                        TITLE 19--CUSTOMS DUTIES
 
                      CHAPTER 4--TARIFF ACT OF 1930
 
                     SUBTITLE II--SPECIAL PROVISIONS
 
                          Part I--Miscellaneous
 
Sec. 1312. Bonded smelting and refining warehouses


(a) Bond; charges against bond

    Any plant engaged in smelting or refining, or both, of metal-bearing 
materials as defined in this section may, upon the giving of 
satisfactory bond, be designated a bonded smelting or refining 
warehouse. Metal-bearing materials may be entered into a bonded smelting 
or refining warehouse without the payment of duties thereon and there 
smelted or refined, or both, together with metal-bearing materials of 
domestic or foreign origin. Upon arrival of imported metal-bearing 
materials at the warehouse they shall be sampled according to commercial 
methods and assayed, both under customs supervision. The bond shall be 
charged with a sum equal in amount to the duties which would be payable 
on such metal-bearing materials in their condition as imported if 
entered for consumption, and the bond charge shall be adjusted to 
reflect changes in the applicable rate of duty occurring while the 
imported materials are still covered by the bond.

(b) Cancellation of charges against bond

    The several charges against such bond may be canceled in whole or in 
part--
        (1) upon the exportation from the bonded warehouses which 
    treated the metal-bearing materials, or from any other bonded 
    smelting or refining warehouse, of a quantity of the same kind of 
    metal contained in any product of smelting or refining of metal-
    bearing materials equal to the dutiable quantity contained in the 
    imported metal-bearing materials less wastage provided for in 
    subsection (c) of this section; except that in the case of a 
    withdrawal for exportation of such a product to a NAFTA country, as 
    defined in section 3301(4) of this title, if any of the imported 
    metal-bearing materials are goods subject to NAFTA drawback, as 
    defined in section 3333(a) of this title, the duties on the 
    materials shall be paid, and the charges against the bond canceled, 
    before the 61st day after the date of exportation; but upon the 
    presentation, before such 61st day, of satisfactory evidence of the 
    amount of any customs duties paid to the NAFTA country on the 
    product, the duties on the materials may be waived or reduced 
    (subject to section 1508(b)(2)(B) of this title) in an amount that 
    does not exceed the lesser of--
            (A) the total amount of customs duties owed on the materials 
        on importation into the United States, or
            (B) the total amount of customs duties paid to the NAFTA 
        country on the product, or

        (2) upon payment of duties on the dutiable quantity of metal 
    contained in the imported metal-bearing materials, or
        (3) upon the transfer of the bond charges to another bonded 
    smelting or refining warehouse by physical shipment of a quantity of 
    the same kind of metal contained in any product of smelting or 
    refining of metal-bearing materials equal to the dutiable quantity 
    contained in the imported metal-bearing materials less wastage 
    provided for in subsection (c) of this section, or
        (4) upon the transfer of the bond charges to a bonded customs 
    warehouse other than a bonded smelting or refining warehouse by 
    physical shipment of a quantity of the same kind of metal contained 
    in any product of smelting or refining equal to the dutiable 
    quantity contained in the imported metal-bearing materials less 
    wastage provided for in subsection (c) of this section, and upon 
    withdrawal from such other warehouse for exportation or domestic 
    consumption the provisions of this section shall apply; except that 
    in the case of a withdrawal for exportation of such a product to a 
    NAFTA country, as defined in section 3301(4) of this title, if any 
    of the imported metal-bearing materials are goods subject to NAFTA 
    drawback, as defined in section 3333(a) of this title, the duties on 
    the materials shall be paid, and the charges against the bond 
    canceled, before the 61st day after the date of exportation; but 
    upon the presentation, before such 61st day, of satisfactory 
    evidence of the amount of any customs duties paid to the NAFTA 
    country on the product, the duties on the materials may be waived or 
    reduced (subject to section 1508(b)(2)(B) of this title) in an 
    amount that does not exceed the lesser of--
            (A) the total amount of customs duties owed on the materials 
        on importation into the United States, or
            (B) the total amount of customs duties paid to the NAFTA 
        country on the product, or

        (5) upon the transfer to another bonded smelting or refining 
    warehouse without physical shipment of metal of bond charges 
    representing a quantity of dutiable metal contained in imported 
    metal-bearing materials less wastage provided for in subsection (c) 
    of this section of the plant of initial treatment of such materials 
    provided there is on hand at the warehouse to which the transfer is 
    made sufficient like metal in any form to satisfy the transferred 
    bond charges.

