also furnish proof satisfactory to the Commissioner that the estimated quantity of special coca leaves required by the applicant for the calendar year to which the application relates is reasonable under all the circumstances, taking into consideration, among other things, the applicant's trade connections, production facilities, and financial capacity to perform the indicated manufacturing operation with such estimated quantity of leaves.

(b) The applicant shall agree to comply with the provisions of section 6 of the act of June 14, 1930, and of the regulations in this part, and the provisions of the act of December 17, 1914, as amended, and to destroy, as hereinafter provided, under the supervision of an authorized representative of the Commissioner, all cocaine, ecgonine, and all salts, derivatives, and preparations from which cocaine or ecgonine may be synthesized or made, contained in and/or produced directly or indirectly from special coca leaves.

(c) The Commissioner, in the determination of his action with respect to any application, may accept the proof furnished in connection with an application relating to a prior year, and may take into consideration any other matter or thing known to him or discovered by investigation which he may deem appropriate to consider in effectuating the intent and purpose of the act of June 14, 1930, and of the regulations in Part 301 of this chapter. In no event will authority to import be granted unless the Commissioner is satisfied that the application is made in good faith and not for the purpose of evading the law.

§ 302.32 Approval or disapproval of application. The Commissioner shall advise the applicant of his approval or disapproval of the application, and, in the event of approval, of the tentative maximum quantity of special coca leaves allowed the applicant for importation covering the requirements (as determined by the Commissioner) of the applicant for the calendar year to which the application relates. Such tentative maximum allowances may be increased or decreased in the discretion of the Commissioner, either on his own motion or on application supported by proof satisfactory to the Commissioner of the necessity therefor. No permit or permits will be issued allowing the applicant, in supplying such requirements, to import, as a charge against such tentative maximum allowance, a total quantity of

special coca leaves in excess of such allowance, except as such allowance shall be increased or decreased in accordance with this section.

§ 302.33 Application for permit to import. A separate permit must be obtained for each shipment of special coca leaves imported by the applicant. Application for such permit or permits shall be made by the applicant on an approved form under oath. Such application shall show, in spaces provided thereon, the quantity in pounds of special coca leaves desired to be imported in the shipment and the number of bales or containers thereof; the tentative maximum quantity of special coca leaves allowed the applicant for the calendar year to which the application for permit relates, the total number of pounds of such tentative maximum quantity for which permits have previously been issued, and the total quantity of leaves actually imported thereunder; and the stock on hand of special coca leaves as such and the quantity of special coca leaves represented by finished stock or extract of coca leaves. The figures for stock on hand shall be given as of a date ascertained in the manner provided for in § 302.3. The application shall also show the name and address of the consignor, if known at the time the application is submitted; if unknown, the application shall so state, and the name and address shall be furnished to the Commissioner as soon as ascertained by the importer; the foreign port of exportation (i. e., the place where the article will begin its journey of exportation to the United States); the port of entry into the United States; and the latest date the shipment will leave the foreign port. The provisions of § 302.4 are hereby made applicable to importations of special coca leaves.

§ 302.34 Registration of importer. No permit or permits will be issued unless and until the applicant shall be duly registered in accordance with the act of December 17, 1914, as amended, and regulations thereunder, and shall have paid the special tax, have rendered the returns and reports, and have kept the records now or hereafter required by such act and regulations.

CROSS REFERENCE: For regulations under the act of December 17, 1914, as amended, see 26 CFR Part 151.

§ 302.35 Allotment for calendar year not importable in succeeding year. No

application for a permit or permits to import received by the Commissioner after the expiration of the calendar year to which any authorized maximum allowance relates will be approved as a charge against such allowance.

§ 302.36 Issuance of permits. Permits to import shall be issued in the form, and importations thereunder shall be made in the manner provided by the regulations in this part. Section 302.8 shall govern the procedure in the case of any shipment of a less or greater quantity of special coca leaves than the quantity authorized by the permit covering such shipment, and § 302.9 shall govern the procedure with respect to the cancellation, at the request of the importer, of permits to import special coca leaves.

