DUTY-FREE SALES ENTERPRISES.

SEC. 1908. DUTY-FREE SALES ENTERPRISES. (a) Findings.— 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. (b) In General.— Section 555(b) of the Tariff Act of 1930 (19 U.S.C. 1555(b)) is amended to read as follows: “(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. “(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 102 STAT. 1316sale 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. 102 STAT. 1317 “(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) Merchandise that is purchased in a duty-free sales enterprise is not eligible for exemption from duty under subpart A of part 2 of schedule 8 of the Tariff Schedules of the United States if such merchandise is brought back to the customs territory. “(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) Effective Date.— The amendment made by this section shall take effect on the date that is 15 days after the date of enactment of this Act.