HQ 0112424 - Shipper's Export Declaration; Bill of Lading; Cargo Declaration Outward with Commercial Forms - United States International Trade Commision Rulings

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HQ 112424

November 24, 1992

CO:R:IT:C 112424 MLR

CATEGORY: CARRIER

Victor J. Zambetti, Esq.
Taylor, Moseley & Joyner, P. A.
501 West Bay Street
Jacksonville, Florida 32202

RE: Shipper's Export Declaration; Bill of Lading; Cargo Declaration Outward with Commercial Forms

Dear Mr. Zambetti:

This is in reference to your letter dated August 4, 1992, requesting a ruling on behalf of your client North Florida Shipping, Inc., regarding the information required on Shipper's Export Declarations (SED), Bills of Lading (BOL), and Cargo Declaration Outward with Commercial Forms (Form 1302-A).

FACTS:

North Florida Shipping, Inc. (hereinafter NFS) is a Florida corporation wholly owned by Somers Isles Shipping Limited, a Bermuda corporation. NFS is the agent of record for the CMV SOMERS ISLES, a ship of German registry which is chartered by Somers Isles Shipping Ltd. CMV SOMERS ISLES regularly transports commodities, often containerized, between Fernandina Beach, Florida, and Hamilton, Bermuda. It is stated that the shippers and consignees of these commodities include nationals of the United States and of foreign countries, individuals, corporations, partnerships, agents, non-vessel-operating common carriers (NVOCCs), freight forwarders, and consolidators.

NFS states that it has experienced various problems relating to Customs treatment of its shipments. NFS describes a typical scenario as follows: A Bermuda entity arrives in the United States and purchases items from five or six domestic merchants or manufacturers; the Bermuda entity will contract with a freight forwarder to have the items shipped to itself in Bermuda; the freight forwarder completes all the SEDs and BOLs showing the Bermuda entity as the exporter/shipper and the same Bermuda entity as the consignee; the freight forwarder delivers the items and documents to NFS to be carried on the CMV SOMERS ISLES to Bermuda; NFS presents these documents to Customs in Jacksonville; Customs either refuses to accept the documents because the documents do not reflect a domestic exporter/shipper, or accepts the documents while reserving the right to fine NFS up to $1,000 per incident for filing improper or fraudulent documents.

It is alleged that Customs in Jacksonville has a policy of only accepting SEDs that have listed as exporter a domestic entity as evidenced by an Employer Identification Number (EIN) or a Social Security Number (SSN). This policy is apparently based on FTSR Letters 151 and 152 from the Bureau of Census, Department of Commerce. NFS protests these directives because it alleges that they are not authorized by statute or regulation. It is further alleged that Customs in Jacksonville mandates that the shipper on the Form 1302-A be identical to the exporter on the SED. Therefore, it is contested that the true shipper, a foreign entity, cannot be listed on the Form 1302-A because a foreign exporter cannot be listed on the SED.

NFS states that it is time consuming and expensive to conform the documents to these Customs requirements. A typical vessel to Bermuda includes approximately 100 BOLs, plus accompanying SEDs. Furthermore, NFS states that these requirements force it to file incorrect documents because a domestic merchant must be shown as the exporter/shipper when in actuality the Bermuda entity is the exporter/shipper.

Furthermore, it is alleged that Customs in Jacksonville does not subject shipments bound to Puerto Rico and other foreign destinations to the same scrutiny as NFS shipments. NFS has also been unable to locate any other U.S. port in which Customs officers regulate export documents in the same manner or with the same penalties as in Jacksonville.

The record also contains a letter from Pan Atlantic, a consolidator and NVOCC serving the island of Bermuda. It states that as a consolidator it receives commodities from a variety of companies for individual consignees. When a sufficient quantity is collected, the commodities are delivered to NFS. As a consolidator, Pan Atlantic states that it is required to provide an SED to Customs for each supplier, although title transfers at its loading dock making the importer in Bermuda a shipper and a consignee. As an NVOCC, Pan Atlantic receives commodities from suppliers in less than container load lots for consignees. As an NVOCC, Pan Atlantic is required to present a copy of its BOL, as well as an SED for each shipment. In both instances, Pan Atlantic is expected to provide an original commercial invoice.

