HQ 0222996 - Transfer within a port of unentered merchandise; 19 CFR 4.38(a); 19 CFR 122.2; 19 CFR 112.21 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0112146 - HQ 0450647 > HQ 0222996

HQ 222996

May 21, 1991

AIR-1-CO:R:C:E 222996 PH

CATEGORY: ENTRY

Robert A. Calandra, Esq.
Ronald W. Gerdes, Esq.
Sandler, Travis & Rosenberg, P.A.
505 Park Avenue
New York, New York 10022-1106

RE: Transfer within a port of unentered merchandise; 19 CFR 4.38(a); 19 CFR 122.2; 19 CFR 112.21

Dear Messrs. Calandra and Gerdes:

In your letters of January 31 and March 26, 1991, you request confirmation that your client, Burlington Air Express (the inquirer) may receive in-bond cargo at its carrier facility on a "house-to-house" basis and need not utilize a container freight station. Our ruling follows.

FACTS:

You state (all material in the FACTS portion of this ruling is based on statements in your January 31 and March 26, 1991, letters which are assumed to be accurate and complete in every material respect (see 19 CFR 177.9(b)(1))) that the inquirer ships air freight into ports of entry of the United States. The air freight is moved via delivery ticket, permit, or "D.A.D." (Delivery Authorization Document) by a licensed bonded cartman to one of the inquirer's bonded international air carrier facilities which is located at or adjacent to the airport of arrival. The merchandise is then cleared by Customs and entered.

The inquirer is both a bonded carrier and an international carrier. The inquirer operates a "hub" facility (see 19 CFR 128.1(d)) at Fort Wayne, Indiana. The inquirer has cargo facilities at each of its locations at ports of entry but it does not operate Customs bonded warehouses at these locations. The inquirer's wholly owned subsidiary, Burlington Air Imports (the subsidiary), is a licensed Customs broker.

The merchandise under consideration will be consigned from and to the inquirer but it will be owned, in practically all situations, by third parties not related to the parent corporation. The subsidiary may or may not act as Customs broker with regard to the merchandise, depending on the wishes of the parties in interest. Reports of arrival (of the arriving aircraft), permits to unlade, and manifests (of the merchandise) will be in accordance with applicable law and regulations and local guidelines. The merchandise will be entered within the time requirements related to the lay period. The merchandise will be entered by the party who has the right to make entry under the applicable law and regulations (i.e., the owner, purchaser, or a Customs broker). If a Customs broker is involved in the transaction, the broker may or may not be the subsidiary.

ISSUE:

May merchandise which is brought into the United States on one air carrier be transferred, before the merchandise is entered, to the facility of the bonded carrier and international carrier to which the merchandise is consigned?

LAW AND ANALYSIS:

Section 4.38(a), Customs Regulations (19 CFR 4.38(a)), provides, in part, that:

... The district director may authorize unentered merchandise brought in by one carrier for the account of another carrier to be transferred within the port to the latter carrier's facility. Upon receipt of the merchandise the latter carrier assumes liability for the merchandise to the same extent as though the merchandise had arrived on its own vessel.

Pursuant to 49 U.S.C. App. 1509(c) and 19 CFR 122.2, aircraft arriving in the United States and the persons and merchandise carried thereon are subject to the laws and regulations applicable to vessels, except as otherwise provided for in the Customs Regulations. There is no provision for aircraft analogous to that in 19 CFR 4.38(a) (quoted above). Therefore, the provision in 19 CFR 4.38(a) is applicable to aircraft. We note that this provision is only applicable to the transfer of unentered merchandise within a port (i.e., transfer under this provision may not be to a facility outside a port, even if "adjacent to the port of arrival"; such a transfer would be subject to the transportation-in-bond requirements in 19 CFR Part 18). We also note that this provision is discretionary; it merely authorizes the district director to permit the transfer of unentered merchandise from an arriving carrier to the facility of the carrier for which the merchandise was brought into the United States under the circumstances set forth in the provision. Exercise of this discretion by the district director would be dependent on the particular circumstances involved.

Even if the district director grants the authorization provided for in 19 CFR 4.38(a) (i.e., in this case, permitting unentered merchandise brought in for the account of the inquirer to be transferred from the carrier on which it arrived to the facility of the inquirer), the usual requirements applicable to consumption entries must be complied with. That is, in addition to the other entry requirements in 19 U.S.C. 1484 and 19 CFR Parts 141-143), the entry and entry documentation must be timely filed (see 19 CFR 141.5 and 142.12) and entry must be made by a person with the right to make entry (see 19 U.S.C. 1484 and 19 CFR 141.11). In this regard, since the inquirer would be a nominal consignee, a Customs broker designated by the inquirer to make entry would be required to be the importer of record (see Customs Directive 3530-02, November 6, 1984). Furthermore, unless specifically exempted (see 19 CFR 125.12), the transfer of the unentered merchandise from the carrier on which it arrived to the facility of the inquirer must be performed by a licensed Customs cartman (see 19 CFR 112.21).

HOLDING:

A district director has the discretion, under 19 CFR 4.38(a), to authorize the transfer of merchandise, before the merchandise is entered, from the air carrier on which the merchandise was brought into the United States to the facility of the bonded carrier and international carrier to which the merchandise is consigned, provided that:

1. The transfer is within the port of arrival;

2. The transfer is performed by a licensed Customs cartman, unless specifically exempted; and

3. The usual entry requirements (e.g., in particular, those relating to time of entry and right to make entry) are complied with.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling