BACK
REGULATIONS:
THE FLORENCE AGREEMENT PROGRAM       

PART 301-INSTRUMENTS AND APPARATUS FOR EDUCATIONAL 
         AND SCIENTIFIC INSTITUTIONS

 § 301.1  General provisions.
 § 301.2  Definitions.
 § 301.3  Application for duty-free entry of scientific instruments. 
 § 301.4  Processing of applications by the Department of the 
          Treasury (U.S. Customs Service). 
 § 301.5  Processing of applications by the Department of Commerce.
 § 301.6  Appeals. 
 § 301.7  Final disposition of an application.
 § 301.8  Instructions for entering instruments through U.S. 
          Customs under tariff item 851.60.
 § 301.9  Uses and disposition of instruments entered under 
          item 851.60, TSUS.
 § 301.10 Importation of repair components under item 851.65 
          for article previously entered under item 851.60.
 

 
 
PART 301-INSTRUMENTS AND APPARATUS FOR EDUCATIONAL
         AND SCIENTIFIC INSTITUTIONS
  
Authority: Sec. 6(c), Pub. L. 89-651, 80 Stat. 897 (19 U.S.C. 
1202).
 
 
Source: 47 FR 32517, July 28, 1982, unless otherwise noted.
 
§ 301.1  General provisions.
 
  (a) Purpose. This part sets forth the regulations of the Department 
of Commerce and the Department of the Treasury applicable to 
the duty-free importation of scientific instruments and apparatus 
by public or private nonprofit institutions.
  (b) Background. (1) The Agreement on the importation of Educational, 
Scientific and Cultural Materials (Florence Agreement; ``the 
Agreement'') is a multinational treaty, contracted to by approximately 
89 countries, which seeks to further the cause of peace through 
the freer exchange of ideas and knowledge across national boundaries, 
primarily by eliminating tariffs on certain educational, scientific 
and cultural materials.
  (2) Annex D of the Agreement provides that scientific instruments 
and apparatus intended exclusively for educational purposes 
or pure scientific research use by qualified nonprofit institutions 
shall enjoy duty-free entry if instruments or apparatus of equivalent 
scientific value are not being manufactured in the country of 
importation.
  (3) Pub. L. 89-651, the Educational, Scientific, and Cultural 
Materials Importation Act of 1966 (19 U.S.C. 1202; ``the Act''), 
implements the Agreement in the United States. Section 6(c) 
of the Act gives effect to Annex D of the Agreement. This section 
added tariff item 851.60 to the Tariff Schedules of the United 
States (TSUS) to provide for the duty-free importation of instruments 
and apparatus ``entered for the use of any nonprofit institution, 
whether public or private, established for educational or scientific 
purposes * * * if no instrument or apparatus of equivalent scientific 
value for the purposes for which the instrument or apparatus 
is intended to be used is being manufactured in the United States.'' 
Headnote 1 to Schedule 8, Part 4, TSUS, was amended by Pub. 
L. 89-651 and provides for the use, disposition and transfer 
of articles and their repair components accorded duty-free entry 
under tariff items 851.60 and 851.65, respectively, and Headnote 
6, added by Pub. L. 89-651, sets forth the duty-free procedures 
and responsibilities.
  (c) Summary of statutory procedures and requirements. (1) 
Headnote 1 provides, among other things, that articles covered 
by tariff items 851.60 (scientific instruments and apparatus) 
and 851.65 (repair components therefor) must be exclusively 
for the use of the institutions involved and not for distribution, 
sale or other commercial use within five years after being entered. 
These articles may be transferred by a qualified nonprofit institution 
to another such institution without duty liability being incurred. 
However, if such article is transferred other than as provided 
by the preceding sentence, or is used for commercial purposes 
within five years after having been entered, duty shall be assessed 
in accordance with the procedures established in Headnote 1.
  (2) Pursuant to Headnote 6 an institution desiring to enter 
an instrument or apparatus under tariff item 851.60 TSUS must 
file an application with the Secretary of the Treasury (U.S. 
Customs Service) in accordance with these regulations. If the 
application is made in accordance with the regulations, notice 
of the application is published in the Federal Register to provide 
an opportunity for interested persons and government agencies 
to present views. The application is reviewed by the Secretary 
of Commerce (Director, Statutory Import Programs Staff) whose 
decision as to whether or not duty-free entry may be accorded 
the instrument is published in the Federal Register. An appeal 
of the final decision may be filed with the United States Court 
of Customs and Patent Appeals, on questions of law only, within 
20 days after publication of the decision in the Federal Register. 
  (3) Repair components for instruments or apparatus admitted 
duty-free under tariff item 851.60 require no application and 
may be entered duty-free in accordance with the procedures prescribed 
in § 301.10.
  (d) Authority and delegations. The Act authorizes the Secretaries 
of Commerce and the Treasury to prescribe joint regulations 
to carry out their functions under Headnote 6, TSUS. The Secretary 
of the Treasury has delegated authority to the Assistant Secretary 
for Enforcement and Operations, who has retained rulemaking 
authority and further delegated administration of the regulations 
to the Commissioner of the U.S. Customs Service. The authority 
of the Secretary of Commerce has been delegated to the Deputy 
Assistant Secretary for Import Administration who has retained 
rulemaking authority and further delegated administration of 
the regulations to the Director of the Statutory Import Programs 
Staff.
 
[47 FR 32517, July 28, 1982; 47 FR 34368, Aug. 9, 1982]
 
§ 301.2  Definitions.
 
