Sec. 146.96  Approval of other recordkeeping systems.

    (a) Approval procedure. An operator must seek prior approval of 
another recordkeeping procedure by submitting the following to the 
Director, Office of Regulatory Audit:
    (1) An explanation of the method describing how attribution will be 
made when a finished product is removed from or consumed in the subzone, 
and how and when the feedstocks will be decremented;
    (2) A mathematical example covering at least two months which shows 
the amounts attributed, all necessary relative value calculations, the 
dates of consumption and removal, and the amounts and dates that the 
transactions are reported to Customs.

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    (b) Failure to comply. Requests received that fail to comply with 
paragraph (a) of this section will be returned to the requester with the 
defects noted by the Director, Office of Regulatory Audit.
    (c) Determination by Director. When the Director, Office of 
Regulatory Audit, determines that the recordkeeping procedures provide 
an acceptable basis for verifying the admissions and removals from or 
consumption in a refinery subzone, the Director will issue a written 
approval to the applicant.