§ 302.37 Withdrawal from customs custody. Special coca leaves, upon withdrawal from customs custody, shall be removed to the place of manufacture and safely stored in a storeroom adequately protected against theft and against entry by any persons other than the importing manufacturer and his duly authorized agents and employees, or the Commissioner and his duly authorized representative (herein referred to as the Commissioner's representative). No special coca leaves shall be withdrawn or removed from said place of storage except in the presence of the Commissioner's representative. The importer shall identify each bale or other unit package of special coca leaves after its importation by attaching thereto a label or tag bearing the number of the permit authorizing the importation, the date withdrawn from customs custody, the inscription "Special Coca Leaves," and an individual serial number. Such bales or packages shall be kept apart from any bales or packages not containing special coca leaves. No special coca leaves shall be used for any purpose other than the purpose authorized by the act of June 14, 1930 and the regulations in Part 301 of this chapter.

§ 302.38 Manufacturing operation. (a) The manufacturer shall notify the Commissioner, at least 10 days in advance, of the commencement of the manufacturing operation with respect to special coca leaves, which operation shall thereafter be conducted to completion entirely separately and independently of any operation not involving special coca leaves.

Nothing contained in this part, however, shall be construed to prohibit the manufacture from coca leaves, other than special coca leaves, of any extract permitted by law. The manufacturing operation involving special coca leaves shall be as continuous, and completed as expeditiously, as possible, and shall be under the observation of the Commissioner's representative.

(b) Immediately prior to the introduction into the manufacturing process of any given quantity of special coca leaves, the manufacturer or his agent duly authorized for the purpose shall, when requested by the Commissioner or his representative, furnish therefrom to the Commissioner's representative such a sample (selected in the presence of the representative) as the latter may require, together with a memorandum dated and signed by the manufacturer or his said agent showing the quantity of special coca leaves from which such sample was taken and the number, and identifying marks (see § 302.37) of the original bales or unit packages of such leaves. The Commissioner's representative shall forward the sample and the memorandum to the Commissioner, or to such chemical laboratory as the Commissioner may designate. A similar sample shall be taken at the same time by the manufacturer or his agent for the purpose of analysis.

§ 302.39 Residue. At that point in the manufacturing process where the initial extract of special coca leaves undergoes a primary separation into two products, one containing principally flavoring extract and the other principally cocaine, ecgonine, and their salts and derivatives, the manufacturer or his duly authorized agent shall, in the presence of the Commissioner's representative, segregate the latter product, remove its content of recoverable alcohol, and ascertain the weight of the residue, and shall sign and deliver to the representative a dated memorandum showing such weight, the quantity of special coca leaves represented by such residue, and the number, and identifying marks, of the original bales or unit packages of such leaves. The Commissioner's representative shall forward such memorandum to the Commissioner or to such chemical laboratory as the Commissioner may designate, together with a sample of such residue, and the manufacturer shall take a similar sample for the purpose of analysis. The residue, after the taking of such samples,

The

§ 302.40 Samples. (a) At any other stage in the process where substances containing cocaine, ecgonine, or salts, derivatives, or preparations from which cocaine or ecgonine may be synthesized or made, are separated from other substances, the procedure hereinabove set forth shall be followed, including the forwarding of samples and memoranda, relative thereto, the taking of similar samples for the purpose of analysis by the manufacturer, and the destruction, after the taking of such samples, of substances required to be destroyed. manufacturer or his agent shall also furnish the Commissioner's representative a sample of finished extract as it is withdrawn from process supposedly free from cocaine, ecgonine, and salts, derivatives, and preparations from which cocaine or ecgonine may be synthesized or made, together with a memorandum dated and signed by the manufacturer or such agent showing the quantity of finished extract, the quantity of special coca leaves represented by such finished extract, and the number, and identifying marks, of the original bales or unit packages of such leaves. The memorandum relative to each quantity of finished extract withdrawn from process shall include a certificate by the manufacturer that the quantity of finished extract of special coca leaves so withdrawn does not contain any cocaine, ecgonine, or any salt, derivative, or preparation from which cocaine or ecgonine may be synthesized or made. The manufacturer or his agent shall also furnish the Commissioner's representative a sample of the spent or used special coca leaves from each factory run, and a memorandum dated and signed by the manufacturer or his agent showing the quantity of special coca leaves represented by such spent leaves, and the number, and identifying marks of the original bales or unit packages of such special coca leaves. The

Commissioner's representative shall forward such samples and memoranda to the Commissioner or to such chemical laboratory as the Commissioner may designate. Similar samples of finished extract and of spent or used special coca leaves shall be taken by the manufacturer for the purpose of analysis. The spent leaves, after taking of such samples, shall be immediately destroyed by the manufacturer by incineration, in the presence of the Commissioner's representative.