At Port Elizabeth in New Jersey, Pan Atlantic alleges that this paperwork is not required for shipments going to Bermuda. As a consolidator, Pan Atlantic may show the consignee as the shipper on the SED with a general description of the contents. As an NVOCC, Pan Atlantic shows itself as the shipper on the SED, and the BOL provides the number of packages, weight, etc., using the description "freight all kinds." The commercial invoices are not required.

ISSUES:

For the sake of clarity, we reiterate the questions presented to us:

I. A foreign entity can be listed as the exporter on a Shipper's Export Declaration when that foreign entity has purchased the shipped goods in the United States, even if the exporter is shipping the goods to itself in a foreign country.

II. A foreign entity can be listed as the shipper on a Cargo Declaration Outward with Commercial Forms (Form 1302-A) and the accompanying bills of lading when that foreign entity has purchased the shipped goods in the United States, even if the shipper is shipping the goods to itself in a foreign country.

III. The entity listed as the shipper on the Cargo Declaration Outward with Commercial Forms and the accompanying bills of lading need not be the same entity listed as the exporter on the Shipper's Export Declaration.

IV. Export shipments to Puerto Rico and other foreign destinations require the same documentation, including Shipper's Export Declarations and Cargo Declaration Outward with Commercial Forms, completed to the same standards, as NFS shipments to foreign countries.

V. Customs officers in Jacksonville cannot arbitrarily and capriciously interpret and enforce Customs' rules and regulations; Customs' rules and regulations must be interpreted and enforced in a uniform manner throughout the United States.

LAW AND ANALYSIS:

I. A foreign entity can be listed as the exporter on a Shipper's Export Declaration when that foreign entity has purchased the shipped goods in the United States, even if the exporter is shipping the goods to itself in a foreign country.

Title 13, United States Code, Section 303, states in pertinent part that "to assist the Secretary (of Commerce) to carry out the provisions of this chapter" (i.e., the collection and publication of foreign commerce and trade statistics), "the Secretary of the Treasury shall collect information in the manner prescribed by the regulations issued pursuant to this chapter from persons engaged in foreign commerce or trade...and from the owners or operators of carriers." Section 30.1(a) of the Foreign Trade Statistics Regulations {15 CFR 30.1(a)} provides for the filing of SEDs by exporters for all commodities shipped from the United States to a foreign country unless specifically exempted. The information taken from the SED is the source of statistical information that appears in the Bureau of the Census monthly foreign trade report entitled "U.S. Exports: Commodity by Country."

Shipper's Export Declarations are also required under the Export Administration Regulations enforced in part by the Customs Service for the Bureau of Export Administration, Department of Commerce pursuant to 50 U.S.C. App. 2411. Specifically 15 CFR 786.3(b) states that an SED is an export control document which indicates the existence of a validated export license or permission for an export under an applicable general license.

NFS alleges that neither the Customs or Foreign Trade statutes or regulations prohibit the naming of a foreign entity as the exporter on an SED when the foreign entity is shipping its commodities under a general license. Particularly, NFS notes that 15 CFR 30.7(d)(2) expressly provides for the naming of a foreign entity as exporter: "If neither an Internal Revenue service EIN nor an SSN has been assigned, for example, in case of a foreign entity as the exporter, the EIN or SSN reporting requirement does not apply." Therefore, NFS alleges that prohibiting the naming of a foreign entity as exporter would make this section of the regulations meaningless.

Furthermore, 15 CFR 30.4(a) states in pertinent part that "[i]n every event the data required in the Shipper's Export Declaration shall be complete and correct and shall be based on personal knowledge of the facts stated, or on invoices or information furnished by the principal." NFS alleges that if the foreign principal or its agent knows or has information showing that the foreign principal is the exporter, it is obligated to report that fact on the SED. Moreover, a principal often furnishes NFS a document or bill of lading showing a foreign entity as the exporter. Prohibiting the exporter from honestly reporting itself as the exporter would force it to perjure itself and violate the statute. NFS reasons that because the Bermuda entity purchases commodities from U.S. manufacturers, title transfers in the United States, and because the Bermuda entity arranges for shipment to itself, it should be shown as the exporter/shipper.

