dorsements required under § § 22.15 and 22.16 (c).

(e) Where it appears to the satisfaction of the Bureau, or of the collector in appropriate cases, that it is impracticable for the manufacturer or producer to keep records of all the information required for the determination of the drawback which may accrue to the products manufactured or produced by him, complementary records covering the information not available to the manufacturer or producer may be kept by the persons in the United States for whose account the products are manufactured or produced, and abstracts of such records shall be filed with the drawback entry.

(f) When identification is made against two or more lots of imported merchandise of different dutiable values or subject to different rates of duty, or against two or more lots of drawback products subject to different allowances of drawback, the drawback shall be based first upon the lot or lots of the lowest dutiable value, rate of duty, or drawback allowance, as the case may be, then upon the lot or lots of the next higher dutiable value, rate of duty, or drawback allowance, and so on from lower to higher until all the lots have been accounted for. The same principle shall apply in cases where the articles are commingled in storage after manufacture or production. If two or more lots of a fungible product are commingled in storage and quantities thereof are withdrawn for domestic consumption as well as for exportation with benefit of drawback, the withdrawals for domestic consumption shall be accounted for in the order in which the several lots of such product were placed in storage, exclusive of any lots in respect of which drawback has been allowed; and, in the case of the withdrawals for exportation, the drawback allowance thereon shall be based on the lot carrying the lowest allowance of drawback of any of the lots shown by the customs records to be unaccounted for at the time of withdrawal.

(g) The builder of a vessel or aircraft upon which drawback is to be claimed under section 313 (g), Tariff Act of 1930, shall keep the records provided for in this section so far as applicable. An abstract of such records shall be filed with the collector of customs at the headquarters port of the collection district in which the vessel or aircraft is built in ample time prior to the first departure of the vessel or aircraft from the United

States to enable that officer to have the abstract verified by examination of the vessel or aircraft and the builder's records pertaining thereto.

(h) Each manufacturer or producer shall submit to the collector of customs at the port where his drawback entries will be filed a statement in duplicate describing the methods which he will follow and the records which he will keep for the purpose of establishing that the articles upon which drawback will be claimed have been manufactured or produced in the United States with the use of imported duty-paid merchandise within the meaning of section 313(a), Tariff Act of 1930, and that the records of identification, manufacture, or production, and storage prescribed in this section have been maintained. The statement shall be submitted to the collector through the customs agent in charge who assisted in its preparation. In the case of operations under section 313 (b), (d), or (g), Tariff Act of 1930, as amended, the statement in triplicate shall be submitted through the customs agent in charge to the Commissioner of Customs. The statement shall contain an agreement to follow the methods and keep the records described therein with respect to all articles manufactured or produced for exportation with benefit of drawback. Provision for the use of duty-paid merchandise or drawback products, the manufacture or production af articles not specified in the application for the rate, or the use of factories not named therein may be included in the statement prepared as a result of such application.

(i) If drawback entries are to be liquidated at more than one headquarters port, two additional copies of the statement and of the investigating officer's report shall be required for each additional port. The procedure outlined in this and the preceding paragraph shall be followed, so far as applicable, when applications for amendments of drawback rates or supplemental statements or schedules or supplemental advisory schedules are filed in accordance with paragraph (o), (p), or (q) of this section.

(j) If the statement shows that the methods and records described therein enable the manufacturer or producer to comply with the law and regulations and if the facts developed by the investigation warrant such action, the collector in a case under section 313(a), Tariff Act of 1930, or the Bureau in a case under sec

tion 313 (b), (d), or (g), Tariff Act of 1930, as amended, will issue the rate of drawback on the articles described in the statement, except that in cases under § 22.6 the procedure in paragraphs (a) and (b) of that section shall be followed. When the statement in a case under section 313 (a), Tariff Act of 1930, shows that entries are to be filed at more than one port, the collector at the port first listed shall issue the rate, if that action is warranted.

(k) Each person who keeps complementary records as provided for in paragraph (e) of this section shall file a statement describing such records in accordance with the procedure prescribed for manufacturers and producers in paragraph (h) of this section. Such statement shall be subject to the provisions of paragraphs (i) and (j) of this section.

(1) Drawback entries may be filled covering articles exported on or after the date on which the application for establishment of the drawback rate was received by the collector or deputy collector of customs, but such entries shall not be liquidated until the rate has been established or in cases under § 22.6 the statement has been approved.

