                        TITLE 19--CUSTOMS DUTIES
 
                      CHAPTER 4--TARIFF ACT OF 1930
 
                 SUBTITLE III--ADMINISTRATIVE PROVISIONS
 
     Part IV--Transportation in Bond and Warehousing of Merchandise
 
Sec. 1555. Bonded warehouses


(a) Designation; preconditions; bonding requirements; supervision

    Subject to subsection (b) of this section, buildings or parts of 
buildings and other enclosures may be designated by the Secretary of the 
Treasury as bonded warehouses for the storage of imported merchandise 
entered for warehousing, or taken possession of by the appropriate 
customs officer, or under seizure, or for the manufacture of merchandise 
in bond, or for the repacking, sorting, or cleaning of imported 
merchandise. Such warehouses may be bonded for the storing of such 
merchandise only as shall belong or be consigned to the owners or 
proprietors thereof and be known as private bonded warehouses, or for 
the storage of imported merchandise generally and be known as public 
bonded warehouses. Before any imported merchandise not finally released 
from customs custody shall be stored in any such premises, the owner or 
lessee thereof shall give a bond in such sum and with such sureties as 
may be approved by the Secretary of the Treasury to secure the 
Government against any loss or expense connected with or arising from 
the deposit, storage, or manipulation of merchandise in such warehouse. 
Except as otherwise provided in this chapter, bonded warehouses shall be 
used solely for the storage of imported merchandise and shall be placed 
in charge of a proper officer of the customs, who, together with the 
proprietor thereof, shall have joint custody of all merchandise stored 
in the warehouse; and all labor on the merchandise so stored shall be 
performed by the owner or proprietor of the warehouse, under supervision 
of the officer of the customs in charge of the same, at the expense of 
the owner or proprietor. The compensation of such officer of the customs 
and other customs employees appointed to supervise the receipt of 
merchandise into any such warehouse and deliveries therefrom shall be 
reimbursed to the Government by the proprietor of such warehouse.

(b) Duty-free sales enterprises

    (1) Duty-free sales enterprises may sell and deliver for export from 
the customs territory duty-free merchandise in accordance with this 
subsection and such regulations as the Secretary may prescribe to carry 
out this subsection.
    (2) A duty-free sales enterprise may be located anywhere within--
        (A) the same port of entry, as established under section 1 of 
    the Act of August 24, 1912 (37 Stat. 434), from which a purchaser of 
    duty-free merchandise departs the customs territory; or
        (B) 25 statute miles from the exit point through which the 
    purchaser of duty-free merchandise will depart the customs 
    territory; or
        (C) a port of entry, as established under section 1 of the Act 
    of August 24, 1912 (37 Stat. 434), or within 25 statute miles of a 
    staffed port of entry if reasonable assurance can be provided that 
    duty-free merchandise sold by the enterprise will be exported by 
    individuals departing from the customs territory through an 
    international airport located within the customs territory.

    (3) Each duty-free sales enterprise--
        (A) shall establish procedures to provide reasonable assurance 
    that duty-free merchandise sold by the enterprise will be exported 
    from the customs territory;
        (B) if the duty-free sales enterprise is an airport store, shall 
    establish and enforce, in accordance with such regulations as the 
    Secretary may prescribe, restrictions on the sale of duty-free 
    merchandise to any one individual to personal use quantities;
        (C) shall display in prominent places within its place of 
    business notices which state clearly that any duty-free merchandise 
    purchased from the enterprise--
            (i) has not been subject to any Federal duty or tax,
            (ii) if brought back into the customs territory, must be 
        declared and is subject to Federal duty and tax, and
            (iii) is subject to the customs laws and regulation of any 
        foreign country to which it is taken;

        (D) shall not be required to mark or otherwise place a 
    distinguishing identifier on individual items of merchandise to 
    indicate that the items were sold by a duty-free sales enterprise, 
    unless the Secretary finds a pattern in which such items are being 
    brought back into the customs territory without declaration;
        (E) may unpack merchandise into saleable units after it has been 
    entered for warehouse and placed in a duty-free sales enterprise, 
    without requirement of further permits; and
        (F) shall deliver duty-free merchandise--
            (i) in the case of a duty-free sales enterprise that is an 
        airport store--
                (I) to the purchaser (or a family member or companion 
            traveling with the purchaser) in an area that is within the 
            airport and to which access to passengers is restricted to 
            those departing from the customs territory;
                (II) to the purchaser (or a family member or companion 
            traveling with the purchaser) at the exit point of a 
            specific departing flight;
                (III) by placing the merchandise within the aircraft on 
            which the purchaser will depart for carriage as passenger 
            baggage; or
                (IV) if the duty-free sales enterprise has made a good 
            faith effort to effect delivery for exportation through one 
            of the methods described in subclause (I), (II), or (III) 
            but is unable to do so, by any other reasonable method to 
            effect delivery; or