  For the purposes of these regulations and the forms used to 
implement them:
  (a) Director means the Director of the Statutory Import Programs 
Staff, International Trade Administration, U.S. Department of 
Commerce.
  (b) Customs means the U.S. Customs Service and the ``The
Commissioner'' 
means Commissioner of the U.S. Customs Service, or the official(s) 
designated to act on the Commissioner's behalf.
  (c) Customs Port or the Port means the port where a particular 
claim has been or will be made for duty-free entry of a scientific 
instrument or apparatus under tariff item 851.60.
  (d) Entry means entry of an instrument into the Customs territory 
of the United States for consumption or withdrawal of an instrument 
from a Customs bonded warehouse for consumption.
  (e) United States includes only the several States, the District 
of Columbia and the Commonwealth of Puerto Rico.
  (f) Instrument means only instruments and apparatus classifiable 
under the tariff items specified in headnote 6(a) of part 4 
of Schedule 8. A combination of basic instrument or apparatus 
and accompanying accessories shall be treated as a single instrument 
provided that, under normal commercial practice, such combination 
is considered to be a single instrument and provided further 
that the applicant has ordered or, upon favorable action on 
its application, firmly intends to order the combination as 
a unit. Unless the context indicates otherwise, instrument or 
apparatus shall mean a foreign ``instrument or apparatus'' for 
which duty-free entry is sought under tariff item 851.60. Spare 
parts typically ordered and delivered with an instrument are 
also considered part of an instrument for purposes of these 
regulations. The term ``instruments'' shall not include:
  (1) Materials or supplies used in the operation of instruments 
and apparatus such as paper, cards, tapes, ink, recording materials, 
expendable laboratory materials, apparatus that loses identity 
or is consumed by usage or other materials or supplies.
  (2) Ordinary equipment for use in building construction or 
maintenance; or equipment for use in supporting activities of 
the institution, such as its administrative offices, machine 
shops, libraries, centralized computer facilities, eating facilities, 
or religious facilities; or support equipment such as copying 
machines, glass working apparatus and film processors.
  (3) General purpose equipment such as air conditioners, electric 
typewriters, electric drills, refrigerators.
  (4) General-purpose computers. Accessories to computers which 
are not eligible for duty-free treatment are also ineligible. 
Scientific instruments containing embedded computers which are 
to be used in a dedicated process or in instrument control, 
as opposed to general data processing or computation, are, however, 
eligible for duty-free consideration.
  (5) Instruments initially imported solely for testing or review 
purposes which were entered under bond under tariff item 864.30, 
subject to the provisions of Headnote 1(a) of Subpart C, Part 
5, Schedule 8 TSUS and must be exported or destroyed within 
the time period specified in that headnote.
  (g) Domestic instrument means an instrument which is manufactured 
in the United States. A domestic instrument need not be made 
exclusively of domestic components or accessories.
  (h) Accessory has the meaning which it has under normal commercial 
usage. An accessory, whether part of an instrument or an attachment 
to an instrument, adds to the capability of an instrument. An 
accessory for which duty-free entry is sought under item 851.60 
shall be the subject of a separate application when it is not 
an accompanying accessory.
  (i) Accompanying accessory means an accessory for an instrument 
that is listed as an item in the same purchase order and that 
is necessary for accomplishment of the purposes for which the 
instrument is intended to be used.
  (j) Ancillary equipment means an instrument which may be functionally 
related to the foreign instrument but is not operationally linked 
to it. Examples of ancillary equipment are vacuum evaporators 
or ultramicrotomes, which can be used to prepare specimens for 
electron microscopy. Further, equipment which is compatible 
with the foreign instrument, but is also clearly compatible 
with similar domestic instruments, such as automatic sampling 
equipment sold for use with a variety of mass spectrometers, 
will be treated as ancillary equipment. A separate application 
will be required for ancillary equipment even if ordered with 
the basic instrument.
  (k) Components of an instrument means parts or assemblies 
of parts which are substantially less than the instrument to 
which they relate. A component enables an instrument to function 
at a specified minimum level, while an accessory adds to the 
capability of an instrument. Applications shall not be accepted 
for components of instruments that did not enter duty-free under 
tariff item 851.60 or for components of instruments being manufactured 
or assembled by a commercial firm or entity in the U.S. In determining 
whether an item is a component ineligible for duty-free consideration 
or an accessory eligible for such consideration, Customs shall 
take into account such factors as the item's complexity, novelty, 
degree of integration and pertinency to the research purposes 
to be performed by the instrument as a whole.
  (l) Produced for stock means an instrument which is manufactured, 
on sale and available from a stock.
  (m) Produced on order means an instrument which a manufacturer 
lists in current catalog literature and is able and willing 
to produce and have available without unreasonable delay to 
the applicant.
  (n) Custom-made means an instrument which a manufacturer is 
willing and able to make to purchaser's specifications. Instruments 
resulting from a development effort are treated as custom-made 
for the purposes of these regulations. Also, a special-order 
variant of a produced on order instrument, with significant 
modifications specified by the applicant, may be treated as 
custom-made.
  (o) Same general category means the category in which an instrument 
is customarily classified in trade directories and product-source 
lists, e.g., scanning electron microscope, mass spectrometer, 
light microscope, x-ray spectrometer.
  (p) Comparable domestic instrument means a domestic instrument 
capable or potentially capable of fulfilling the applicant's 
technical requirements or intended uses, whether or not in the 
same general category as the foreign instrument. 
  (q) Specifications means the particulars of the structural, 
operational and performance characteristics or capabilities 
of a scientific instrument. 
  (r) Guaranteed specifications are those specifications which 
are an explicit part of the contractual agreement between the 
buyer and the seller (or which would become part of the agreement 
if the buyer accepted the seller's offer), and refer only to 
the minimum and routinely achievable performance levels of the 
instrument under specified conditions. If a capability is listed 
or quoted as a range (e.g., ``5 to 10 angstroms'') or as a minimum 
that may be exceeded (e.g., ``5 angstroms or better''), only 
the inferior capability may be considered the guaranteed specification. 
Evidence that specifications are ``guaranteed'' will normally 
consist of their being printed in a brochure or other descriptive 
literature of the manufacturer; being listed in a purchase agreement 
upon which the purchase is conditioned; or appearing in a manufacturer's 
formal response to a request for quote. If, however, no opportunity 
to submit a bid was afforded the domestic manufacturer or if, 
for any other reason, comparable guaranteed specifications of 
the foreign and domestic instruments do not appear on the record, 
other evidence relating to a manufacturer's ability to provide 
an instrument with comparable specifications may, at the discretion 
of the Director, be considered in the comparison of the foreign 
and domestic instruments' capabilities. 
  (s) Pertinent specifications are those specifications necessary 
for the accomplishment of the specific scientific research and/or 
science-related educational purposes described by the applicant. 
Specifications of features (even if guaranteed) which afford 
greater convenience, satisfy personal preferences, accommodate 
institutional commitments or limitations, or assure lower costs 
of acquisition, installation, operation, servicing or maintenance 
are not pertinent. For example, a design feature, such as a 
small number of knobs or controls on an instrument primarily 
designed for research purposes, would be a convenience. The 
ability to fit an instrument into a small room, when the required 
operations could be performed in a larger room, would be either 
a cost consideration or a matter of convenience and not a pertinent 
specification. In addition, mere difference in design (which 
would, for example, broaden the educational experience of students 
but not provide superior scientific capability) would not be 
pertinent. Also, unless the applicant demonstrates it is necessary 
for the accomplishment of its specific scientific purposes, 
the terms does not extend to such characteristics as size, weight, 
appearance, durability, reliability, complexity or (simplicity), 
ease of operation, ease of maintenance, productivity, versatility, 
``state of the art'' design, specific design, or other such 
characteristics.
 