(m) When the rate has been established or the statement approved under § 22.6, drawback may be allowed on articles manufactured or produced in accordance therewith and exported on or after the effective date named therein provided all pertinent regulations have been complied with.

(n) In no case shall drawback, be allowed on articles which were exported before the date of receipt by the collector or deputy collector of the application which resulted in the preparation of the statement on which the rate or collector's letter of approval was based.

(0) When a manufacturer or producer in whose behalf a rate of drawback has been established desires to have his rate amended under section 313(a), Tariff Act of 1930, or to change his statement filed under § 22.6 to cover additional articles, to include additional factories, to permit the use of other kinds of imported duty-paid merchandise or drawback products, to provide for a different basis for the liquidation of the drawback entries, or to cover different methods of identification, manufacture, or other changes, he shall file an application therefor with the collector or deputy collector of customs. The supplemental

statement prepared as a result of such application shall be submitted through the customs agent in charge who assisted in its preparation to the collector of customs at the port where drawback entries filed under the existing rate of drawback are liquidated who shall issue the amendment, if that action is warranted. If entries are liquidated at more than one port, the supplemental statement shall identify all such ports and the collector at the port first listed shall issue the amendment. The foregoing procedure shall also apply to applications for amendments under section 313 (b), (d), or (g), Tariff Act of 1930, as amended, but the supplemental statement in such case shall be submitted through the customs agent in charge to the Commissioner of Customs, except as provided in subparagraph (1), of this paragraph. No drawback shall be allowed on articles exported before the date on which the application was received by the collector or deputy collector unless specifically authorized by the Bureau, or by the collector in cases within the provisions of § 22.6 or of this paragraph.

(1) Supplemental statements covering operations under section 313 (b), (d), or (g), Tariff Act of 1930, as amended, which are limited to (i) a change in location of the factory of the manufacturer or producer; (ii) an additional factory at which the methods followed and records maintained are the same as those at another factory operating under an existing drawback rate of the manufacturer or producer; (iii) a change in name of the manufacturer or producer; (iv) the succession by a sole proprietorship, partnership, or corporation to the drawback operations of a manufacturer or producer; or (v) any combination of the foregoing changes, shall be processed in the manner provided in this paragraph (o) for supplemental statements covering amendments under section 313 (a), Tariff Act of 1930.

(p) When a rate of drawback provides that the drawback allowance shall be determined on the basis of a schedule filed by the manufacturer or producer showing the quantity of imported material used or appearing in each unit of finished articles, and the rate authorizes the filing of supplemental schedules showing changes in the quantity of imported materials used or appearing in each unit, or different styles or capacities of containers, such supple

mental schedules shall be filed with the collector or deputy collector of customs. Drawback may be allowed on the articles covered by a supplemental schedule after it has been verified by an investigating officer and approved by the collector.

(q) In cases where the drawback allowance is determined on a quantityused or appearing-in basis, collectors of customs may request, for the information of liquidating officers in addition to the information required to be filed with the drawback entry, a supplemental advisory schedule showing the quantity of importing merchandise used or appearing in each unit of finished articles. Such schedules shall be filed with the collector or deputy collector of customs. Drawback may be allowed on articles covered by a supplemental advisory schedule after it has been verified by an investigating officer and approved by the collector.

[28 F.R. 14778, Dec. 31, 1963, as amended by T.D. 56288, 29 F.R. 14493, Oct. 22, 1964] § 22.5

Identification of imported merchandise and ascertainment of quantities for allowance of drawback when substituted merchandise is used.

(a) Articles manufactured or produced in accordance with section 313 (b), Tariff Act of 1930, as amended, shall be subject to the applicable provision of this part and the records of the manufacturer or producer shall show:

(1) The quantity, identity, kind, and quality of the duty-paid merchandise or of other articles manufactured or produced under drawback regulations (all of the foregoing hereinafter referred to as designated merchandise) designated as the basis for the allowance of drawback on the exported articles;

(2) That such designated merchandise was used in the manufacture or production of articles by the manufacturer or producer of the exported articles within 3 years after the date on which it was received by such manufacturer or producer;

(3) That the exported articles on which drawback is claimed were manufactured or produced either with the use of (i) the designated merchandise, (ii) other merchandise of the same kind and quality as the designated merchandise, or (iii) any combination of the foregoing;

(4) That the exported articles were manufactured or produced within 3

years after the date on which the designated merchandise was received by the manufacturer or producer of the exported articles;

(5) That duty-free or domestic merchandise of the same kind and quality as the designated merchandise was used by the manufacturer or producer of the exported articles within 3 years after the date on which the designated merchandise was received by such manufacturer or producer; and

(6) The quantity of merchandise of the same kind and quality as designated merchandise, used in the manufacture or production of the exported articles.