Section 30.7(d), Foreign Trade Statistics Regulations {15 CFR 30.7(d)} states that the exporter named on the SED, in general, shall be the principal or seller in the export transaction. For exports moving under a validated license, the exporter named on the SED shall be the licensee named on the validated export license. Looking at section 772.3(b)(1)(ii), Export Administration Regulations {15 CFR 772.3(b)(1)(ii)}, it states that the application for an export license "may be made only by a person subject to the jurisdiction of the United States who is in fact the exporter, or by his duly authorized agent. An application may be made on behalf of a person not subject to the jurisdiction of the United States by an authorized agent in the United States, who then becomes the applicant." Furthermore, 15 CFR 772.3(b)(1)(i) states that for this purpose the identity of the applicant and his role in the transaction, and not the "terms of sale" are of primary concern.

The issue here does not pertain to commodities exported under a validated export license but under a general license for which no application must be made. A general license is generally available for use by all persons. 15 CFR 770.2. A person is defined as an individual, corporation, partnership, association, company, or any other kind of organization, situated, residing, or doing business in the United States or any foreign country, including any government or agency thereof, as well as a citizen or national of the United States or any foreign country. 15 CFR 770.2. Therefore, it appears that a foreign entity may export commodities under a general license.

We acknowledge that section 30.7(d)(2), Foreign Trade Statistics Regulations {15 CFR 30.7(d)(2)} does provide for a foreign entity as exporter on the SED; however, this would likely occur in instances where foreign commodities are transitting the United States. Therefore, while the regulations do provide for a foreign entity as an exporter, both the Foreign Trade Statistics Regulations and Export Administration Regulations make numerous references for the preparation and filing of the SED by an authorized agent, which implies for export control purposes that if the shipper, owner, or consignor (the person who, pursuant to 15 CFR 30.4(a) shall prepare and sign the SED) is not present in the United States at the time of export and therefore not subject to the jurisdiction of the United States, an authorized agent, who is present in the U.S. to facilitate the export of the commodities, should be shown on the SED rather than a foreign entity. Sections 786.3(e)(1) and (2), Export Administration Regulations {15 CFR 786.3(e)(1) and (2)}, state that a "forwarding agent" is a person authorized by an exporter to perform for the exporter actual services which facilitate the export of the commodities described in the SED, and that unless the exporter states otherwise in the power of attorney, the forwarding agent named by the exporter shall be deemed the true agent of the exporter for export control and customs purposes.

FTSR Letters 151 and 152 clarify the regulations by stating that "when the actual exporter is not subject to the jurisdiction of the United States, i.e., a foreign exporter, the authorized agent in the United States should appear as exporter and show his or her (the authorized agent's) Internal Revenue service Employer Identification Number on the Shipper's Export Declaration." As to NFS's claim that FTSR Letters 151 and 152 are contrary to the statutes and regulations, Customs is not in the position to interpret the legality of ruling letters issued by other federal agencies; consequently, any concerns regarding this matter should be addressed to the Bureau of the Census. However, we do point out that in preparing and filing export declarations, the shipper must comply with all pertinent export control regulations as well as the foreign trade statistics regulations. 15 CFR 30.2. A "law or regulation relating to export control" is defined in 15 CFR 770.2 as a "statute, proclamation, executive order, regulation, rule, license, or order applicable to any conduct involving an export transaction."

Consequently, Customs may accept SEDs with the Bermuda entity shown as the exporter if it is present in the United States at the time the CMV SOMERS ISLES departs from the United States (i.e., and is therefore subject to the jurisdiction of the United States even though no EIN or SSN is provided). If the Bermuda entity is not present in the United States when the CMV SOMERS ISLES departs from the United States, its duly authorized agent that is responsible for effecting the export (i.e., freight forwarder) shall be shown as the exporter on the SED.

The U.S. Customs Service also has an interest in assuring that the exporter named on the SED is subject to the jurisdiction of the United States because "when cargo is loaded on a commercial vessel for export at a port...the exporter of that cargo (the name that appears on the SED) is liable for the payment of the port use fee at the time of loading." 19 C.F.R.

II. A foreign entity can be listed as the shipper on a Cargo Declaration Outward with Commercial Forms and the accompanying bills of lading when that foreign entity has purchased the shipped goods in the United States, even if the shipper is shipping the goods to itself in a foreign country.

The U.S. Customs Service is empowered to collect a ship's manifest and other commercial documents relating to outward- bound cargo by 46 U.S.C. App. 91, implemented in part by 19 CFR 4.63. NFS alleges that neither the statutes or regulations prohibit the naming of a foreign entity as the shipper on any form or commercial document relating to the ship's manifest.

