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HQ 224913


January 21, 1994

ENT-1-03-CO:R:C:E 224913 CB

CATEGORY: ENTRY

District Director
U.S. Customs Service
P. O. Box 3130
(Juarez-Lincoln Bridge)
Laredo, TX 78044-3130

RE: Request for Internal Advice on Filing of In-Bond Entries by Agent who is not a Licensed Broker; 19 U.S.C. 1641

Dear Madam:

This is in response to your request for internal advice (your file BRO-2-01-L:O AG) dated April 19, 1993 regarding the above- referenced subject matter.

FACTS:

You have had several telephonic inquiries from members of the Brownsville Licensed Brokers Association concerning the propriety of a person, who is not a licensed Customs broker, soliciting business involving the filing of in-bond entries. Members of the Laredo Brokers Association, who were interviewed by the Office of Organizational Effectiveness Team during the recent survey of that District also complained about this matter.

You state that 19 CFR 111.4 (we believe the correct citation is 111.3(d)) and 18.11(b)(3), and Customs Directives 3240-33 and 3530-002 appear to allow a bonded carrier to prepare and file the in-bond entry. However, licensed brokers feel such activity and business require a licensed broker. You have posed the following questions:

ISSUES:

1. Is the described activity considered "Customs business" which can only be transacted by a licensed broker? If not, what is the rationale for this determination?

2. If it is not "Customs business", does the bonded carrier have the right to make entry given the circumstances spelled out in your memorandum?

LAW AND ANALYSIS:

Section 212 of the Tariff and Trade Act of 1984, (Public Law 98-573) amended section 641 of the Tariff Act of 1930 (19 U.S.C. 1641) to provide that no person may conduct Customs business (other than solely on behalf of that person) unless that person holds a valid Customs broker's license issued by the Secretary of the Treasury.

The questions you posed have been previously addressed by this office. In Headquarters Ruling (HQ) 729570, dated May 29, 1986, it was held that the preparation and execution of a Customs Form 7512 transportation in bond documents, without more, does not constitute the conduct of "Customs business" within the meaning of 19 U.S.C. 1641 so as to require a customhouse broker's license. The rationale for said holding addresses your second question, i.e. does the bonded carrier have the right to "make entry". HQ 729570 concluded that "[t]he word 'entry' is a term of art in tariff law. It is generally the filing with Customs of the documentation which is necessary to enable this agency to determine whether the merchandise may be released from government custody, to properly assess duties on the merchandise, gather correct and accurate statistics with respect to it, and determine whether any other applicable requirement of law is met. . . . 19 U.S.C. 1552 and 1553 speak of entries for immediate transportation and entries for transportation and exportation. A close reading of those provisions discloses that the 'entry' referred to is not the 'entry' of 19 U.S.C. 1484, but an entry without appraisement, that is, a mere transportation movement. . . ."

The issue was revisited in Headquarters Ruling (HQ) 729937, dated May 6, 1987, wherein we were asked to revoke HQ 729570 because it erroneously permitted an unlicensed party to transact Customs business. Customs declined to revoke said ruling determining that a careful reading of the definition of "Customs business" in 19 U.S.C. 1641 leads ". . .us to conclude that 'admissibility' should not be severed from the expression 'entry and admissibility' when considering this question. Accordingly, we interpret the admissibility issues which are addressed when the entry for consumption or withdrawal from warehouse is made as the ones referred to in the definition, not those which may be considered when the CF 7512 is presented."

HOLDING:

Based on the above-cited rulings, the filing of in-bond entries by a bonded carrier, without more, does not constitute the conduct of "Customs business" within the scope of 19 U.S.C. 1641 so as to require a customhouse broker's license.

Additionally, as discussed above, the bonded carrier can prepare and file in-bond entry documentation because this not "making entry" within the purview of 19 U.S.C. 1484.

The Office of Regulations and Rulings will take steps to make this decision available to Customs personnel via the Customs Rulings Module in ACS and to the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels within 60 days from the date of this decision.

Sincerely,

John Durant, Director

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