Sec. 146.95  Methods of attribution.

    (a) Producibility.--(1) General. A subzone operator must attribute 
the source of each final product. The operator is limited in this regard 
to feedstocks which were eligible for attribution during the current or 
prior manufacturing period. Attribution of final products is allowable 
to the extent that the quantity of such products could have been 
produced from such feedstocks, using the industry standards of potential 
production on a practical operating basis, as published in T.D. 66-16. 
Once attribution is made for a particular product, that attribution is 
binding. Subsequent attributions of feedstock to product must take prior 
attributions into account. Each refiner shall keep records showing each 
attribution.
    (2) Industry standards of potential production. The industry 
standards of potential production on a practical operating basis 
necessary for the producibility attribution method are

[[Page 115]]

contained in tables published in T.D. 66-16. With these tables, a 
subzone operator may attribute final products consumed in, or removed 
from, the subzone to feedstocks during the current or a prior 
manufacturing period.
    (3) Attribution to product or feedstock not listed in T.D. 66-16. 
(i) For purposes of attribution, where a final product or a feedstock is 
not listed in T.D. 66-16, the operator must submit a proposed 
attribution schedule, supported by a technical memorandum, to the 
appropriate port director. The port director shall refer the request to 
the Director, Office of Regulatory Audit (``ORA''), who will verify the 
refiner's records and will coordinate with the Director, Office of 
Laboratories and Scientific Services (``OLSS''). The Director, ORA, 
shall either approve or deny the request. If the request is approved, 
the Director, ORA, shall publish a modification of T.D. 66-16. If an 
operator elects to show attribution on a producibility basis, but fails 
to keep records on that basis, the operator shall use its actual 
operating records to determine attribution and any necessary relative 
value calculation upon the Customs Service demand and subject to 
verification.
    (ii) An operator may attribute a final product to a feedstock in 
excess of the amount allowed under T.D. 66-16, when authorized by 
Customs, without losing the ability to attribute under T.D. 66-16 for 
all other feedstock-final product combinations. The operator must use 
its actual production records for the requested feedstock-final product 
combination. The operator must agree in writing that it will not, and it 
will not enable any other person, to file a drawback claim under 19 
U.S.C. 1313 inconsistent with those actual production records for that 
feedstock-final product combination. The operator shall file its request 
in accordance with paragraph (a)(3) of this section. The Director, ORA, 
and the Director, OLSS, must determine whether T.D. 66-16 needs to be 
modified and shall publish in the Customs Bulletin each approval granted 
under this paragraph and request public comments with each such 
approval.
    (4) Attribution to privileged foreign feedstock; relative value. If 
a final product is attributed to the separation of a privileged foreign 
feedstock a relative value must be assigned (see section IV of the 
appendix to this part).
    (b) Refinery operating records. An operator may use the actual 
refinery operating records to attribute the feedstocks used to the 
removed or consumed products. Customs shall accept the operator's 
operating conventions to the extent that the operator demonstrates that 
it actually uses these conventions in its refinery operations. Whatever 
conventions are elected by the operator, they must be used consistently 
in order to be acceptable to Customs. Additionally, Customs may use 
these records to test the validity of admissions into the subzone, 
consumption within and removals from the subzone.

    Example. If the operator mixes three equal quantities of material in 
a day tank and treats that product as a three-part mixture in its 
production unit, Customs will accept the resulting product as composed 
of the three materials. If, in the alternative, the operator assumes 
that the three products do not mix and treats the first product as being 
composed of the first material put into the day tank, the second product 
as composed of the second material put into the day tank, and the third 
product as being composed of the third material put into the day tank, 
Customs will accept that convention also.