HQ 0109725 - Interpretation Request of 19 CFR 123.14 - United States International Trade Commision Rulings

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HQ 109725

October 25, 1988

BOR-7-04-CO:R:P:C 109725 GV

CATEGORY: CARRIER

C. Anthony Davis, Esq.
Allison, Davis and Baldwin
Suite 1200 - IBM Building
Seattle, Washington 98101

RE: Interpretation Request of 19 CFR 123.14

Dear Mr. Davis:

This is in reference to your letter of August 24, 1988, on behalf of your client, a Canadian common carrier, requesting a ruling regarding the interpretation of section 123.14, Customs Regulations. Your inquiry specifically concerns the meaning of the term "regularly scheduled trip" and the ramifications of the interchanging of foreign-based equipment while in the United States.

FACTS:

A Canadian-based common carrier dispatches from Canada tractors and trailers to various destinations in the States of Washington, Oregon and California for freight to be loaded for return trips to Canada. These vehicles must be at their points of loading every Monday, Tuesday and Friday of every week, 52 weeks per year. Some of the common areas of the scheduled service are Seattle, Portland, Sacramento, the Oakland-San Jose area and the greater Los Angeles area. All equipment travels on Interstate 5 and then takes the most direct route to the point at which it will load the freight destined for Canada. The trips to these destinations are scheduled and run regardless of the availability of freight to be taken from Canada to these points in the United States. Conversely, the carrier must load and schedule equipment destined for the United States with Canadian freight whether there are anticipated loads for the return trip to Canada. In any event, at no time during the year are there less than 40 such schedules in any given week. Based upon the seasonal nature of
agricultural products which the carrier transports, the growing seasons of certain commodities may dictate to a certain extent the number of trips which may be made to or from the United States. A specific item of equipment is not dedicated to any given route for any given period of time. In other words, there is no way to determine what item of equipment will be on what route at any given time.

ISSUE:

Whether Canadian-based tractors and trailers are considered to be engaged in regularly scheduled service within the meaning of 19 CFR 123.14(b) and (c)(1) when they must be at their points of loading in the United States every Monday, Tuesday and Friday of every week, 52 weeks per year no less than 40 times a week, regardless of the availability of freight to be transported?

LAW AND ANALYSIS:

Section 141.4, Customs Regulations (19 CFR 141.4) provides that entry as required by title 19, United States Code, section 1484(a) (19 U.S.C. 1484(a)), shall be made of every importation whether free or dutiable and regardless of value, except for intangibles and articles specifically exempted by law or regulations from the requirements for entry. Since the foreign-based equipment in question is not within the definition of intangibles as shown in General Headnote 5, Tariff Schedules of the United States (19 U.S.C. 1202), it is subject to entry and payment of any applicable duty if not specifically exempted by law or regulations.

Instruments of international traffic may be entered without entry and payment of duty under the provisions of 19 U.S.C. 1322. To qualify as instruments of international traffic, trucks having their principal base of operations in a foreign country must be arriving in the United States with merchandise destined for points in the United States, or arriving empty or loaded for the purpose of taking merchandise out of the United States (see section 123.14 (a), Customs Regulations (19 CFR 123.14(a)).

Section 123.14(c), Customs Regulations (19 CFR 123.14(c)) states that with one exception, a foreign-based truck, admitted as an instrument of international traffic under section 123.14, shall not engage in local traffic in the United States. The exception, set out in section 123.14(c)(1), states that such a vehicle, while in use on a regularly scheduled trip, may be used in local traffic that is directly incidental to the international schedule.

A carrier may be considered as engaged in regularly scheduled service whether trips are scheduled hourly, daily, weekly, etc., provided the trips are regular, not varied, and are over an established route. In other words, the trips must be on a regular schedule as opposed to being made if and when a load is available.

Customs determinations as to whether a particular vehicle is in use on a regularly scheduled trip are made on a case-by- case basis after reviewing all relevant information regarding the movement of the vehicle(s) in question.

The information provided in your letter of August 24 indicates that the subject Canadian-based tractors and trailers are engaged in regularly scheduled service.

HOLDING:

Canadian-based tractors and trailers are considered to be engaged in regularly scheduled service within the meaning of 19 CFR 123.14(b) and (c)(1) when they must be at their points of loading in the United States every Monday, Tuesday and Friday of every week, 52 weeks per year, no less than 40 times a week, regardless of the availability of freight to be transported.

We note that your second matter of inquiry concerns the interchange of equipment while in the United States. You ask that in making the above determination we also respond to two hypotheticals. Pursuant to section 177.7, Customs Regulations (19 CFR 177.7) no ruling letter will be issued with regard to transactions or questions which are essentially hypothetical in nature. Accordingly, we decline to issue any ruling with regard to the hypotheticals posed in your letter.

Sincerely,

B. James Fritz

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