Title 46, United States Code Appendix, section 93(b) states in pertinent part:

The following information shall be included on such manifest, or on attached copies of bills of lading or equivalent commercial documents.

(1) Name and address of shipper.
(2) Description of the cargo.
(3) Number of packages and gross weight.
(4) Name of vessel or carrier.
(5) Port of exit.
(6) Port of destination.

NFS states that 19 CFR 4.63(c), which lists the information required on the Cargo Declaration Outward with Commercial Forms, (Customs Form 1302-A), elaborates on four of these six items but does not modify or restrict the requirements of "(1) Name and address of shipper." Furthermore, NFS states that Customs in Jacksonville has no authority to elaborate, modify, or restrict the parameters surrounding the requirements of the name and address of the shipper.

While the Customs Regulations do not elaborate on the term "shipper", in Louis Rosenfield v. United States, 18 CCPA 146, T.D. 44361 (1930), a regulation was discussed which required a certificate from the "foreign seller or shipper." The United States Customs Court and the United States Court of Customs and Patent Appeals held that "shipper" is construed "not to include one having no more interest in or knowledge of the merchandise than merely that involved in the physical function of placing together, packing, and starting the same in transit." It was determined that the shipper ordinarily would be the seller, the purchaser, or an agent for the seller or buyer who made the sale or purchase. In any event, it was stated that the declaration by one competent to declare the value and facts of the invoice would be accepted.

We also note that section 580.3(t) of the Federal Maritime Regulations {46 CFR 580.3(t)}, provides that a "shipper" is an "owner or person for whose account the ocean transportation of cargo is provided or the person to whom delivery is to be made." We therefore conclude that a shipper may be a foreign entity if that entity has knowledge of the value and facts of the invoices in question, and which is provided on Form 1302-A or on the attached BOLs.

III. The entity listed as the shipper on the Cargo Declaration Outward with Commercial Forms and the accompanying bills of lading need not be the same entity listed as the exporter on the Shipper's Export Declaration.

NFS states that the SED is a document expressly prepared for the Bureau of the Census, Department of Commerce. After submitting the SED, neither the exporter nor any other principal in the commercial chain possesses or utilizes this document. On the other hand, NFS states that the BOL accompanying the Form 1302-A are not expressly prepared for the Customs Service. A BOL is an internationally recognized and utilized document. It is owned by the shipper, not the Customs Service, and is used and relied upon by many in the commercial chain. By mandating that a potentially false and misleading "shipper" be included on a BOL of lading, NFS alleges that the Customs Service improperly interferes with the property and worldwide commerce of others. Furthermore, the SED requires the name of the "exporter", and the Form 1302-A requires the name of the "shipper." It is alleged that an "exporter" and a "shipper" could be two different entities.

The Export Administration Regulations specifically provide that for any shipment under a validated export license, the SED and the outbound bill of lading must be consistent. 15 CFR 786.4(b). The bill of lading is not consistent if it names as shipper any person other than the licensee or his duly authorized forwarding agent. The regulations do not discuss such requirements for shipments made under a general license.

Returning to 46 U.S.C. App. 93(b), as discussed above, it requires the name of the shipper on the manifest or on attached BOLs. Therefore, the shipper named on the Form 1302-A and BOL should be the same. A BOL is the contract of carriage and receipt for commodities issued by the carrier to the shipper. 15 CFR 770.2. In evaluating who the shipper should be on the BOL, it is important to define "freight forwarder" and "NVOCC."

A "freight forwarder", defined in 19 CFR 112.1(e), is one who engages in the business of dispatching shipments on behalf of other persons, for a consideration, in foreign or domestic commerce between the United States or its territories, and foreign countries, and of handling the formalities incident to such shipment, and is authorized to operate as such by any agency of the United States. An NVOCC, defined in 46 CFR 580.2(l), is a common carrier that does not operate the vessels by which the ocean transportation is provided and is a shipper in its relationship with an ocean common carrier. An NVOCC acts as a carrier in its relationship with its customer, and as a shipper in its relationship with the carrier. The NVOCC has a BOL as a carrier, and an ocean BOL as a shipper. A freight forwarder is not responsible for the cargo but only completes the required paperwork. The main difference, therefore, is liability. These characteristics were acknowledged in Chicago, Milwaukee, St. Paul and Pac. R. Co. v. Acme Fast Freight, Inc., 336 U.S. 465, 484. (See also Customs Ruling 215974, dated September 13, 1983.)