(b) When valuable wastes are incurred in manufacture or production and the manufacturer or producer has not limited his claims to the quantity of merchandise appearing in the articles manufactured or produced for exportation with benefit of drawback, the records shall show the quantity and value of the merchandise used in the manufacture or production of the articles and the quantity and value of the waste incurred in order that the deduction provided for in § 22.4(a) may be made in liquidation.

(c) Duty-paid merchandise or articles manufactured or produced under drawback regulations which have been used at one plant of a manufacturer or producer within 3 years after the date on which such material was received by such manufacturer or producer may be designated as the basis for the allowance of drawback on articles manufactured or produced in accordance with the regulations in this part at other plants of the same manufacturer or producer.

(d) Drawback shall be allowed although the exported articles are not of the same kind and quality as the articles which were manufactured or produced with the use of the designated merchandise, provided such exported articles were manufactured or produced with the use of merchandise of the same kind and quality as the designated merchandise.

(e) For purposes of compliance with paragraph (a) (2) of this section, the use of domestic crude petroleum taken in exchange for imported crude petroleum in conformity with Presidential Proclamation No. 3279 of March 10, 1959 (3 CFR, 1959 Supp.) and the Oil Import Regulations issued thereunder (32A CFR Ch. XI), shall constitute use of the imported crude petroleum, provided no certificate of delivery on customs Form

7543 is issued covering such imported crude petroleum.

§ 22.6

General drawback rates in effect; approval of drawback statements by the Bureau and by collectors.

(a) Drawback statements; filing and approval at one port. Each manufacturer or producer of articles covered by a drawback rate in this section except under paragraph (g-1), shall submit through the customs agents in charge to the collector of customs at the port where drawback entries will be filed a statement in duplicate describing the methods used in the manufacturing or production of the products involved and setting forth the records it agrees to keep for the purpose of complying with the drawback law and regulations and for providing all the data required for the proper liquidation of certificates of manufacture and drawback entries filed hereunder. If the statement shows that the methods and records described therein enable the manufacturer or producer to comply with the law and regulations and if the facts developed by the investigation so warrant, the collector shall approve the statement and promptly notify the applicant, in writing, of such action. Statements and supplemental statements relating to products covered by paragraph (g-1) shall be referred to the Bureau for approval.

(b) Drawback statements; filing and approval at more than one port. In cases where the statement provides for the filing of drawback entries at two or more ports, the statement in duplicate shall be submitted through the customs agents in charge to the collector at each of the ports named. In such case the collector at the port first listed in the statement shall approve the statement, if that action is warranted and is concurred in by the collectors at the other ports named, and shall promptly notify the applicant, in writing, of such action.

(c) Drawback statements; supplemental. Supplemental statements covering changes in statements filed under this section shall be handled in accordance with the provisions of paragraphs (a) and (b) of this section.

(d) Applicability of other drawback provisions to general rates. The allow

ance of drawback on articles covered by a drawback rate in this section shall be subject to compliance with the applicable provisions of this part.

(e) Bags and meat wrappers. Drawback may be allowed on the exportation of bags or meat wrappers manufactured with the use of imported burlap or other textile material, subject to the following special regulations:

(1) Each lot of imported material received by a manufacturer shall be given a lot number and kept separate from other lots until used. The records of the manufacturer shall show, as to each manufacturing lot or period of manufacture, the quantity of material used from each import lot and the number of each kind and size of bags or meat wrappers obtained. A certificate of manufacture shall be filed covering each manufacturing lot or period of manufacture.

(2) All bags or meat wrappers manufactured for the account of the same exporter during a specified period may be designated as one manufacturing lot and covered by one certificate of manufacture and delivery. All exported bags or meat wrappers shall be identified by the exporter with the certificate of manufacture covering their manufacture.