If Canada ceases to be a NAFTA country and the suspension of the 
operation of the United States-Canada Free-Trade Agreement thereafter 
terminates, no charges against such bond may be canceled in whole or 
part upon an exportation to Canada under paragraph (1) or (4) during the 
period such Agreement is in operation except to the extent that the 
metal-bearing materials were of Canadian origin as determined in 
accordance with section 202 of the United States-Canada Free-Trade 
Agreement Implementation Act of 1988.

(c) Allowance on bond for wastage of metals

    For purposes of paragraphs (1), (3), (4), and (5) of subsection (b) 
of this section, due allowances shall be made for wastage of metals 
other than copper, lead, and zinc, as ascertained from time to time by 
the Secretary of the Treasury.

(d) Credit for exportation of product other than refined metal

    Upon the exportation of a product of smelting or refining other than 
refined metal the bond shall be credited with a quantity of metal 
equivalent to the quantity of metal contained in the product exported 
less the proportionate part of the deductions allowed for losses in 
determination of the bond charge being cancelled that would not 
ordinarily be sustained in production of the specific product exported 
as ascertained from time to time by the Secretary of the Treasury; 
except that in the case of a withdrawal for exportation to a NAFTA 
country, as defined in section 3301(4) of this title, if any of the 
imported metal-bearing materials are goods subject to NAFTA drawback, as 
defined in section 3333(a) of this title, charges against the bond shall 
be paid before the 61st day after the date of exportation; but upon the 
presentation, before such 61st day, of satisfactory evidence of the 
amount of any customs duties paid to the NAFTA country on the product, 
the bond shall be credited (subject to section 1508(b)(2)(B) of this 
title) in an amount not to exceed the lesser of--
        (1) the total amount of customs duties paid or owed on the 
    materials on importation into the United States, or
        (2) the total amount of customs duties paid to the NAFTA country 
    on the product.

If Canada ceases to be a NAFTA country and the suspension of the 
operation of the United States-Canada Free-Trade Agreement thereafter 
terminates, no bond shall be credited under this subsection with respect 
to an exportation of a product to Canada during the period such 
Agreement is in operation except to the extent that the product is a 
drawback eligible good under section 204(a) of the United States-Canada 
Free-Trade Agreement Implementation Act of 1988.

(e) General bond for two or more warehouses

    Two or more smelting or refining warehouses may be included under 
one general bond and the quantities of each kind of metal subject to 
duty on hand at all of such warehouses may be aggregated to satisfy the 
bond obligation.

(f) Definitions

    For purposes of this section--
        (1) the term ``metal-bearing materials'' means metal-bearing 
    ores and other metal-bearing materials provided for in chapter 26 of 
    the Harmonized Tariff Schedule of the United States, metal waste and 
    scrap and unwrought metal to be smelted or refined provided for in 
    chapters 71 through 83 of the Harmonized Tariff Schedule of the 
    United States, and metal compounds to be processed for the recovery 
    of their metal content;
        (2) the term ``smelting or refining'' embraces only 
    pyrometallurgical, hydrometallurgical, electrometallurgical, 
    chemical, or other processes--
            (A) for the treatment of metal-bearing materials to reduce 
        the metal content thereof to a metallic state in the course of 
        recovering it in forms which if imported would be classifiable 
        in chapters 71 through 83 of the Harmonized Tariff Schedule of 
        the United States as unwrought metal, or in the form of oxides 
        or other compounds which are obtained directly from the 
        treatment of materials provided for in chapter 26 of the 
        Harmonized Tariff Schedule of the United States, and
            (B) for the treatment of unwrought metal or metal waste and 
        scrap to remove impurities or undesired components; and

        (3) the term ``product of smelting or refining'' means metals or 
    metal-bearing materials resulting directly from smelting or refining 
    processes, but does not include metal-bearing ores of chapter 26 of 
    the Harmonized Tariff Schedule of the United States.