[47 FR 32517, July 28, 1982; 47 FR 34368, Aug. 9, 1982]
 
§ 301.3   Application for duty-free entry of scientific instruments. 
 
  (a) Who may apply. An applicant for duty-free entry of an 
instrument under tariff item 851.60 must be a public or private 
nonprofit institution which is established for educational or 
scientific purposes and which has placed a bona fide order or 
has a firm intention to place a bona fide order for a foreign 
instrument within 60 days following a favorable decision on 
the institution's application. 
  (b) Application forms. Applications must be made on form ITA-
338P which may be obtained from the Statutory Import Programs 
Staff, International Trade Administration, U.S. Department of 
Commerce, Washington, DC 20230, or from the various District 
Offices of the U.S. Department of Commerce. (Approved by the 
Office of Management and Budget under control number 0625-0037.)
  (c) Where to apply. Applications must be filed with the U.S. 
Customs Service, Department of the Treasury, at the address 
specified on page 1 of the form. 
  (d) Five copies of the form, including relevant supporting 
documents, must be submitted. One copy of the form shall be 
signed in the original by the person in the applicant institution 
under whose direction and control the foreign instrument will 
be used and who is familiar with the intended uses of the instrument. 
The remaining four copies of the form may be copies of the original. 
Attachments should be fully identified and referenced to the 
question(s) on the form to which they relate.
  (e) A single application (in the requisite number of copies) 
may be submitted for any quantity of the same type or model 
of foreign instrument provided that the entire quantity is intended 
to be used for the same purposes and provided that all units 
are included on a single purchase order. A separate application 
shall be submitted for each different type or model or variation 
in the type or model of instrument for which duty-free entry 
is sought even if covered by a single purchase order. Orders 
calling for multiple deliveries of the same type or model of 
instrument over a substantial period of time may, at the discretion 
of the Director, require multiple applications. 
  (f) Failure to answer completely all questions on the form 
in accordance with the instructions on the form or to supply 
the requisite number of copies of the form and supporting documents 
may result in delays in processing of the application while 
the deficiencies are remedied, return of the application without 
processing, or denial of the application without prejudice to 
resubmission. Any questions on these regulations or the application 
form should be addressed to the Director. 
 
[47 FR 32517, July 28, 1982, as amended at 50 FR 11501, Mar. 
22, 1985]
 
§ 301.4  Processing of applications by the Department of the 
    Treasury (U.S. Customs Service). 
 
  (a) Review and determination. The Commissioner shall date 
each application when received by Customs. If the application 
appears to be complete, the Commissioner shall determine: 
  (1) Whether the institution is a nonprofit private or public 
institution established for research and educational purposes 
and therefore authorized to import instruments into the U.S. 
under tariff item 851.60. In making this determination the Commissioner 
will generally review the application to determine if the applicant 
has attached a copy of the letter from the Internal Revenue 
Service (IRS) granting the institution nonprofit status (exemption 
from Federal income tax) under section 501(c)(3) of the IRS 
Code or will determine if the institution is listed in a current 
edition of ``Cumulative List of Exempt Organizations''; 
  (2) Whether the instrument falls within the classes of instruments 
eligible for duty-free entry consideration under tariff item 
851.60 (For eligible classes see Headnote 6(a), Part 4, Schedule 
8, TSUS); and 
  (3) Whether the instrument which is the subject of the application 
is intended for the exclusive use of the applicant institution 
and is not intended to be used for commercial purposes. For 
the purposes of this section, commercial uses would include, 
but not necessarily be limited to: Distribution or sale of the 
instrument by the applicant institution; any use by, or for 
the primary benefit of, a commercial entity; or use of the instrument 
for demonstration purposes in return for a fee or other valuable 
consideration. In making the above determination, the Commissioner 
may consider, among other things, whether the results of any 
research to be performed with the instrument will be fully and 
timely made available to the public. For the purposes of this 
section, use of an instrument for the treatment of patients 
is considered noncommercial.
 
