Sec. 146.52  Manipulation, manufacture, exhibition or destruction; 
          Customs Form 216.

    (a) Application. Prior to any action, the operator shall file with 
the port director an application (or blanket application) on Customs 
Form 216 for permission to manipulate, manufacture, exhibit, or destroy 
merchandise in a zone. After Customs approves the application (or 
blanket application), the operator will retain in his recordkeeping 
system the approved application.
    (b) Approval. (1) The port director shall approve the application 
unless (i) the proposed operation would be in violation of law or 
regulation; (ii) the place designated for its performance is not 
suitable for preventing confusion of the identity or status of the 
merchandise, or for safeguarding the revenue; (iii) the port director is 
not satisfied that the destruction will be effective; or (iv) the 
Executive Secretary of the Board has not granted approval of a new 
manufacturing operation.
    (2) The port director is authorized to approve a blanket application 
for a period of up to one year for a continuous or repetitive operation. 
The port director may disapprove or revoke approval of any application, 
or may require the operator to file an individual application.
    (c) Appeal of adverse ruling. If an approved application is 
subsequently rescinded by the port director for any reason, the 
applicant or grantee may appeal the adverse ruling pursuant to the 
hearing provisions of Sec. 146.82(b)(2). The rescission shall remain in 
effect pending the decision on the appeal.
    (d) Report results--(1) Separate application. The operator shall 
report on Customs Form 216 the results of an approved manipulation, 
manufacture, exhibition, or certification of destruction (other than by 
a blanket application), unless the port director chooses physically to 
supervise the operation.
    (2) Blanket application. The operator shall maintain a record of an 
approved manipulation, manufacture, exhibition, or certification of 
destruction, in its inventory control and recordkeeping system so as to 
provide an accounting and audit trail of the merchandise through the 
approved operation.
    (e) Destruction. The port director may permit destruction to be done 
outside the zone, in whole or in part and at the risk and expense of the 
applicant, and under such conditions as are necessary to protect the 
revenue, if proper destruction cannot be accomplished within the zone. 
Any residue from the destruction within a zone, which is determined to 
be without commercial value, may be removed to Customs territory for 
disposal.