19 C.F.R. § 146.4

Operator responsibility and supervision

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(a) Supervision. The operator shall supervise all admissions, transfers, removals, recordkeeping, manipulations, manufacturing, destruction, exhibition, physical and procedural security, and conditions of storage in the zone as required by law and regulations. Supervision by the operator shall be that which a prudent manager of a storage, manipulation, or manufacturing facility would be expected to exercise, and may take into account the degree of supervision exercised by the zone user having physical possession of zone merchandise.

(b) Customs access. The operator shall permit any Customs officer access to a zone.

(c) Safekeeping of merchandise and records. The operator is responsible for safekeeping of merchandise and records concerning merchandise admitted to a zone. The operator, at its liability, may allow the zone importer or owner of the goods to store, safeguard, and otherwise maintain or handle the goods and the inventory records pertaining to them.

(d) Records maintenance. The operator shall (1) maintain the inventory control and recordkeeping system in accordance with the provisions of subpart B, (2) retain all records required in this part and defined in § 162.1(a) of this chapter, pertaining to zone merchandise for 5 years after the merchandise is removed from the zone, and (3) protect proprietary information in its custody from unauthorized disclosure. Records shall be readily available for Customs review at the zone.

(e) Merchandise security. The operator shall maintain the zone and establish procedures adequate to ensure the security of merchandise located in the zone in accordance with applicable Customs security standards and specifications.

(f) Storage and handling. The operator shall store and handle merchandise in a zone in a safe and sanitary manner to minimize damage to the merchandise, avoid hazard to persons, and meet local, state, and Federal requirements applicable to a specific kind of goods. All trash and waste will be promptly removed from a zone. Aisles will be established and maintained, and doors and entrances left unblocked for access by Customs officers and other persons in the performance of their official duties.

(g) Guard service. The operator is authorized to provide guards or contract for guard service to safeguard the merchandise and ensure the security of the zone. This authorization does not limit the authority of the port director to assign Customs guards to protect the revenue under section 4 of the Act (19 U.S.C. 81d).

(h) Miscellaneous responsibilities. The operator is responsible for complying with requirements for admission, manipulation, manufacture, exhibition, or destruction, shortage, or overage; inventory control and recordkeeping systems, transfer to Customs territory, and other requirements as specified in this part. If the operator elects to transfer merchandise from within the district boundaries (see definition of “district” at § 112.1) to his zone, he shall receipt for the merchandise at the time he picks it up for transportation to his facility. He becomes liable for the merchandise at that time.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 94-81, 59 FR 51496, Oct. 12, 1994; T.D. 95-77, 60 FR 50020, Sept. 27, 1995; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]

Notes of Decisions

Cited in 5 cases, 1990–2006 · leading case: United States of Am., Intrigue Trading, Inc., Claimant-Appellee v. 4,432 Mastercases of Cigarettes, More or Less, United States of Am., Intrigue Trading, Inc., Claimant-Appellant v. 4,432 Mastercases of Cigarettes, More or Less, United States of Am., Intrigue Trading, Inc., Claimant-Appellee v. 4,432 Mastercases of Cigarettes, More or Less, 448 F.3d 1168 (9th Cir. 2006).

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United States of Am., Intrigue Trading, Inc., Claimant-Appellee v. 4,432 Mastercases of Cigarettes, More or Less, United States of Am., Intrigue Trading, Inc., Claimant-Appellant v. 4,432 Mastercases of Cigarettes, More or Less, United States of Am., Intrigue Trading, Inc., Claimant-Appellee v. 4,432 Mastercases of Cigarettes, More or Less, 448 F.3d 1168 (9th Cir. 2006). “10 identify who will be performing the searches ("any Customs officer"), the object of the search ("merchandise"), the timing of searches ("at the time of admission to a zone, or at any time thereafter"), and the circumstances under which searches are allowed (only as "necessary…”

United States v. 4,432 Mastercases of Cigarettes, 448 F.3d 1168 (9th Cir. 2006). · cites it 3× “FTZ operators must “permit any Customs officer access to a zone,” 19 C.F.R. § 146.4 (b), and once on-site, those officers may examine any merchandise stored in an FTZ so long as “the examination is considered necessary to facilitate the proper administration of any law,…”

3m Health Care, Ltd. v. Richard R. Grant, Adm'r, Pharmacy Prog., Florida Dep't of Health & Rehabilitative Servs., State of Florida, 908 F.2d 918 (11th Cir. 1990). “We do not read 19 C.F.R. § 146.4 (f) (1989), as Florida suggests, to empower the state to regulate where it has no interest.”

Miami Free Zone Corp. v. United States, 826 F. Supp. 526 (Ct. Intl. Trade 1993). “In particular, Customs found that plaintiff did not adequately (1) supervise storage conditions in the FTZ, (2) safekeep merchandise admitted into the FTZ, or (3) maintain the security of the merehándise located in the FTZ as required by 19 C.F.R. § 146.4 (a), (c), (e). Customs…”

Bahr v. State, 985 P.2d 564 (Ariz. Ct. App. 1999). “19 C.F.R. § 146.4 . The operator must also maintain the zone and establish adequate security procedures to protect merchandise stored in the zone, for which purpose he may provide guards or guard services.”

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