If any of the Commissioner's determinations is in the negative, 
the application shall be found to be outside the scope of the 
Act and shall be returned to the applicant with a statement 
of the reason(s) for such findings.
 
  (b) Forwarding of applications to the Department of Commerce. 
If the Commissioner finds the application to be within the scope 
of the Act and these regulations, the Commissioner shall (1) 
assign a number to the application and (2) forward one copy 
to the Secretary of the Department of Health and Human Services 
(HHS), and two copies, including the one that has been signed 
in the original, to the Director. The Commissioner shall retain 
one copy and return the remaining copy to the applicant stamped 
``Accepted for Transmittal to the Department of Commerce.'' 
The applicant shall file the stamped copy of the form with the 
Port when formal entry of the article is made. If entry has 
already occurred under a claim of tariff item 851.60, the applicant 
(directly or through his/her agent) shall at the earliest possible 
date supply the stamped copy to the Port. Further instructions 
for entering instruments are contained in § 301.8 of the regulations.
 
[47 FR 32517, July 28, 1982; 47 FR 34368, Aug. 9, 1982, as amended 
at 50 FR 11501, Mar. 22, 1985]
 
§ 301.5  Processing of applications by the Department of Commerce.
 
  (a) Public notice and opportunity to present views. (1) Within 
10 days of receipt of an application from the Commissioner, 
the Director shall make a copy available for public inspection 
during ordinary business hours of the Department of Commerce. 
Unless the Director determines that an application has deficiencies 
which preclude consideration on its merits (e.g., insufficient 
description of intended purposes to rule on the scientific equivalency 
of the foreign instrument and potential domestic equivalents), 
he shall publish in the Federal Register a notice of the receipt 
of the application to afford all interested persons a reasonable 
opportunity to present their views with respect to the question 
``whether an instrument or apparatus of equivalent scientific 
value for the purpose for which the article is intended to be 
used is being manufactured in the United States.'' The notice 
will include the application number, the name and address of 
the applicant, a description of the instrument(s) for which 
duty-free entry is requested, the name of the foreign manufacturer 
and a brief summary of the applicant's intended purposes extracted 
from the applicant's answer to question 7 of the application. 
In addition, the notice shall specify the date the application 
was accepted by the Commissioner for transmittal to the Department 
of Commerce.
  (2) If the Director determines that an application is incomplete 
or is otherwise deficient, he may request the applicant to supplement 
the application, as appropriate, prior to publishing the notice 
of application in the Federal Register. Supplemental information/mateRhal 
requested under this provision shall be supplied to the Directo 
in two copies within 20 days of the date of the request and 
shall úW subject to the certification contained in4Question 
11 of the form. Failure to provide the requested i.formation 
on time shall result in a denial of the application without 
prejudice to resubmission.
  (3)0Requirement for presentation of views (comments) by interested 
persons. Any interested person or government agency may make 
written comments to the Director with respect to the question 
whether an instrument of equivalent scientific value, for the 
purposes for which the foreign instrument is intended to be 
used, is being manufactured in the United States. Except for 
comments specified in paragraph (a)(4) of this section, comments 
should be in the form of supplementary answers to the applicable 
questions on the application form. Comments must be postmarked 
no later than 20 days from the date on which the notice of application 
is published in the Federal Register. In order to be considered, 
comments and related attachments must be submitted to the Director 
in duplicate; shall state the name, affiliation and address 
of the person submitting the comment; and shall specify the 
application to which the comment applies. In order to preserve 
the right to appeal the Director's decision on a particular 
application pursuant to § 301.6 of these regulations, a domestic 
manufacturer or other interested person must make timely comments 
on the application. Separate comments should be supplied on 
each application in which a person has an interest. However, 
brochures, pamphlets, printed specifications and the like, included 
with previous comments, if properly identified, may be incorporated 
by reference in subsequent comments. If the Director knows of 
the availability of a domestic instrument which may be comparable 
to the foreign instrument, he may: (i) Require the applicant 
to compare the domestic instrument with the foreign instrument; 
or (ii) compare the two instruments whether or not comments 
are received from a domestic manufacturer on the specific application.
  (4) Comments by domestic manufacturers. Comments of domestic 
manufacturers opposing the granting of an application should:
  (i) Specify the domestic instrument considered to be scientifically 
equivalent to the foreign article for the applicant's specific 
intended purposes and include documentation of the domestic 
instrument's guaranteed specifications and date of availability.
  (ii) Show that the specifications claimed by the applicant 
in response to question 8 to be pertinent to the intended purpose 
can be equaled or exceeded by those of the listed domestic instrument(s) 
whether or not it has the same design as the foreign instrument; 
that the applicant's alleged pertinent specifications should 
not be considered pertinent within the meaning of § 301.2(s) 
of the regulations for the intended purposes of the instrument 
described in response to question 7 of the application; or that 
the intended purposes for which the instrument is to be used 
do not qualify the instrument for duty-free consideration under 
the Act. 
  (iii) Where the comments regarding paragraphs (a)(4)(i) and 
(a)(4)(ii) of this section relate to a particular accessory 
or optional device offered by a domestic manufacturer, cite 
the type, model or other catalog designation of the accessory 
device and include the specification therefor in the comments.
  (iv) Where the justification for duty-free entry is based 
on excessive delivery time, show whether:
  (A) The domestic instrument is as a general rule either produced 
for stock, produced on order, or custom-made and; 
  (B) An instrument or apparatus of equivalent scientific value 
to the article, for the purposes described in response to question 
7, could have been produced and delivered to the applicant within 
a reasonable time following the receipt of the order.
  (v) Indicate whether the applicant afforded the domestic manufacturer 
an opportunity to furnish an instrument or apparatus of equivalent 
scientific value to the article for the purposes described in 
response to question 7 and, if such be the case, whether the 
applicant submitted a formal invitation to bid that included 
the technical requirements of the applicant.
  (5) Untimely comments. Comments must be made on a timely basis 
to ensure their consideration by the Director and the technical 
consultants, and to preserve the commenting person's right to 
appeal the Director's decision on an application. The Director, 
in his discretion, may entertain comments filed untimely to 
the extent that they contain factual information, as opposed 
to arguments, explanations or recommendations.
  (6) Provision of general comments. A domestic manufacturer 
who does not wish to oppose duty-free entry of a particular 
application, but who desires to apprise the Director of the 
availability and capabilities of its instrument(s), may at any 
time supply documentation to the Director without reference 
to a particular application. Such documentation shall be routinely 
taken into account by the Director when applications involving 
comparable foreign instruments are received. The provision of 
