HQ 0111937 - Entry and clearance; Premature discharge of merchandise; Movement in bond; Manifested destination; Bill of lading; Inward foreign cargo; Movement by alternative means; Manifest discrepancy report - 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 > 1993 HQ Rulings > HQ 0089874 - HQ 0112120 > HQ 0111937

HQ 111937

February 24, 1992

VES-5-19-CO:R:IT:C 111937 LLB

CATEGORY: CARRIER

Mr. William E. Vajda
Daniel F. Young, Inc.
17 Battery Place North
New York, New York 10004

RE: Entry and clearance; Premature discharge of merchandise; Movement in bond; Manifested destination; Bill of lading; Inward foreign cargo; Movement by alternative means; Manifest discrepancy report

Dear Mr. Vajda:

Reference is made to your letter of October 7, 1991, in which you request that we offer an interpretation of the regulatory provisions concerning vessel cargo which is prematurely landed in a port of the United States.

FACTS:

It is stated that on September 30, 1991, the vessel SEALAND VALUE arrived in the port of New York directly from a foreign port. The vessel discharged cargo there and departed for the next scheduled port, Norfolk, Virginia. It was discovered that two containers manifested for Norfolk had been prematurely discharged in New York. Since one of the containers was actually on a through bill of lading to Baltimore, it was decided to forward the container from New York to Baltimore in bond, via truck, in lieu of lading it on the next available Sea-Land owned or leased vessel. Customs officials in Norfolk reportedly found that such a procedure was improper and that the Baltimore-bound container must, if shipped via truck, travel under special manifest procedures as provided in the Customs Regulations. The question posed is whether the position taken by Norfolk Customs is correct.

ISSUE:

Whether merchandise which is prematurely landed by a vessel may be transported, by means other than by another company-owned or chartered vessel, to a location other than the originally manifested port of entry.

LAW AND ANALYSIS:

Section 4.34(a), Customs Regulations (19 CFR 4.34(a)), contains procedures applicable to the disposition of prematurely discharged cargo. The section provides that upon receipt of a satisfactory written application, the district director at the port of premature discharge may permit the inward foreign cargo to be moved by alternative means. Provided the importing vessel actually entered the port that the prematurely discharged cargo was manifested for discharge, the cargo may be reladen on the next available vessel owned or chartered by the owner of the first vessel for transportation to the originally intended port. Alternatively, cargo not so forwarded within 30 days of unlading may be forwarded in bond by means other than such owned or chartered vessel. If such alternative movement is to be a movement by land rather than sea, resort to the provisions of Part 18, Customs Regulations (19 CFR Part 18), becomes necessary.

Section 18.10a, Customs Regulations (19 CFR 18.10a), provides special manifest provisions applicable to circumstances where no other type of bonded movement is appropriate. Specifically stated as being among those circumstances is the case of prematurely discharged merchandise, as is here under consideration. The section provides that prematurely discharged cargo may be moved from the port of premature discharge to the destination shown on the original vessel manifest. In the present case, a literal reading of the regulations would require that the merchandise move in bond from New York to Norfolk, not to Baltimore.

Inquiry must be made into the underlying purpose of the regulatory provisions. This is so because the question naturally occurs as to what interest Customs might have in this merchandise physically entering Norfolk, so long as the revenue is adequately protected. In this case, under section 1434(a), the importing entity (Sea-Land) would be required to execute a Cargo Declaration (CF 1302), in duplicate, at the port of discharge (New York). New York Customs would retain the original and forward the duplicate copy to Norfolk (the manifested port). This would act to rectify the record in both ports with regard to the discrepancies between what was manifested for each port and what was actually landed in each. Further, the merchandise would be sent to Customs Custody under bond, which bond obligation would be discharged upon delivery into that custody. Thus would control over the movement of the merchandise within the United States have been controlled and the revenue protected.

The present special manifest provisions appearing in section 18.10a, Customs Regulations (19 CFR 18.10a), were created by Treasury Decision 83-218 (T.D. 83-218). The purpose of the provision was to benefit the importer of merchandise which had either been prematurely landed or overcarried and had been the subject of an entry summary at the port where it was originally manifested. In such cases, the regulation permits the importer or carrier to include the returned merchandise in the original entry summary previously filed at the manifested port and to obtain the rate of duty applicable to that entry. The regulation is not intended to create a rigid requirement that all prematurely discharged or overcarried merchandise be physically delivered to the manifested port.

HOLDING:

Merchandise which has been prematurely discharged at a port in the United States and which has not been entered for consumption may be transported under bond for entry, to a port other than the port for which the merchandise was originally manifested.

Sincerely,

B. James Fritz

Previous Ruling Next Ruling