            (ii) in the case of a duty-free sales enterprise that is a 
        border store--
                (I) at a merchandise storage location at or beyond the 
            exit point; or
                (II) at any location approved by the Secretary before 
            the date of enactment of the Omnibus Trade Act of 1987.

    (4) If a State or local or other governmental authority, incident to 
its jurisdiction over any airport, seaport, or other exit point 
facility, requires that a concession or other form of approval be 
obtained from that authority with respect to the operation of a duty-
free sales enterprise under which merchandise is delivered to or through 
such facility for exportation, merchandise incident to such operation 
may not be withdrawn from a bonded warehouse and transferred to or 
through such facility unless the operator of the duty-free sales 
enterprise demonstrates to the Secretary that the concession or approval 
required for the enterprise has been obtained.
    (5) This subsection does not prohibit a duty-free sales enterprise 
from offering for sale and delivering to, or on behalf of, individuals 
departing from the customs territory merchandise other than duty-free 
merchandise, except that such other merchandise may not be stored in a 
bonded warehouse facility other than a bonded facility used for retail 
sales.
    (6)(A) Except as provided in subparagraph (B), merchandise that is 
purchased in a duty-free sales enterprise is not eligible for exemption 
from duty under subchapter IV of chapter 98 of the Harmonized Tariff 
Schedule of the United States if such merchandise is brought back to the 
customs territory.
    (B) Except in the case of travel involving transit to, from, or 
through an insular possession of the United States, merchandise 
described in subparagraph (A) that is purchased by a United States 
resident shall be eligible for exemption from duty under subheadings 
9804.00.65, 9804.00.70, and 9804.00.72 of the Harmonized Tariff Schedule 
of the United States upon the United States resident's return to the 
customs territory of the United States, if the resident meets the 
eligibility requirements for the exemption claimed. Notwithstanding any 
other provision of law, such merchandise shall be considered to be an 
article acquired abroad as an incident of the journey from which the 
resident is returning, for purposes of determining eligibility for any 
such exemption.
    (7) The Secretary shall by regulation establish a separate class of 
bonded warehouses for duty-free sales enterprises. Regulations issued to 
carry out this paragraph shall take into account the unique 
characteristics of the different types of duty-free sales enterprises.
    (8) For purposes of this subsection--
        (A) The term ``airport store'' means a duty-free sales 
    enterprise which delivers merchandise to, or on behalf of, 
    individuals departing from the customs territory from an 
    international airport located within the customs territory.
        (B) The term ``border store'' means a duty-free sales enterprise 
    which delivers merchandise to, or on behalf of, individuals 
    departing from the customs territory through a land or water border 
    by a means of conveyance other than an aircraft.
        (C) The term ``customs territory'' means the customs territory 
    of the United States and foreign trade zones.
        (D) The term ``duty-free sales enterprise'' means a person that 
    sells, for use outside the customs territory, duty-free merchandise 
    that is delivered from a bonded warehouse to an airport or other 
    exit point for exportation by, or on behalf of, individuals 
    departing from the customs territory.
        (E) The term ``duty-free merchandise'' means merchandise sold by 
    a duty-free sales enterprise on which neither Federal duty nor 
    Federal tax has been assessed pending exportation from the customs 
    territory.
        (F) The term ``exit point'' means the area in close proximity to 
    an actual exit for departing from the customs territory, including 
    the gate holding area in the case of an airport, but only if there 
    is reasonable assurance that duty-free merchandise delivered in the 
    gate holding area will be exported from the customs territory.
        (G) The term ``personal use quantities'' means quantities that 
    are only suitable for uses other than resale, and includes 
    reasonable quantities for household or family consumption as well as 
    for gifts to others.