general comments does not preserve the commentor's right to 
appeal the Director's decision on a particular application.
  (7) Provision of application to domestic manufacturers. To 
facilitate timely comments, the Director may furnish copies 
of certain applications to domestic manufacturers who intend 
to comment on applications, provided:
  (i) The manufacturer requests the service in writing;
  (ii) The manufacturer provides copies of current company literature 
regarding the domestic instrument and its guaranteed capabilities; 
and
  (iii) The manufacturer identifies the specific models or types 
of comparable foreign instrument(s) that it proposes to comment 
on. The Director may furnish for comment copies of the appropriate 
applications to the domestic manufacturer until the firm requests 
that the service be discontinued, provided the firm utilizes 
the service to supply written comments on applications. If the 
recipient of the service fails to avail itself of the opportunity 
to comment on appropriate applications for a period of one year, 
the Director may at his discretion discontinue the service. 
For reasons of cost and administrative burden, the service may 
be discontinued at the discretion of the Director. In such case 
the Director shall notify all recipients of the service in writing 
of such discontinuance.
  (b) Additions to the record. The Director may solicit from 
the applicant or from foreign or domestic manufacturers, and 
agents thereof, or any other person or Government agency considered 
by the Director to have competence on any issue pertaining to 
an application, any additional information the Director deems 
necessary to the rendering of a decision. The Director may attach 
such conditions and time limitations deemed appropriate upon 
the provision of such information and may draw appropriate inferences 
from a person's failure to provide the requested information.
  (c) Advice from technical consultants. (1) The Director shall 
consider any written advice from the Secretary of HHS, or his 
delegate, on the question whether a domestic instrument of equivalent 
scientific value to the foreign instrument, for the purposes 
for which the instrument is intended to be used, is being manufactured 
in the United States.
  (2) After the comment period has ended (§ 301.5(a)(3)), the 
complete application and any comments received and related information 
are forwarded to the appropriate technical consultants for their 
written advice.
  (3) The technical consultants are requested to provide their 
written recommendation within 30 days of the date of transmittal. 
The technical consultants relied upon for advice may include, 
but are not limited to, the National Institutes of Health (delegated 
the function by the Secretary of HHS), the National Bureau of 
Standards and the National Oceanographic and Atmospheric
Administration.
  (d) Criteria for the determinations of the Department of Commerce-
(1) Scientific equivalency. (i) The determination of scientific 
equivalency shall be based on a comparison of the pertinent 
specifications of the foreign instrument with similar pertinent 
specifications of comparable domestic instruments (see § 301.2(s) 
for the definition of pertinent specification). Ordinarily, 
the Director will consider only those performance characteristics 
which are ``guaranteed specifications'' within the meaning of 
§ 301.2(r) of this part. In no event, however, shall the Director 
consider performance capabilities superior to the manufacturer's 
guaranteed specifications or their equivalent. In making the 
comparison the Director may consider a reasonable combination 
of domestic instruments that combines two or more functions 
into an integrated unit if the combination of domestic instruments 
is capable of accomplishing the purposes for which the foreign 
instrument is intended to be used. If the Director finds that 
a domestic instrument possesses all of the pertinent specifications 
of the foreign instrument, he shall find that there is being 
manufactured in the United States an instrument of equivalent 
scientific value for such purposes as the foreign instrument 
is intended to be used. If the Director finds that the foreign 
instrument possesses one or more pertinent specifications not 
possessed by the comparable domestic instrument(s), the Director 
shall find that there is not being manufactured in the United 
States an instrument of equivalent scientific value to the foreign 
instrument for such purposes as the foreign instrument is intended 
to be used.
  (ii) Programs that may be undertaken at some unspecified future 
date shall not be considered in the Director's comparison. In 
making the comparison, the Director shall consider only the 
instrument and accompanying accessories described in the application 
and determined eligible by the U.S. Customs Service. The Director 
shall not consider the planned purchase of additional accessories 
or the planned conversion of the article at some unspecified 
future time for such programs.
  (iii) In order for the Director to make a determination with 
respect to the ``scientific equivalency'' of the foreign and 
domestic instruments, the applicant's intended purposes must 
include either scientific research or science-related educational 
programs. Instruments used exclusively for nonscientific purposes 
have no scientific value, thereby precluding the requisite finding 
by the Director with respect to ``whether an instrument or apparatus 
of equivalent scientific value to such article, for the purposes 
for which the article is intended to be used, is being manufactured 
in the United States.'' In such cases the Director shall deny 
the application for the reason that the instrument has no scientific 
value for the purposes for which it is intended to be used. 
Examples of nonscientific purposes would be the use of an instrument 
in routine diagnosis or patient care and therapy (as opposed 
to clinical research); in teaching a nonscientific trade (e.g., 
printing, shoemaking, metalworking or other types of vocational 
training); in teaching nonscientific courses (e.g., music, home 
economics, journalism, drama); in presenting a variety of subjects 
or merely for presenting coursework, whether or not science 
related (e.g., video tape editors, tape recorders, projectors); 
and in conveying cultural information to the public (e.g., a 
planetarium in the Smithsonian Institution).
  (2) Manufactured in the United States. An instrument shall 
be considered as being manufactured in the United States if 
it is customarily ``produced for stock,'' ``produced on order'' 
or ``custom-made'' within the United States. In determining 
whether a U.S. manufacturer is able and willing to produce an 
instrument, and have it available without unreasonable delay, 
the normal commercial practices applicable to the production 
and delivery of instruments of the same general category shall 
be taken into account, as well as other factors which in the 
Director's judgment are reasonable to take into account under 
the circumstances of a particular case. For example, in determining 
whether a domestic manufacturer is able to produce a custom-
made instrument, the Director may take into account the production 
experience of the domestic manufacturer including (i) the types, 
complexity and capabilities of instruments the manufacturer 
has produced, (ii) the extent of the technological gap between 
the instrument to which the application relates and the manufacturer's 
customary products, (iii) the manufacturer's technical skills, 
(iv) the degree of saturation of the manufacturer's production 
capability, and (v) the time required by the domestic manufacturer 
to produce the instrument to the purchaser's specification. 
Whether or not the domestic manufacturer has field tested or 
demonstrated the instrument will not, in itself, enter into 
the decision regarding the manufacturer's ability to manufacture 
an instrument. Similarly, in determining whether a domestic 
manufacturer is willing to produce an instrument, the Director 
may take into account the nature of the bid process, the manufacturer's 
policy toward manufacture of the product(s) in question, the 