(b) The Commissioner's representative shall have authority under the direction of the Commissioner, to select and forward to the Commissioner such other samples of special coca leaves and the products thereof as are deemed appropriate, whether or not such samples are otherwise required by the regulations in this part.

§ 302.41 Commissioner's representative to have access to factory. (a) The Commissioner's representative shall have access at all times to the factory, storage rooms, and laboratories where any operation, process, or analysis involving special coca leaves, their salts, derivatives, preparations, products, or extracts is taking place, or where any such special coca leaves, their salts, derivatives, preparations, products, or extracts are situated or found.

(b) The Commissioner's representative shall be afforded a full measure of cooperation in the performance of his duties in order that the intent and purpose of the act of June 14, 1930, may be accomplished. Failure on the part of any importing manufacturer or his agent or employee to afford such cooperation to the Commission's representative, or to permit the access authorized by the preceding paragraph to the factories, storage rooms, or laboratories of such manufacturer, shall be grounds for canceling, pursuant to § 302.44, both the authority to import under the regulations in this part and the permits granted thereunder.

§ 302.42 Reports to Commissioner The manufacturer shall make such additional reports to the Commissioner, and shall furnish to him by written statement such analytical data relative to the alkaloidal content, at any stage in the process, of special coca leaves or any product therefrom and such further information regarding analytical methods, as the Commissioner may deem necessary.

§ 302.43 Discontinuance of business. In the event that any person, by reason of bankruptcy, insolvency, receivership, or voluntary or involuntary abandonment or discontinuance (other than mere suspension) of the business of manufacturing an authorized extract of coca leaves, or by reason of any other cause or condition (for example, see § 302.44 and the last paragraph of § 302.41), is unable in accordance with the act of June 14, 1930, and of the regulations in this part, to make use of any special coca leaves or of any of the products thereof the destruction of which is not otherwise provided for by the regulations in this part, such special coca leaves and such products shall be seized by the Commissioner and destroyed by incineration, provided, however, that after seizure and before destruction the manufacturer shall be given notice of the proposed destruction and the reasons therefor, and a reasonable opportunity to appear and show cause why such destruction should not be accomplished.

§ 302.44 Cancellation of permit. The Commissioner may withdraw any authorization and may cancel any permit previously granted to any manufacturer, if such manufacturer, by reason of bad faith, carelessness, incompetency, the causes for seizures specified in § 302.43 or any other cause, fails to comply with the regulations in this part, or by any act or omission fails to observe the intent or purpose of the act of June 14, 1930, Provided, however, That the manufacturer shall be given notice of the Commissioner's proposed action in that regard and the reasons therefor, and a reasonable opportunity to appear and show cause why such action should not be taken.

§302.45 Compliance with act of December 17, 1914, as amended. Nothing contained in the regulations in this part shall be construed to exempt any manufacturer from compliance with the act of December 17, 1914, as amended, and regulations thereunder.

CROSS REFERENCE: For regulations under the act of December 17, 1914, as amended, see 26 CFR Part 151.

§ 302.46 Returns required. Every manufacturer using special coca leaves imported into the United States pursuant to the act of June 14, 1930, shall render a quarterly return on Form 169 and its supplements, and shall thereon account

for all transactions involving such leaves or substances derived therefrom which contain cocaine or ecgonine, or any salts, derivatives, or preparations from which cocaine or ecgonine may be synthesized or made. This return shall be signed and sworn to by the manufacturer or his authorized agent, and rendered direct to the Commissioner of Narcotics on or before the 12th day of the month following the period for which the return is made. Such return shall include a report of all importations of special coca leaves on Form 169a, a report of all materials entered into the processes of manufacture on Form 169b, a report of the various substances produced therefrom on Forms 169c, 169d and 169e, a report of all such substances destroyed on Form 169f, and a summary of operations on Form 169g.

