HQ 0223677 - Request for Internal Advice Regarding the Interpretation of 19 CFR 111.23; Maintenance of Centralized Accounting Records - United States International Trade Commision Rulings

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HQ 223677

December 22, 1992

BRO-3-06-CO:R:C:E 223677 CB

CATEGORY: ENTRY

Director
Office of Regulatory Audit
U.S. Customs Service
Washington, D.C. 20229

RE: Request for Internal Advice Regarding the Interpretation of 19 CFR 111.23; Maintenance of Centralized Accounting Records

Dear Sir:

This is in response to your memorandum of January 23, 1992 (your file BRO-1-CO:RA:C TVF) wherein you requested our advice regarding two separate requests by customs brokers for approval to maintain centralized accounting records at more than one location. You requested that we provide you with separate responses to each query. However, we are able to respond to both queries with one answer.

FACTS:

The first broker, Ameri-Can Customshouse Brokers, Inc. has requested approval to move their hard copy centralized accounting records from their administrative offices located in Buffalo, New York to their warehouse in Amherst, New York. They would also like to maintain the oldest files at the Amherst location and keep all automated records and the two most current year's worth of files at the administrative offices located in Buffalo.

The second broker, C.J. Tower Customs Brokers has requested permission to maintain their centralized financial records at various storage facilities within the various districts where it has been granted permits to conduct business.

ISSUE:

Whether the regulations allow a broker to maintain more than one centralized financial records storage facility?

LAW AND ANALYSIS:

Under 19 CFR 111.23 a broker is required to retain records within the Customs district to which they relate, unless notification of an intent to maintain centralized financial records is given under paragraph (e). More specifically, under 19 CFR 111.23(e), a broker is permitted to maintain financial records on a centralized basis if they have been granted permission to do business in more than one district. Financial records encompass cash receipts, disbursement journals, accounts receivable and accounts payable, the general ledger and other summary records. The centralized storage facility can include records from districts in other regions. All that is required is that the regional commissioner of the region where the notification was filed notify the other affected regional commissioners of the centralized storage. 19 CFR 111.23(e)(3). However, other basic records for brokers who operate offices in more than one district must be maintained at each location where the broker transacts customs business. These records include entry files, immediate delivery release and control files, and other records essential to the day-to-day operations of the local office. (See 50 Fed. Reg. 31,875 (1985))

In both of the instant cases the brokers propose having multiple centralized storage facilities. The regulations provide for a "centralized" storage facility. The plain meaning of the word "centralize" is to consolidate or "[t]o bring under a single, central authority." Webster's II New Riverside University Dictionary 243 (1984). The regulations do not allow multiple centralized storage facilities. The brokers must either retain the records within the Customs district to which they relate or notify one regional commissioner of their intent to maintain one centralized storage facility. In the event either of the above-referenced brokers are presently maintaining multiple storage facilities, you should direct them to either consolidate all of their financial records in one storage location or return them to the applicable districts.

HOLDING:

Multiple centralized financial records storage facilities are not permitted under 19 CFR 111.23(e). A broker must retain records within the district to which they relate or maintain one centralized storage facility.

Sincerely,

John A. Durant, Director

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