ARTICLES MANUFACTURED OR PRODUCED WHOLLY
OR IN PART FROM IMPORTED OR SUBSTITUTED
MERCHANDISE

Art. 1018. Drawback authorized. (a) Tariff act of 1930, section 313 (a):

Upon the exportation of articles manufactured or produced in the United States with the use of imported merchandise, the full amount of the duties paid upon the merchandise so used shall be refunded as drawback, less 1 per centum of such duties, except that such duties shall not be so refunded upon the exportation of flour or by-products produced from wheat imported after ninety days after the date of the enactment of this act.

* * *

(b) Tariff act of 1930, section 313 (f):

Upon the exportation of meats, whether packed or smoked, which have been cured in the United States with imported salt, there shall be refunded, upon satisfactory proof that such meats have been cured with imported salt, the duties paid on the salt so used in curing such exported meats, in amounts not less than $100.

(c) Tariff act of 1930, section 313 (g):

The provisions of this section shall apply to materials imported and used in the construction and equipment of vessels built for foreign account and ownership, or for the government of any foreign country, notwithstanding that such vessels may not within the strict meaning of the term be articles exported.

This provision of law applies only to material used in the original construction and equipment of the vessels and not to material used in altering or repairing the same.

The term "foreign account and ownership" includes only vessels built and equipped for the account of the owner or owners residing in a foreign country for the purpose and with a bona fide intention that the vessel shall, when completed, become a vessel of a foreign country owned and operated under the flag of a foreign country.

(d) Tariff act of 1930, section 313 (h):

No drawback shall be allowed under the provisions of this section or of section 6 of the act entitled "An act temporarily to provide

revenue for the Philippine Islands, and for other purposes," approved March 8, 1902 (relating to drawback on shipments to the Philippine Islands), unless the completed article is exported, or shipped to the Philippine Islands, within three years after importation of the imported merchandise.

(e) Tariff act of 1930, section 313 (i):

The Secretary of the Treasury is authorized to prescribe regulations governing (1) the identification of imported merchandise used in the manufacture or production of articles entitled to drawback of customs duties, the ascertainment of the quantity of such merchandise used, of the time when such merchandise was received by the manufacturer or producer of the exported articles, and of the amount of duties paid thereon, the determination of the facts of the manufacture or production of such articles in the United States and their exportation therefrom, the time within which drawback entries on such articles shall be filed and completed, to entitle such articles to drawback, and the payment of drawback due thereon; (2) the identification of merchandise withdrawn for consumption and returned to customs custody for exportation, the determination of the facts of nonconformity thereof to sample or specifications and of exportation thereof from the United States, and the payment of the drawback due thereon; (3) the determination and payment of drawback of internal-revenue tax on domestic alcohol, including the requirement of such notices, bonds, bills of lading, and other evidence of payment of tax and exportation as the Secretary of the Treasury deems necessary; (4) the remission of duties on imported salt used in curing fish, including the production of proof that the salt has been so used; and (5) the refunding of duties paid upon imported salt used in curing exported meats, including the production of proof that the salt has been so used; and designating the person to whom refund or payment of drawback shall be made.

Art. 1019. Exportation-United States possessions.(a) United States Code, title 19, section 152:

* * Where materials on which duties have been paid are used in the manufacture of articles manufactured or produced in the United States, there shall be allowed on the shipment of said articles to the Philippine Archipelago, a drawback equal in amount to the duties paid on the materials used, less 1 per centum of such duties, under such rules and regulations as the Secretary of the Treasury may prescribe. (March 8, 1902, ch. 140, sec. 6, 32 Stat. 55.)

Drawback will be paid on articles shipped to the Philippine Islands only upon the receipt of a certificate signed by the collector of customs of the said islands, showing either the payment of duty on the merchandise at the port of entry or that it is provided for in the free list of the Philippine tariff.

(b) The Panama Canal Zone is considered foreign territory for the purpose of the drawback law.

