney to issue like powers of attorney to other qualified residents of the United States and to empower the residents to whom such powers of attorney are issued to accept service of process on behalf of the nonresident individual or organizations.
A power of attorney issued by a partnership must be limited to a period not to exceed two years from the date of execution and shall state the names of all members of the partnership. One member of a partnership may execute a power of attorney for the transaction of customs business of the partnership. When a new firm is formed by a change of membership, the prior firm's power of attorney is no longer effective for any customs purpose. The new firm will be required to issue a new power of attorney for the transaction of its customs business. All other powers of attorney may be granted for an unlimited period.
Customs Form 5291, or a document using the same language as the form, is also used to empower an agent other than an attorney-at-law or customs broker to file protests on behalf of an importer under section 514 of the Tariff Act of 1930 as amended. (See 19 CFR 141.32.)
4. EXAMINATION OF GOODS AND ENTRY DOCUMENTS
Examination of goods and documents is necessary to determine, among other things:
- The value of the goods for customs purposes and their dutiable status.
- Whether the goods must be marked with their country of origin or require special marking or labeling. If so, whether they are marked in the manner required.
- Whether the shipment contains prohibited articles.
- Whether the goods are correctly invoiced.
- Whether the goods are in excess of the invoiced quantities or a shortage exists.
- Whether the shipment contains illegal narcotics.
Prior to the goods' release, the port director will designate representative quantities for examination by Customs officers under conditions that will safeguard the goods. Some kinds of goods must be examined to determine whether they meet special requirements of the law. For example, food and beverages unfit for human consumption would not meet the requirements of the Food and Drug Administration.
One of the primary methods of smuggling narcotics into the United States is in cargo shipments. Drug smugglers will place narcotics inside a legitimate cargo shipment or container to be retrieved upon arrival in the United States. Because smugglers use any means possible to hide narcotics, all aspects of the shipment are examined, including container, pallets, boxes, and product. Only through intensive inspection can narcotics be discovered.
Textiles and textile products are considered trade sensitive and as such may be subject to a higher percentage of examinations than other commodities.
Customs officers will ascertain the quantity of goods imported, making allowances for shortages under specified conditions and assessing duty on any excess. The invoice may state the quantities in the weights and measures of the country from which the goods are shipped or in the weights and measures of the United States, but the entry must state the quantities in metric terms.
EXCESS GOODS AND SHORTAGES
In order to facilitate duty allowances for goods that do not arrive and to determine whether excess goods are contained in the shipment, the importer (or foreign exporter) is advised to pack the goods in an orderly fashion; properly mark and number the packages in which the goods are contained; list each package's contents on the invoice; and place marks and numbers on the invoices that correspond to those packages.
If the Customs officer finds any package that contains an article not specified on the invoice, and there is reason to believe the article was omitted from the invoice by fraud, gross negligence, negligence on the part of the seller, shipper, owner, or agent, a monetary penalty may be imposed, or in some cases, the merchandise may be seized or forfeited. (See e.g., 19 U.S.C. 1592.)
If, during the examination of any package that has been designated for examination, the Customs officer finds a deficiency in quantity, weight or measure, he or she will make a duty allowance for the deficiency. An allowance in duty may be made for those packages not designated as long as the importer notifies the port director of the shortage before liquidation of the entry becomes final and establishes to the port director's satisfaction that the missing goods were not delivered.
DAMAGE OR DETERIORATION
Goods that the Customs officer finds to be entirely without commercial value at the time of arrival in the United States because of damage or deterioration are treated as a "nonimportation." No duties are assessed on these goods. When damage or deterioration is present with respect to part of the shipment only, allowance in duties is not made unless the importer segregates, under Customs supervision, the damaged or deteriorated part from the remainder of the shipment. When the shipment consists of fruits, vegetables, or other perishable merchandise, allowance in duties cannot be made unless the importer, within 96 hours of unloading the merchandise and before it has been removed from the pier, files an application for an allowance with the port director. Allowance or reduction of duty for partial damage or loss as a result of rust or discoloration is precluded by law on shipments consisting of any article partially or wholly manufactured of iron or steel, or any manufacture of iron or steel.
In determining the quantity of goods dutiable on net weight, a deduction is made from the gross weight for just and reasonable tare. Tare is the allowance for a deficiency in the weight or quantity of the merchandise caused by the weight of the box, cask, bag, or other receptacle that contains the merchandise and that is weighed with it. The following schedule tares are provided for in the Customs Regulations:
Apple boxes. 3.6 kilograms (8 lb.) per box. This schedule tare includes the paper wrappers, if any, on the apples.
China clay in so-called half-ton casks. 32.6 kilograms (72 lb.) 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. 113 grams (4 oz.) per 100 paper wrappings.
Lemons and oranges. 283 grams (10 oz.) per box and 142 grams (5 oz.) per half box for paper wrappings, 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.
Pimentos in tins, imported from Spain.
Size can:Drained weights
3 kilos: 13.6 kilograms (30 lb.)-case of 6 tins
794 grams (28 oz.): 16.7 kilograms (36.7 lb.)-case of 24 tins
425 grams (15 oz.): 8.0 kilograms (17.72 lb.)-case of 24 tins
198 grams (7 oz.): 3.9 kilograms (8.62 lb.)-case of 24 tins
113 grams (4 oz.): 2.4 kilograms (5.33 lb.)-case of 24 tins
Tobacco, leaf not stemmed. 59 kilograms (13 lb.) per bale; Sumatra: actual tare for outside coverings, plus 1.9 kilograms (4 lb.) for the inside matting and, if a certificate is attached to the invoice certifying that the bales contain paper wrappings and specifying whether light or heavy paper has been used, either 113 grams (4 oz.) or 227 grams (8 oz.) for the paper wrapping according to the thickness of paper used.
For other goods dutiable on the net weight, an actual tare will be determined. An accurate tare stated on the invoice is acceptable for Customs purposes in certain circumstances.
If the importer of record files a timely application with the port director of Customs, an allowance may be made in any case for excessive moisture and impurities not usually found in or upon the particular kind of goods.
5. PACKING OF GOODSâ€”COMMINGLING
Information on how to pack goods for the purpose of transporting them may be obtained from shipping manuals, carriers, forwarding agents, and other sources. This chapter, therefore, deals with packing goods being exported in a way which will permit U.S. Customs officers to examine, weigh, measure, and release them promptly.
Orderly packing and proper invoicing go hand in hand. You will speed up the clearance of your goods through Customs if you:
- Invoice your goods in a systematic manner.
- Show the exact quantity of each item of goods in each box, bale, case, or other package.
- Put marks and numbers on each package.
- Show those marks or numbers on your invoice opposite the itemization of goods contained in the package that bears those marks and numbers.
When packages contain goods of one kind only, or when the goods are imported in packages the contents and values of which are uniform, the designation of packages for examination and the examination for Customs purposes are greatly facilitated. If the contents and values differ from package to package, the possibility of delay and confusion is increased. Sometimes, because of the kinds of goods or because of the unsystematic manner in which they are packed, the entire shipment must be examined.
Pack and invoice your goods in a manner which makes a speedy examination possible. Always bear in mind that it may not be possible to ascertain the contents of your packages without full examination unless your invoice clearly shows the marks and numbers on each package (whether box, case, or bale) and specifies the exact quantity of each item of adequately described goods in each marked and numbered package.
Also, be aware that Customs examines cargo for narcotics that may, unbeknownst to the shipper or the importer, be hidden inside. This can be time consuming and expensive for both the importer and the Customs Service. Narcotics inspections may require completely stripping a container in order to physically examine a large portion of the cargo. This labor intensive handling of cargo, whether by Customs, labor organizations, or private individuals, results in added costs, increased delays, and possible damage to the product. Importers can expedite this inspection process by working with Customs to develop packing standards that will permit effective Customs examinations with a minimum of delay, damage, and cost.
A critical aspect in facilitating inspections is how the cargo is loaded. "Palletizing" cargo "loading it onto pallets or other consolidated units-is an effective way to expedite such examinations. Palletization allows for quick cargo removal in minutes using a forklift compared to the hours it would take manually. Another example is leaving enough space at the top of a container and an aisle down the center to allow access by a narcotic detector dog.
Your cooperation in this respect will help Customs officers decide which packages must be opened and examined; how much weighing, counting, or measuring must be done, and whether the goods are properly marked. It will simplify the ascertainment of tare and reduce the number of samples to be taken for laboratory analysis or for other customs purposes. It will facilitate verification of the packages and contents, as well as the reporting by Customs officers of missing or excess goods. And it will minimize the possibility that the importer may be asked to resubmit for examination packages that were already released under the belief that the ones originally designated for examination were sufficient for that purpose.
It should thus be evident that packing which is in fact merely a combination or confusion of different types of goods makes it impracticable for Customs officers to determine the quantity of each type of product in an importation. Such packing can also lead to a variety of other complications in the entry process. No problem will arise, however, from the orderly packing of several different kinds of properly invoiced goods in a single package. It is indiscriminate packing that causes difficulty.
Except as mentioned hereafter, whenever articles subject to different rates of duty are so packed together or mingled such that Customs officers cannot readily ascertain the quantity or value of each class of articles without physical segregation of the shipment or the contents of any package thereof, the commingled articles shall be subject to the highest rate of duty applicable to any part of the commingled lot, unless the consignee or his agent segregates the merchandise under Customs supervision.
The three methods of ready ascertainment specified by General Note 17, HTSUS, are: (1) sampling, (2) verification of packing lists or other documents filed at the time of entry, or (3) evidence showing performance of commercial settlements tests generally accepted in the trade and filed in the time and manner as prescribed in the Customs Regulations.
Segregation of merchandise is at the risk and expense of the consignee. It must be done within 30 days (unless a longer time is granted) after the date of personal delivery or the date of mailing a notice to the consignee by the port director that the goods are commingled. The compensation and expenses of the Customs officers supervising the segregation must be borne by the consignee.
Assessing duty on the commingled lot at the highest applicable rate does not apply to any part of a shipment if the consignee or his agent furnishes satisfactory proof that (1) such part is commercially negligible, is not capable of segregation without excessive cost, and will not be segregated prior to its use in a manufacturing process or otherwise; and (2) the commingling was not intended to avoid the payment of lawful duties.
Any article for 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.
In addition, the highest-rate rule does not apply to any part of a shipment if satisfactory proof is furnished that (1) the value of the commingled articles is less than the aggregate value would be if the shipment were segregated; (2) 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 (3) the commingling was not intended to avoid the payment of lawful duties.
Any merchandise for 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.
The above rules do not apply if the tariff schedules provide a particular tariff treatment for commingled articles.