minimum size of the manufacturer's production runs, whether 
the manufacturer has bid similar instruments in the past, etc. 
Also, if a domestic manufacturer was formally requested to bid 
an instrument, without reference to cost limitations and within 
a leadtime considered reasonable for the category of instrument 
involved, and the domestic manufacturer failed formally to respond 
to the request, for the purposes of this section the domestic 
manufacturer would not be considered willing to have supplied 
the instrument.
  (3) Burden of proof. The burden of proof shall be on the applicant 
to demonstrate that no instrument of equivalent scientific value 
for the purposes for which the foreign instrument is to be used 
is being manufactured in the United States. Evidence of applicant 
favoritism towards the foreign manufacturer (advantages not 
extended to domestic firms, such as additional lead time, know-
how, methods, data on pertinent specifications or intended uses, 
results of research or development, tools, jigs, fixtures, parts, 
materials or test equipment) may be, at the Director's discretion, 
grounds for rejecting the application.
  (4) Excessive delivery time. Duty-free entry of the instrument 
shall be considered justified without regard to whether there 
is being manufactured in the United States an instrument of 
equivalent scientific value for the intended purposes if excessive 
delivery time for the domestic instrument would seriously impair 
the accomplishment of the applicant's intended purposes. For 
purposes of this section, (i) except when objective and convincing 
evidence is presented that, at the time of order, the actual 
delivery time would significantly exceed quoted delivery time, 
no claim of excessive delivery time may be made unless the applicant 
has afforded the domestic manufacturer an opportunity to quote 
and the delivery time for the domestic instrument exceeds that 
for the foreign instrument; and (ii) failure by the domestic 
manufacturer to quote a specific delivery time shall be considered 
a non-responsive bid (see § 301.5(d)(2)). In determining whether 
the difference in delivery times cited by the applicant justifies 
duty-free entry on the basis of excessive delivery time, the 
Director shall take into account (A) the normal commercial practice 
applicable to the production of the general category of instrument 
involved; (B) the efforts made by the applicant to secure delivery 
of the instruments (both foreign and domestic) in the shortest 
possible time; and (C) such other factors as the Director finds 
relevant under the circumstances of a particular case.
  (e) Denial without prejudice to resubmission (DWOP). The Director 
may, at any stage in the processing of an application by the 
Department of Commerce, DWOP an application if the application 
contains any deficiency which, in the Director's judgment, prevents 
a determination on its merits. The Director shall state the 
deficiences of the application in a letter to the applicant 
in making the provisional denial.
  (1) The applicant has 60 days from the date of the DWOP to 
correct the cited deficiencies in the application unless a request 
for an extension of time for submission of the supplemental 
information has been received by the Director prior to the expiration 
of the 60-day period and is approved.
  (2) The written request (letter or telegram) for an extension 
should indicate the reasons for the request and the amount of 
additional time needed. If granted, extensions of time will 
generally be limited to 30 days.
  (3) Resubmissions must reference the application number of 
the earlier application. The resubmission shall be made by letter 
and filed in quadruplicate with the Director. The record of 
a resubmitted application shall include the original submission 
on file with the Department. Any new material or information 
contained in a resubmission, which should address the specific 
deficiencies cited in the DWOP letter, should be clearly labeled 
and referenced to the applicable question(s) on the application 
form. The resubmission should be signed and dated by the individual 
in the applicant institution who signed the original application 
or, in his/her absence, the individual in the applicant institution 
under whose direction and control the foreign instrument will 
be used and who is familiar with the intended uses of the instrument. 
The resubmission must be for the instrument covered by the original 
application unless the DWOP letter specifies to the contrary. 
The resubmission shall be subject to the certification contained 
in question 11 on the original application.
  (4) If the applicant fails to resubmit within the applicable 
time period, the prior DWOP shall, irrespective of the merits 
of the case, result in a denial of the application.
  (5) The Director shall use the postmark date of the fully 
completed resubmission in determining whether the resubmission 
was made within the allowable time period. Certified or registered 
mail, or some other means which can unequivocally establish 
the date of mailing, is recommended.
  (6) The applicant may, at any time prior to the end of the 
resubmission period, notify the Director in writing that it 
does not intend to resubmit the application. Upon such notification, 
the application will be deemed to have been withdrawn. (See 
§ 301.5(g).) 
  (7) Information provided in a resubmission that, in the judgment 
of the Director, contradicts or conflicts with information provided 
in a prior submission, or is not a reasonable extension of the 
information contained in the prior submission, shall not be 
considered in making the decision on an application that has 
been resubmitted. Accordingly, an applicant may elect to reinforce 
an orginal submission by elaborating in the resubmission on 
the description of the purposes contained in a prior submission 
and may supply additional examples, documentation and/or other 
clarifying detail, but the applicant shall not introduce new 
purposes or other material changes in the nature of the original 
application. The resubmission should address the specific deficiencies 
cited in the DWOP. The Director may draw appropriate inferences 
from the failure of an applicant to attempt to provide the information 
requested in the DWOP. 
  (8) In the event an applicant fails to address the noted deficiencies 
in the response to the DWOP, the Director may deny the application. 
  (9) Upon receipt of a responsive resubmission the Director 
shall publish a notice in the Federal Register citing the number 
of the earlier application, the name and address of the applicant 
institution, the instrument(s) involved, and any other information 
the Director deems relevant. The notice will also include the 
Federal Register citation for the original notice of application. 
Procedures applicable to comments on the processing of original 
applications shall thereafter apply. 
  (f) Decisions on applications. The Director shall prepare 
a written decision granting or denying each application. However, 
when he deems appropriate, the Director may issue a consolidated 
decision on two or more applications. The Director shall promptly 
forward a copy of the decision to each applicant institution 
and to the Federal Register for publication. 
  (g) Withdrawal of applications. The Director shall discontinue 
processing an application withdrawn by the applicant and shall 
publish notice of such withdrawal in the Federal Register. If 
at any time while its application is pending before the Director, 
either during the intital application or resubmission stage, 
an applicant cancels an order for the instrument to which the 
application relates or ceases to have a firm intention to order 
such instrument or apparatus, the institution shall promptly 
notify the Director. Such notification shall constitute a withdrawal. 
Withdrawals shall be considered as having been finally denied 
for purposes of § 301.7(c) below.
  (h) Nothing in this subsection shall be construed as limiting 
the Director's discretion at any stage of processing to insert 
into the record and consider in making his decision any information 
in the public domain which he deems relevant.
 