(3) The drawback allowance shall not exceed 99 percent of the duty paid on the imported material appearing in the exported bags or meat wrappers, unless the manufacturer desires an allowance for waste and so specifies in his statement. In such cases the records of the manufacturer shall show, in addition to the above requirements, the value of the imported material, the quantity of waste incurred in the manufacture of each lot of bags or meat wrappers, or during each period of manufacture, and the value of such waste, if any; and in liquidation the quantity of imported material which may be used as the basis for the allowance of drawback shall be reduced by the quantity of imported material which the value of the waste will replace.

(f) Sugar and sirups; substitution. Drawback may be allowed under the provisions of section 313 (b), Tariff Act of 1930, upon the exportation of hard or soft refined sugars and sirups manufactured

from raw sugar, subject to the following special regulations:

(1) The drawback allowance shall not exceed 99 percent of the duty paid on a quantity of raw sugar designated by the refiner which contains a quantity of sucrose not in excess of the quantity required to manufacture the exported sugar or sirup, ascertained in the manner hereinafter set forth.

(2) The refined sugars and sirups shall have been manufactured with use of duty-paid, duty-free, or domestic sugar, or combinations thereof, within 3 years after the date on which the designated sugar was received by the refiner, and shall have been exported within 5 years from the date of importation of the designated sugar.

(3) All granulated sugar testing by the polariscope 99.5° and over shall be deemed hard refined sugar. All refined sugar testing by the polariscope less than 99.5° shall be deemed soft refined sugar. All "blackstrap," "unfiltered sirup," and "final molasses" shall be deemed sirup.

(4) The imported duty-paid sugar selected by the refiner as the basis for the drawback claim (designated sugar) shall be of the same kind and quality as that used in the manufacture of the exported refined sugar or sirup and shall have been used within 3 years after the date on which it was received by the refiner. Duty-paid sugar which has been used at a plant of a refiner within 3 years after the date on which it was received by such refiner may be designated as the basis for the allowance of drawback on refined sugars or sirups manufactured at another plant of the same refiner.

(5) For the purpose of distributing the drawback in accordance with the provisions of section 313, Tariff Act of 1930, relative values shall be established between hard refined (granulated) sugar, soft refined (various grades) sugar, and sirups at the time of separation. The entire period covered by an abstract shall be deemed the time of separation of the sugars and sirups covered by such abstract.

(6) The sucrose allowance per pound on hard refined (granulated) sugar established by the liquidation of an abstract shall be applied to hard refined sugar commercially known as loaf, cut loaf, cube, pressed, crushed, or powdered

sugar manufactured from the granulated sugar covered by the abstract.

(7) The sucrose allowance per gallon on sirup established by the liquidation of an abstract shall be applied to sirup further advanced in value by filtration or otherwise, unless such sirup is the subject of a special drawback rate.

(8) As to each lot of imported or domestic sugar used in the manufacture of refined sugar or sirup on which drawback is to be claimed, the raw stock records shall show the refiner's raw lot number, the number and character of the packages, the settlement weight in pounds, and the settlement polarization. Such records covering imported sugar shall show, in addition to the foregoing, the import entry number, date of importation, name of importing carrier, country of origin, the Government weight, and the Government polarization.

(9) The melt records shall show the date of melting, the number of pounds of each lot of raw sugar melted, and the full analysis at melting.

(10) There shall be kept a daily record of final products boiled showing the date of the melt, the date of boiling, the magma filling serial number, the number of the vacuum pan or crystallizer filling, the date worked off, and the sirup filling serial number.

(11) The sirup manufacture records shall show the date of boiling, the period of the melt, the sirup filling serial number, the number of barrels in the filling, the magma filling serial number, the quantity of sirup, its disposition in tanks or barrels, and the refinery serial manufacture number.

(12) The refined sugar stock records shall show the refinery serial manufacture number, the period of the melt, the date of manufacture, the grade of sugar produced, its polarization, the number and kind of packages, and the net weight. When soft sugars are manufactured, the commercial grade number and quantity of each shall be shown.

(13) Each lot of hard or soft refined sugar and each lot of sirup manufactured, regardless of the character of the containers or vessels in which it is packed or stored, shall be marked im