Therefore, it is possible to envision a situation where the Bermuda entity, who has title to the commodities in the United States and therefore has knowledge concerning the pertinent facts of the invoices (as discussed above, is required), is the shipper, while the freight forwarder, as an authorized agent, is shown as the exporter on the SED since the Bermuda entity is not present in the United States at the time of export. It also may be possible that the Bermuda entity, as the principal in the export transaction, is the exporter while the NVOCC is shown as the shipper on the BOL in its relationship with the carrier. However, we reiterate that the listed shipper should have knowledge as to the shipments contents, which does not seem to be satisfied when Pan Atlantic, as an NVOCC, merely presents a BOL with a description "freight all kinds."

IV. Export shipments to Puerto Rico and other foreign destinations require the same documentation, including Shipper's Export Declarations and Cargo Declaration Outward with Commercial Forms, completed to the same standards, as NFS shipments to foreign countries.

NFS claims that shipments to Puerto Rico should be handled in the same manner as NFS shipments to other foreign countries and that the enforcement of the requirements should be applied consistently among all shippers in the Jacksonville area.

Section 30.1(a)(2)(i), Foreign Trade Statistics Regulations {15 CFR 30.1(a)(2)(i)} expressly requires that shipments to Puerto Rico from the United States be accompanied by SEDs. Section 30.20(a), Foreign Trade Statistics Regulations {15 CFR 30.20(a)}, provides that carriers transporting merchandise between Puerto Rico and the United States shall not depart until manifests (for vessels, aircraft, and rail carriers) and SEDs have been filed with the Customs Director. Similarly section 4.84(c), Customs Regulations {19 CFR 4.84(c)}, provides, in pertinent part:

A vessel...transporting merchandise from a port in any State or the District of Columbia to any non-contiguous territory of the United States (including Puerto Rico), ...shall not be permitted to depart without filing a complete manifest, when required by regulations of the Bureau of the Census (15 CFR part 30), and all required shipper's export declarations, unless before the vessel departs an approved bond is filed for the timely production of the required documents, as specified in 15 CFR 30.24....

Referring to section 30.24(a) of the Foreign Trade Statistics Regulations {15 CFR 30.24(a)}, it provides that the Customs Director may permit a carrier to depart prior to the filing of a complete manifest and all required SEDs, provided a bond is on file with Customs, the condition of which is that a complete manifest and all required SEDs shall be filed not later than (in the case of Puerto Rico) the seventh business day after departure.

Therefore, we conclude that according to the regulations, for shipments between the United States and Puerto Rico, before departure the master is required to file manifests and SEDs unless a bond is on file with Customs. However, 15 CFR 30.40 also provides that subject to the Customs Director's approval, shipper's may file one SED for all shipments laden on one vessel going to Puerto Rico, so that whether or not such shipments are made to one or several consignees, no consignee information is required.

V. Customs officers in Jacksonville cannot arbitrarily and capriciously interpret and enforce Customs' rules and regulations; Customs' rules and regulations must be interpreted and enforced in a uniform manner throughout the United States.

NFS alleges that Customs in Jacksonville acts in an arbitrary and capricious manner when the rules and regulations are interpreted and enforced differently from all other Customs offices. "Administrative agencies must execute the law committed to them fairly and honestly and treat everyone alike according to the standards and rules of action prescribed." 2 Am. Jur. 2d Admin. Law 193. NFS claims that shippers in the Jacksonville area are treated differently than shippers in other domestic ports and as a result of Jacksonville's selective enforcement, NFS's clients could choose another port from which to export, causing NFS and SISL to terminate operations. NFS alleges that the instant case is an "especially egregious example of unbridled power in that one sole branch officer can arbitrarily and capriciously interpret the regulations differently than any other officer in the system and then enforce them against selective shippers, causing them irreparable harm."

NFS cites Title 46, United States Code Appendix, section 91 which provides in part:

The master or person having the charge or command of any vessel bound to a foreign port shall deliver to the collector of the district from which said vessel is about to depart a manifest of all the cargo on board the same, and the value thereof, by him subscribed, and shall swear to the truth thereof; whereupon the collector shall grant a clearance for such vessel and her cargo....