$ 302.47 Report of importations. The report of importations on Form 169a shall show in appropriate columns the following data as to each importation:

(a) The date of the import permit. (b) The serial number of the import permit.

(c) The name of the foreign consignor.

(d) The address of the foreign consignor.

(e) The foreign port of export. (f) The number of bales imported. (g) The serial numbers of the bales imported.

(h) The quantity imported in avoirdupois pounds.

§ 302.48 Report of materials used. The report of materials entered into the processes of manufacture on Form 169b shall show in appropriate columns the following information as to each lot of leaves dumped:

(a) The lot number or specification, a specification to be assigned to each dump for identification purposes in order to avoid repeating the serial numbers of the bales when the lot is subsequently referred to.

(b) The date the leaves were put in process of manufacture.

(c) The number of bales dumped. (d) The serial numbers of the bales. (e) The quantity of leaves put in process, stated in avoirdupois pounds.

(f) The quantity of alcohol used for each extraction or wash of the leaves, by alcohol.

(g) The quantity of water used for each water extraction or dilution.

(h) The quantity of any other or additional substance introduced at any stage into the process of manufacture.

(i) The dry weight of any filter cloth or other absorbent material to be later removed from process after saturation.

§ 302.49 Reports of manufacture. The reports of substances produced from special coca leaves, Forms 169c, 169d and 169e, shall show, in appropriate columns the following information as to each production lot or dump:

(a) The lot number.

(b) The quantity of ground leaves entered into process, in terms of avoirdupois ounces and the quantity, in ounces and grains, of alkaloid contained therein as determined by analysis.

(c) The quantity of substance in process after each distinct step in the manufacturing process and the total alkaloid contained in each, stated in ounces and grains.

(d) The quantity of exhausted or spent leaves and the quantity of each residue removed from process, and the total alkaloid contained in each, stated in ounces and grains.

(e) The weight of the used filter cloth or other absorbent material removed, after saturation.

(f) The quantity, in gallons, of finished extract produced.

§ 302.50 Report of residues destroyed. The report of residues destroyed, Form 169f, shall show for each lot destroyed, in appropriate columns the following data: (a) The lot number.

(b) The quantity of spent leaves, residues, and saturated materials destroyed, stated separately for each.

(c) The name of the Government officer witnessing the destruction.

(3) The quantity of special coca leaves put into process of manufacture during the quarter.

(4) The quantity of special coca leaves on hand at the end of the quarter.

(5) Any other transaction during the quarter which increased or decreased the quantity of raw coca leaves on hand.

(b) The summary of coca leaves in process shall show:

(1) The quantity of special coca leaves in process at the beginning of the quarter.

(2) The quantity of such leaves placed in process during the quarter.

(3) The quantity of such leaves represented by lots completed during the quarter.

(4) The quantity of such leaves represented by lots in process at the end of the quarter.

(5) Any other transaction during the quarter which increased or decreased the quantity of leaves in process.

(c) The summary of residues removed from production in processes shall show, in appropriate columns, separately as to spent leaves, each residue and saturated material, the following information:

(1) The quantity of each, on hand at the beginning of the quarter, awaiting destruction.

(2) The quantity of each removed from process during the quarter.

(3) The quantity of each destroyed during the quarter.

(4) The quantity of each on hand at the end of the quarter.

(5) Any other transaction during the quarter affecting the quantity of such residues on hand.

SUBPART E-GENERAL

AUTHORITY: §§ 302.52 to 302.59 issued under 38 Stat. 275, as amended; 21 U. S. C. 182.

§ 302.52 Importation or exportation by mail prohibited. Neither importation nor exportation of narcotic drugs shall be made by means of the regular mails or by parcel post.

§ 302.53 Medical stores on vessels. Collectors of customs may permit narcotic drugs in reasonable quantities and properly listed as medical stores of vessels to remain on such vessels if satisfied that such drugs are adequately safeguarded and used only for medical purposes. Smoking opium or opium pre