22198, 22341, 33898,

(c) There is no authority of law for the payment of T. Ds. 22157, drawback of customs duty on articles manufactured or 38059. produced in the United States which are shipped to Alaska, Porto Rico, Hawaii, the Virgin Islands, American Samoa, or the island of Guam."

Art. 1020. Identification of imported merchandise and ascertainment of quantities entitled to drawback.—

The records to be kept and the methods to be pursued for the purpose of identification of the imported merchandise and the ascertainment of the quantities used will be prescribed by the Secretary of the Treasury in each case in the drawback rate and must be agreed to by the manufacturer or producer in a sworn statement to be filed as the basis for such rate.

Art. 1021. Same-When substituted material is used(a) Tariff act of 1930, section 313 (b):

If imported duty-paid sugar or nonferrous metal, or ore containing nonferrous metal, and duty free or domestic merchandise of the same kind and quality are used in the manufacture or production of articles within a period not to exceed one year from the receipt of such imported merchandise by the manufacturer or producer of such articles, there shall be allowed upon the exportation (or shipment to the Philippine Islands) of any such articles, notwithstanding the fact that none of the imported merchandise may actually have been used in the manufacture or production of the exported articles, an amount of drawback equal to that which would have been allowable had the sugar or nonferrous metal, or ore containing nonferrous metal, used therein been imported; but the total amount of drawback allowed upon the exportation of such articles, together with the total amount of drawback allowed in respect of such imported merchandise under any other provision of law, shall not exceed 99 per centum of the duty paid on such imported merchandise.

(b) Articles which are manufactured with the use of sugar or nonferrous metals under this provision of law will be subject to the following conditions:

(1) The exported articles must have been manufactured in accordance with the regulations on or after June 18, 1930, the effective date of the tariff act of 1930.

(2) Sugar or nonferrous metals imported before the effective date of the tariff act of 1930, may be designated as the basis for the allowance of drawback on articles manufactured under this provision of law, provided such sugar or nonferrous metals were used on and after June 18, 1930, and within one year from the date they were received by the manufacturer.

(3) Duty-paid sugar or nonferrous metal which has been used at one plant of a given manufacturer within one year from its receipt may be designated as the basis for the allowance of drawback on articles manufactured under the prescribed conditions at other plants of the same manufacturer.

(4) It is not necessary that the exported article be of the same kind as the article which was produced with the use of the imported material desig

nated by the manufacturer as the basis for the allowance of drawback on the exported article. It is necessary, however, that the exported article shall have been manufactured with the use of material of the same kind and quality as the imported material designated, and that the records establish the quantity of the imported designated material which would have been required to produce the exported article.

(c) The privilege of substitution is extended to the above articles used in further manufactures or productions. (d) Where substituted material is used, the require ments of these regulations with respect to the filing of applications for the establishment of a rate of drawback, timely notices of intent, completion of claims, and so on, shall be complied with in all respects as if the exported articles were manufactured or produced with the use of imported material.

Art. 1022. Drawback rates-Establishment of (a) Each manufacturer or producer of articles which are to be exported with benefit of drawback must make application to the Bureau of Customs, prior to the exportation of such articles, for the establishment of a rate of drawback.

(b) In the case of a vessel the application shall be filed in ample time to permit inspection of the vessel prior to its departure and a sworn abstract from such record shall be filed with the collector of customs at the headquarters port of the collection district in which the vessel is built in ample time prior to clearance of the vessel for its foreign destination to enable that officer to have the abstract verified by examination of the vessel and the builder's records pertaining thereto.

(c) Applications shall show the following: (1) Name of the manufacturer or producer; (2) location of general offices; (3) location of the factory; (4) kinds of articles manufactured; (5) name of imported or tax-paid materials used; (6) brief description of the process of manufacture or production; (7) probable date of manufacture or production; (8) probable date of exportations; (9) whether drawback will be claimed on articles manufactured or produced prior to the filing of the application.

(d) Customs Form 4477, "Application for a rate of drawback," may be obtained from collectors of customs.