(g) Supervision and cost of labor under this section

    Labor performed and services rendered pursuant to this section shall 
be under the supervision of an officer of the customs, to be appointed 
by the Secretary of the Treasury and at the expense of the manufacturer. 
The Secretary of the Treasury is authorized to make such rules and 
regulations as may be necessary to carry out the provisions of this 
section.

(June 17, 1930, ch. 497, title III, Sec. 312, 46 Stat. 692; Pub. L. 87-
456, title III, Sec. 301(b), May 24, 1962, 76 Stat. 75; Pub. L. 100-418, 
title I, Sec. 1214(h)(1), Aug. 23, 1988, 102 Stat. 1157; Pub. L. 100-
449, title II, Sec. 204(c)(2), Sept. 28, 1988, 102 Stat. 1862; Pub. L. 
103-182, title II, Sec. 203(b)(2), Dec. 8, 1993, 107 Stat. 2088.)

                       References in Text

    Sections 202 and 204 of the United States-Canada Free-Trade 
Agreement Implementation Act of 1988, referred to in subsecs. (b) and 
(d), are sections 202 and 204 of Pub. L. 100-449, which are set out in a 
note under section 2112 of this title.
    The Harmonized Tariff Schedule of the United States, referred to in 
subsec. (f), is not set out in the Code. See Publication of Harmonized 
Tariff Schedule note set out under section 1202 of this title.


                            Prior Provisions

    Provisions similar to those in this section were contained in act 
Oct. 3, 1913, ch. 16, Sec. IV, N, subsection 1, 38 Stat. 198, which was 
superseded by act Sept. 21, 1922, ch. 356, title III, Sec. 312, 42 Stat. 
940, and repealed by section 321 thereof. Section 312 of the act of 1922 
was superseded by section 312 of act June 17, 1930, and repealed by 
section 651(a)(1) of the 1930 act.
    Provisions more or less similar were contained in the Payne-Aldrich 
Tariff Act of Aug. 5, 1909, ch. 6, Sec. 24, 36 Stat. 89, the Dingley 
Tariff Act of July 24, 1897, ch. 11, Sec. 29, 30 Stat. 210, the McKinley 
Tariff Act of Oct. 1, 1890, ch. 1244, Sec. 24, 26 Stat. 617, and the 
Wilson Tariff Act of Aug. 27, 1894, ch. 349, Sec. 21, 28 Stat. 551.
    Previous provisions for sampling lead ores were contained in act 
Mar. 2, 1895, ch. 189, Sec. 1, 28 Stat. 933, prior to repeal by act 
Sept. 21, 1922, ch. 356, title III, Sec. 321, 42 Stat. 947.