[47 FR 32517, July 28, 1982; 47 FR 34368, Aug. 9, 1982, as amended 
at 50 FR 11501, Mar. 22, 1985]
 
§ 301.6   Appeals. 
 
  (a) An appeal from any decision made pursuant to § 301.5(f) 
may be taken, in accordance with headnote 6(e) to part 4 of 
Schedule 8, only to the U.S. Court of Customs and Patent Appeals 
and only on questions of law, within 20 days after publication 
of the decision in the Federal Register. If at any time while 
its application is under consideration by the Court of Customs 
and Patent Appeals on an appeal from a finding by the Director 
an institution cancels an order for the instrument to which 
the application relates or ceases to have a firm intention to 
order such instrument, the institution shall promptly notify 
the court. 
  (b) An appeal may be taken by: (1) The institution which makes 
the application; 
  (2) A person who, in the proceeding which led to the decision, 
timely represented to the Secretary of Commerce in writing that 
he/she manufactures in the United States an instrument of equivalent 
scientific value for the purposes for which the instrument to 
which the application relates is intended to be used; 
  (3) The importer of the instrument, if the instrument to which 
the application relates has been entered at the time the appeal 
is taken; or 
  (4) An agent of any of the foregoing.
  (c) Questions regarding appeal procedures should be addressed 
directly to the U.S. Court of Customs and Patent Appeals, Clerks' 
Office, Washington, DC 20439.
 
§ 301.7  Final disposition of an application.
 
  (a) Disposition of an application shall be final when 20 days 
have elapsed after publication of the Director's final decision 
in the Federal Register (see § 301.6(a)) and no appeal has been 
taken pursuant to § 301.6 of these regulations, of if such appeal 
has been taken, when final judgment is made and entered by the 
Court.
  (b) The Director shall notify the Customs Port when disposition 
of an application becomes final. If the Director has not been 
advised of the port of entry of the instrument, or if entry 
has not been made when the decision on the application becomes 
final, the Director shall notify the Commissioner of final disposition 
of the application.
  (c) An instrument, the duty-free entry of which has been finally 
denied, may not be the subject of a new application from the 
same institution.
 
§ 301.8  Instructions for entering instruments through U.S. 
    Customs under tariff item 851.60.
 