(c) International travel merchandise

                           (1) Definitions

        For purposes of this section--
            (A) the term ``international travel merchandise'' means 
        duty-free or domestic merchandise which is placed on board 
        aircraft on international flights for sale to passengers, but 
        which is not merchandise incidental to the operation of a duty-
        free sales enterprise;
            (B) the term ``staging area'' is an area controlled by the 
        proprietor of a bonded warehouse outside of the physical 
        parameters of the bonded warehouse in which manipulation of 
        international travel merchandise in carts occurs;
            (C) the term ``duty-free merchandise'' means merchandise on 
        which the liability for payment of duty or tax imposed by reason 
        of importation has been deferred pending exportation from the 
        customs territory;
            (D) the term ``manipulation'' means the repackaging, 
        cleaning, sorting, or removal from or placement on carts of 
        international travel merchandise; and
            (E) the term ``cart'' means a portable container holding 
        international travel merchandise on an aircraft for exportation.

      (2) Bonded warehouse for international travel merchandise

        The Secretary shall by regulation establish a separate class of 
    bonded warehouse for the storage and manipulation of international 
    travel merchandise pending its placement on board aircraft departing 
    for foreign destinations.

    (3) Rules for treatment of international travel merchandise 
                   and bonded warehouses and staging areas

        (A) The proprietor of a bonded warehouse established for the 
    storage and manipulation of international travel merchandise shall 
    give a bond in such sum and with such sureties as may be approved by 
    the Secretary of the Treasury to secure the Government against any 
    loss or expense connected with or arising from the deposit, storage, 
    or manipulation of merchandise in such warehouse. The warehouse 
    proprietor's bond shall also secure the manipulation of 
    international travel merchandise in a staging area.
        (B) A transfer of liability from the international carrier to 
    the warehouse proprietor occurs when the carrier assigns custody of 
    international travel merchandise to the warehouse proprietor for 
    purposes of entry into warehouse or for manipulation in the staging 
    area.
        (C) A transfer of liability from the warehouse proprietor to the 
    international carrier occurs when the bonded warehouse proprietor 
    assigns custody of international travel merchandise to the carrier.
        (D) The Secretary is authorized to promulgate regulations to 
    require the proprietor and the international carrier to keep records 
    of the disposition of any cart brought into the United States and 
    all merchandise on such cart.

(June 17, 1930, ch. 497, title IV, Sec. 555, 46 Stat. 743; Pub. L. 91-
271, title III, Sec. 301(b), June 2, 1970, 84 Stat. 287; Pub. L. 98-573, 
title II, Sec. 211, Oct. 30, 1984, 98 Stat. 2977; Pub. L. 100-418, title 
I, Sec. 1908(b), Aug. 23, 1988, 102 Stat. 1315; Pub. L. 101-382, title 
I, Sec. 139(a)(1), Aug. 20, 1990, 104 Stat. 653; Pub. L. 104-295, 
Sec. 29, Oct. 11, 1996, 110 Stat. 3535; Pub. L. 106-36, title II, 
Sec. 2417, June 25, 1999, 113 Stat. 176; Pub. L. 106-476, title I, 
Sec. 1454, Nov. 9, 2000, 114 Stat. 2168.)

                       References in Text

    For provisions relating to ports of entry established under section 
1 of the Act of August 24, 1912 (37 Stat. 434), referred to in subsec. 
(b)(2)(A), (C), see Prior Provisions note under section 1 of this title.
    The date of enactment of the Omnibus Trade Act of 1987, referred to 
in subsec. (b)(3)(F)(ii)(II), probably means the date of enactment of 
the Omnibus Trade and Competitiveness Act of 1988, Pub. L. 100-418, 
which was approved Aug. 23, 1988.
    The Harmonized Tariff Schedule of the United States, referred to in 
subsec. (b)(6), 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 
Sept. 21, 1922, ch. 356, title IV, Sec. 555, 42 Stat. 976. That section 
was superseded by section 555 of act June 17, 1930, comprising this 
section, and repealed by section 651(a)(1) of the 1930 act.
    Prior provisions dealing with the subject matter of this section 
were contained in R.S. Sec. 2958, authorizing cellars and vaults of 
stores for storage of wines and distilled spirits, and yards for storage 
of coal, etc., to be constituted bonded warehouses; section 2959, 
authorizing parts of buildings to be bonded for the storage of grain; 
section 2960, requiring private warehouses to be used solely for the 
storage of warehoused merchandise, and be approved by the Secretary of 
the Treasury, and be in charge of a proper officer of the customs, etc.; 
section 2961 requiring bonds to hold the United States harmless, and 
providing that imports deposited in warehouses should be at the risk and 
expense of the owner or importer; section 2968, authorizing the 
extension of warehouse privileges to the port of Albany; and section 
2988, as amended by act Feb. 27, 1877, ch. 69, Sec. 1, 19 Stat. 247, 
requiring collectors to make reports of merchandise in warehouses. All 
of these sections were repealed by act Sept. 21, 1922, ch. 356, title 
IV, Sec. 642, 42 Stat. 989.