NFS states that the use of the word "shall" gives rise to the presumption that the collector (responsible Customs officer) has no discretion in the granting of clearance once the sworn manifest has been presented. NFS claims that having complied with the conditions entitling it to clearance by the explicit wording of 46 U.S.C. App. 91 (i.e., (1) Name and address of shipper), Customs has the duty to grant clearance.

NFS cites Hendricks v. Gonzalez, 67 F. 351, 353, 14 C.C.A. 659 (2d Cir. 1895), to show that the granting of clearance is mandatory unless some other statutory authority justifies the withholding of clearance. In Hendricks, the United States Circuit Court of Appeals stated:

The plaintiff having complied with the conditions entitling him to clearance by the law of Congress (Rev. St. 4197 [46 U.S.C. App. 91]), it was the duty of the defendant, as collector of the port, to grant a clearance for the vessel and her cargo, unless he was justified in refusing to do so by some other statutory authority. Neither the secretary of the treasury nor the president could nullify the statute, and, though the defendant may have thought himself bound to obey the instructions of the former, his mistaken sense of duty could not justify his refusal of the clearance, and these instructions afforded him no protection unless they were authorized by law.

Id. at 353. NFS argues that no other statutory or regulatory authority justifies that only a domestic entity may be listed as the shipper, and that neither a FTSR Letter nor a directive from an employee of the Bureau of the Census concerning a completely different document (the SED) can nullify the statute or CFR regulations.

In Hendricks, the statute in question (i.e., the neutrality law), authorizing the detention of a vessel, was rather specific, unlike the statutes and regulations (discussed below) which provide Customs with authority in the instant case. Furthermore, whether the collector had reasonable cause to refuse clearance was determined to be a question of fact; although it was also determined that as a matter of law the evidence did not sustain a finding of probable cause because all of the statute's elements were not present.

NFS also cites FTC v. Universal-Rundle, 387 U.S. 244, 251 (1967) [hereinafter FTC], where the United States Supreme Court stated that an agency "does not have unbridled power to institute proceedings which will arbitrarily destroy one of many law violators in an industry." We note that the Supreme Court also stated, whether an allegedly illegal practice reflects fact is a question "that call[s] for discretionary determination by the administrative agency." Id. at 250, quoting Moog Industries v. Federal Trade Commission, 355 U.S. 414, 413. Thus, it was held that it was not within the scope of the Seventh Circuit Court of Appeals to overthrow the Commissions determination because the determination was based upon reasonable evaluation. 387 U.S. at 252.

Two Attorneys General cases are also cited that state that a ship has an absolute right to clear port unless the ship is categorically violating the express terms of a statute:

...provision (of this section) that the collector shall grant a clearance for the vessel and cargo is mandatory...provided all statutory provisions have been complied with and the papers presented...are regular and legal upon their face, and provided...that the vessel is not burdened with a lien in favor of the United States.

34 Op. Att'y Gen. 244 (1923). We note that the Attorney General also found sufficient statutory ground for refusing clearance, and that by not enforcing the penalty, if the vessel were of foreign registry it may never return to the jurisdiction of the United States.

The second Attorney General case NFS cites, states:

(Congress did not intend clearance to depend merely on the opinion or discretion of the collector and this section requires the collector to grant clearance unless he has some distinct statutory authority for refusing as Congress has specifically provided for refusing clearance in cases where it thought such a course proper.)

29 Op. Att'y Gen. 364 (1912). However, we point out that the statute disallowed seizure unless the owner or master was consenting to the illegal act. In the case under consideration, Customs is provided with ample authority to enforce the Foreign Trade Statistics and Export Administration Statutes and Regulations.

Clearance furnishes a record of cargo moving outward for statistical purposes and also provides a control over departure of carriers to insure compliance with navigation laws. Customs Ruling 101796, dated September 26, 1975. We believe Customs has the authority to verify the outward foreign manifest (i.e., Form 1302-A and SED) in accordance with 19 U.S.C. 1581(a), which grants Customs officers the authority to go aboard a carrier to "examine the manifest and other documents and papers and examine, inspect, and search" the vessel. If it appears "that a breach of the laws of the United States is being or has been committed", the carrier is subject to seizure. 19 U.S.C. 1581(e). Under 46 U.S.C. App. 91 if the master of a vessel delivers a false manifest or fails to deliver a manifest, he is liable to a penalty of not more than $1,000 or less than $500, and the vessel may be detained in any port of the United States until the penalty is paid or secured.