  Failure to follow the procedures in this section may disqualify 
an instrument for duty-free entry notwithstanding an approval 
of an application on its merits by the Department of Commerce.
  (a) Entry procedures. (1) An applicant desiring duty-free 
entry of an instrument may make a claim at the time of entry 
of the instrument into the Customs territory of the United States 
that the instrument is entitled to duty-free classification 
under tariff item 851.60.
  (2) If no such claim is made the instrument shall be immediately 
classified without regard to tariff item 851.60, duty will be 
assessed, and the entry liquidated in the ordinary course.
  (3) If a claim is made for duty-free entry under tariff item 
851.60, the entry shall be accepted without requiring a deposit 
of estimated duties provided that a copy of the form, stamped 
by Customs as accepted for transmittal to the Department of 
Commerce in accordance with § 301.4(b), is filed simultaneously 
with the entry.
  (4) If a claim for duty-free entry under tariff item 851.60 
is made but is not accompanied by a copy of the properly stamped 
form, a deposit of the estimated duty is required. Liquidation 
of the entry shall be suspended for a period of 180 days from 
the date of entry. On or before the end of this suspension period 
the applicant must file with the Customs Port a properly stamped 
copy of the form. In the event that the Customs Port does not 
receive a copy of the properly stamped form within 180 days 
the instrument shall be classified and liquidated in the ordinary 
course, without regard to tariff item 851.60.
  (5) Entry of an instrument after the Director's approval of 
an application. Whenever an institution defers entry until after 
it receives a favorable final determination on the application 
for duty-free entry of the instrument, the importer shall file 
with the entry of the instrument (i) the stamped copy of the 
form, (ii) the institution's copy of the favorable final determination 
and (iii) proof that a bona fide order for the merchandise was 
placed on or before the 60th day after the favorable decision 
became final pursuant to § 301.7 of these regulations. Liquidation 
in such case shall be made under tariff item 851.60.
  (b) Normal Customs entry requirements. In addition to the 
above entry requirements mentioned in paragraph (a) of this 
section, the normal Customs entry requirements must be met. 
In most of the cases, the value of the merchandise will be such 
that the formal Customs entry requirements, which generally 
include the filing of a Customs entry bond, must be complied 
with. (For further information, see 19 CFR 142.3 and 142.4 (TD-
221).)
  (c) Late filing. Notwithstanding the preceding provisions 
of § 301.8 any document, form, or statement required by regulations 
in this section to be filed in connection with the entry may 
be filed at any time before liquidation of the entry becomes 
final, provided that failure to file at the time of entry or 
within the period for which a bond was filed for its production 
was not due to willful negligence or fraudulent intent. Liquidation 
of any entry becomes conclusive upon all persons if the liquidation 
is not protested in writing in accordance with 19 CFR Part 174, 
or the necessary document substantiating duty-free entry is 
not produced in accordance with 19 CFR 10.112, within 90 days 
after notice of liquidation. Upon notice of such final and conclusive 
liquidation, the Department of Commerce will cease the processing 
of any pending application for duty-free entry of the subject 
article. In all other respects, the provisions of this section 
do not apply to Department of Commerce responsibilities and 
procedures for processing applications pursuant to other sections 
of these regulations.
  (d) Payment of duties. The applicant will be billed for payment 
of duties when Customs determines that such payment is due.
 
§ 301.9  Uses and disposition of instruments entered under 
    item 851.60, TSUS.
 
  (a) An instrument granted duty-free entry may be transferred 
from the applicant institution to another eligible institution 
provided the latter institution agrees not to use the instrument 
for commercial purposes within 5 years of the date of entry 
of the instrument. In such cases title to the instrument must 
be transferred directly between the institutions involved. An 
institution transferring a foreign instrument entered under 
item 851.60 within 5 years of its entry shall so inform the 
Customs Port in writing and shall include the following information:
  (1) The name and address of the transferring institution.
  (2) The name and address of the transferee. 
  (3) The date of transfer.
  (4) A detailed description of the instrument. 
  (5) The serial number of the instrument and any accompanying 
accessories. 
  (6) The entry number, date of entry, and port of entry of 
the instrument. 
  (b) Whenever the circumstances warrant, and occasionally in 
any event, the fact of continued use for 5 years for noncommercial 
purposes by the applicant institution shall be verified by Customs.
  (c) If an instrument is transferred in a manner other than 
specified above or is used for commercial purposes within 5 
years of entry, the institution for which such instrument was 
entered shall promptly notify the Customs officials at the Port 
and shall be liable for the payment of duty in an amount determined 
on the basis of its condition as imported and the rate applicable 
to it.
 
§ 301.10  Importation of repair components under item 851.65 
    for article previously entered under item 851.60.
 
  (a) An institution which owns an instrument entered under 
tariff item 851.60 and desires to enter repair components for 
such instrument under tariff item 851.65 may do so without regard 
to the application procedures applicable to entries under item 
851.60 provided the institution certifies to the customs official 
at the port of entry upon entry of such components that they 
are needed repair components for an instrument owned by that 
institution and previously entered and classified under tariff 
item 851.60.
  (b) Instruments entered under item 851.60 and subsequently 
returned to the foreign manufacturer for repair, replacement 
or modification are not covered by tariff item 851.65, although 
they may, in certain circumstances, be considered non-dutiable 
under other Customs provisions (e.g., drawback within the specified 
period pursuant to 19 U.S.C. 1313(c)). Such instruments, if 
classified as dutiable by Customs, may nevertheless be made 
the subject of a new application under tariff item 851.60.
 
[47 FR 32517, July 28, 1982; 47 FR 34368, Aug. 9, 1982]