                               Amendments

    1993--Subsec. (b). Pub. L. 103-182, Sec. 203(b)(2)(B), inserted 
concluding provisions following par. (5).
    Subsec. (b)(1). Pub. L. 103-182, Sec. 203(b)(2)(A), struck out 
``(other than exportation to Canada on or after January 1, 1994, or such 
later date as may be proclaimed by the President under section 
204(b)(2)(B) of the United States-Canada Free-Trade Agreement 
Implementation Act of 1988, except to the extent that the metal-bearing 
materials were of Canadian origin as determined in accordance with 
section 202 of such Act of 1988)'' after ``upon the exportation'' and 
inserted provisions excepting goods withdrawn for exportation to a NAFTA 
country.
    Subsec. (b)(4). Pub. L. 103-182, Sec. 203(b)(2)(A), struck out 
``(other than exportation to Canada on or after January 1, 1994, or such 
later date as may be proclaimed by the President under section 
204(b)(2)(B) of the United States-Canada Free-Trade Agreement 
Implementation Act of 1988, except to the extent that the metal-bearing 
materials were of Canadian origin as determined in accordance with 
section 202 of such Act of 1988)'' after ``warehouse for exportation'' 
and inserted provisions excepting goods withdrawn for exportation to a 
NAFTA country.
    Subsec. (d). Pub. L. 103-182, Sec. 203(b)(2)(C), struck out ``(other 
than exportation to Canada on or after January 1, 1994, or such later 
date as may be proclaimed by the President under section 204(b)(2)(B) of 
the United States-Canada Free-Trade Agreement Implementation Act of 
1988, except to the extent that the product is a drawback eligible good 
under section 204(a) of such Act of 1988)'' after ``Upon the 
exportation'' and inserted before concluding period provisions excepting 
goods withdrawn for exportation to a NAFTA country, including pars. (1) 
and (2), as well as sentence relating to conditions arising should 
Canada cease to be a NAFTA country.
    1988--Subsec. (b)(1), (4). Pub. L. 100-449, Sec. 204(c)(2)(A), 
inserted ``(other than exportation to Canada on or after January 1, 
1994, or such later date as may be proclaimed by the President under 
section 204(b)(2)(B) of the United States-Canada Free-Trade Agreement 
Implementation Act of 1988, except to the extent that the metal-bearing 
materials were of Canadian origin as determined in accordance with 
section 202 of such Act of 1988)'' after ``exportation''.
    Subsec. (d). Pub. L. 100-449, Sec. 204(c)(2)(B), inserted ``(other 
than exportation to Canada on or after January 1, 1994, or such later 
date as may be proclaimed by the President under section 204(b)(2)(B) of 
the United States-Canada Free-Trade Agreement Implementation Act of 
1988, except to the extent that the product is a drawback eligible good 
under section 204(a) of such Act of 1988)'' after ``exportation''.
    Subsec. (f)(1). Pub. L. 100-418, Sec. 1214(h)(1)(A), substituted 
``chapter 26 of the Harmonized Tariff Schedule of the United States'' 
for ``schedule 6, part 1, of the Tariff Schedules of the United States'' 
and ``chapters 71 through 83 of the Harmonized Tariff Schedule of the 
United States'' for ``schedule 6, part 2, of such schedules'' and struck 
out the quotation marks surrounding ``metal waste and scrap'' and 
``unwrought metal''.
    Subsec. (f)(2)(A). Pub. L. 100-418, Sec. 1214(h)(1)(B), substituted 
``chapters 71 through 83 of the Harmonized Tariff Schedule of the United 
States'' for ``part 2 of schedule 6'' and ``chapter 26 of the Harmonized 
Tariff Schedule of the United States'' for ``part 1 of schedule 6'' and 
struck out single quotation marks surrounding ``unwrought metal''.
    Subsec. (f)(3). Pub. L. 100-418, Sec. 1214(h)(1)(C), substituted 
``of chapter 26 of the Harmonized Tariff Schedule of the United States'' 
for ``as defined in part 1 of schedule 6''.
    1962--Pub. L. 87-456 amended section generally, and among other 
changes, substituted ``metal-bearing minerals'' for ``ores or crude 
metals'', authorized adjustment of the bond charge to reflect changes in 
the applicable rate of duty occurring while the imported materials are 
still covered by the bond, permitted two or more warehouses to be 
included under one general bond, prohibited allowances for wastage of 
copper, lead, and zinc, and defined ``metal-bearing materials'', 
``smelting or refining'', and ``product of smelting or refining''.


                    Effective Date of 1993 Amendment

    Amendment by Pub. L. 103-182 applicable (1) with respect to exports 
from the United States to Canada on Jan. 1, 1996, if Canada is a NAFTA 
country on that date and after such date for so long as Canada continues 
to be a NAFTA country and (2) with respect to exports from the United 
States to Mexico on Jan. 1, 2001, if Mexico is a NAFTA country on that 
date and after such date for so long as Mexico continues to be a NAFTA 
country, see section 213(c) of Pub. L. 103-182, set out as an Effective 
Date note under section 3331 of this title.


           Effective and Termination Dates of 1988 Amendments

    Amendment by Pub. L. 100-449 effective on date the United States-
Canada Free-Trade Agreement enters into force (Jan. 1, 1989), and to 
cease to have effect on date Agreement ceases to be in force, see 
section 501(a), (c) of Pub. L. 100-449, set out in a note under section 
2112 of this title.
    Amendment by Pub. L. 100-418 effective Jan. 1, 1989, and applicable 
with respect to articles entered on or after such date, see section 
1217(b)(1) of Pub. L. 100-418, set out as an Effective Date note under 
section 3001 of this title.


                    Effective Date of 1962 Amendment

    Amendment by Pub. L. 87-456 effective with respect to articles 
entered, or withdrawn from warehouse, for consumption on or after Aug. 
31, 1963, see section 501(a) of Pub. L. 87-456.

                  Section Referred to in Other Sections

    This section is referred to in section 1508 of this title.
