HQ 223677: Request for Internal Advice Regarding the Interpretation of 19 CFR 111.23; Maintenance of Centralized Accounting Records

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            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
                                   Commercial Rulings Division