Furthermore, section 30.11, Foreign Trade Statistics Regulations (15 CFR 30.11) authorizes Customs, for purposes of verifying the completeness and accuracy of the information reported as required under 30.7 and 30.8, and for other purposes under the regulations in part 30,

...to require the owners and operators of exporting carriers, as well as the exporters or their agents...at the time of exportation...to produce for inspection or copying shipping documents, invoices, orders, packing lists, correspondence, as well as any other relevant documents and to furnish other information bearing upon a particular exportation....

Section 786.8(b) of the Export Administration Regulations {15 CFR 786.8(b)} authorizes Customs to take the following types of action, among others (emphasis added): (1) Examine commodities; (2) Inspect documents; (3) Question individuals; (4) Prohibit lading (i.e., the customs office is authorized to prevent the lading of commodities or technical data on an exporting carrier whenever the customs office has reasonable cause to believe that the export or removal from the United States is contrary to the Export Administration Regulations); (5) Inspect exporting carrier; (6) Seize and detain any commodities or technical data whenever an attempt is made to export them in violation of the Export Administration Regulations, or when it knows or has probable cause to believe....; (7) Prevent departure of carrier (i.e., the customs office is authorized under Title 22 of the United States Code, section 401, et seq., to seize and detain, either before or after clearance, any vessel...which has been or is being used in exporting or attempting to export any commodity or technical data intended to be, being, or having been exported in violation of the Export Administration regulations); (8) Order the unloading (i.e., the customs office is authorized to unload, or to order the unloading of commodities or technical data from any exporting carrier, whenever the customs office has reasonable cause to believe such commodities or technical data are intended to be, or are being, exported or removed from the United States contrary to the Export Administration Regulations); (9) Order the return of commodities; (10) Designate time and place for clearance.

Since the various statutes and regulations, detailed above, refer to the "appear[ance]", "reasonable cause", and "probable cause", we also find that the determination whether or not to grant clearance is a question of fact. In Hendricks the statute was more specific than those at hand; therefore, we conclude that based upon the facts before us, Customs in Jacksonville did not act "patently arbitrary or capricious." FTC at 250.

Furthermore, in authorizing Customs to inspect various documents, pursuant to 15 CFR 30.11,

Customs shall refuse to accept Shipper's Export Declarations containing known errors and omissions, and may require their correction, but acceptance by the Customs Director shall not be construed as evidence that all requirements have been met, and such acceptance shall not relieve the exporter of the responsibility to furnish complete and correct information at a later time if all requirements have in fact not been properly met.

Therefore, although NFS claims that other ports do not subject shipments to the same scrutiny as Jacksonville, this does not necessarily suggest that all requirements were correctly met at those ports.

HOLDING:

I. The exporter on a Shipper's Export Declaration may be a foreign entity when the foreign entity has purchased the commodities in the United States and is shipping them to itself in a foreign country if, for export control purposes, it is present in the United States at the time of export and therefore subject to the jurisdiction of the United States. Otherwise, an authorized agent, who is present in the U.S. to facilitate the export of the commodities, should be shown on the SED.

II. A foreign entity can be listed as the shipper on a Cargo Declaration Outward with Commercial Forms and the accompanying bills of lading when that foreign entity has purchased the shipped commodities in the United States and is shipping them to itself in a foreign country, provided the foreign entity is competent to declare the value and facts of the information on the Form 1302-A and the accompanying bills of lading.

III. Although it is preferable that the entity listed as the shipper on the Cargo Declaration Outward with Commercial Forms and on the accompanying bills of lading is the same entity listed as the exporter on the Shipper's Export Declaration, this is not a mandatory requirement when commodities are exported under a general license.

IV. According to the regulations, for shipments between the United States and Puerto Rico, before departure the master is required to file manifests and SEDs unless a bond is on file with Customs.

V. Customs has ample authority to enforce the Foreign Trade Statistics and Export Administration Statutes and Regulations, and based on the facts Customs in Jacksonville did not act in an arbitrary and capricious manner; further, although NFS shipments were cleared without consequence at other U.S. ports, this does not necessarily suggest all requirements were correctly met.

Sincerely,

Acting Chief

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