                               Amendments

    2000--Subsec. (c). Pub. L. 106-476 added subsec. (c).
    1999--Subsec. (b)(2)(B), (C). Pub. L. 106-36 substituted ``; or'' 
for period at end of subpar. (B) and added subpar. (C).
    1996--Subsec. (b)(6). Pub. L. 104-295 designated existing provisions 
as subpar. (A), substituted ``Except as provided in subparagraph (B), 
merchandise'' for ``Merchandise'', and added subpar. (B).
    1990--Subsec. (b)(6). Pub. L. 101-382, which directed substitution 
of ``subchapter IV of chapter 98 of the Harmonized Tariff Schedule of 
the United States'' for ``subpart A of part 2 of schedule 8 of the 
Tariff schedules of the United States'', was executed by making the 
substitution for ``subpart A of part 2 of schedule 8 of the Tariff 
Schedules of the United States'' to reflect the probable intent of 
Congress.
    1988--Subsec. (b). Pub. L. 100-418 amended subsec. (b) generally. 
Prior to amendment, subsec. (b) read as follows: ``If a State or local 
governmental authority, incident to its jurisdiction over any airport, 
seaport, or other exit point facility, requires that a concession or 
other form of approval be obtained from that authority with respect to 
the operation of a duty-free sales enterprise under which merchandise is 
delivered to such facility for exportation, merchandise incident to such 
operation may not be withdrawn from a bonded warehouse and transferred 
to such facility unless the operator of the duty-free sales enterprise 
demonstrates to the Secretary of the Treasury that the concession or 
approval required for the enterprise has been obtained. For purposes of 
this subsection, the term `duty-free sales enterprise' means an entity 
that sells, in less than wholesale quantities, duty-free or tax-free 
merchandise that is delivered from a bonded warehouse to an airport, 
seaport, or point of exit from the United States for exportation by, or 
on behalf of, individuals departing from the United States.''
    1984--Pub. L. 98-573 designated existing provisions as subsec. (a), 
substituted ``Subject to subsection (b) of this section, buildings'' for 
``Buildings'', and added subsec. (b).
    1970--Pub. L. 91-271 substituted reference to appropriate customs 
officer for reference to collector.


                    Effective Date of 2000 Amendment

    Amendment by Pub. L. 106-476, except as otherwise provided, 
applicable with respect to goods entered, or withdrawn from warehouse, 
for consumption, on or after the 15th day after Nov. 9, 2000, see 
section 1471 of Pub. L. 106-476, set out as a note under section 58c of 
this title.


                    Effective Date of 1988 Amendment

    Section 1908(c) of Pub. L. 100-418 provided that: ``The amendment 
made by this section [amending this section] shall take effect on the 
date that is 15 days after the date of enactment of this Act [Aug. 23, 
1988].''


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-573 effective on 15th day after Oct. 30, 
1984, see section 214(a), (b) of Pub. L. 98-573, set out as a note under 
section 1304 of this title.


                    Effective Date of 1970 Amendment

    For effective date of amendment by Pub. L. 91-271, see section 203 
of Pub. L. 91-271, set out as a note under section 1500 of this title.


                  Duty-Free Sales Enterprises; Findings

    Section 1908(a) of Pub. L. 100-418 provided that: ``The Congress 
finds that--
        ``(1) duty-free sales enterprises play a significant role in 
    attracting international passengers to the United States and thereby 
    their operations favorably affect our balance of payments;
        ``(2) concession fees derived from the operations of authorized 
    duty-free sales enterprises constitute an important source of 
    revenue for the State, local and other governmental authorities that 
    collect such fees;
        ``(3) there is inadequate statutory and regulatory recognition 
    of, and guidelines for the operation of, duty-free sales 
    enterprises; and
        ``(4) there is a need to encourage uniformity and consistency of 
    regulation of duty-free sales enterprises.''

                  Section Referred to in Other Sections

    This section is referred to in section 58c of this title; title 18 
section 2341; title 49 section 47107.
