HQ 223772 - Consignee; Right to Make Entry; Importer of Record; Customhouse Broker; Power of Attorney; Master Air Waybill; Consolidated Entry; Consolidated Entry Summary; Merchandise Processing Fees; Transfer of Liability for Increased or Additional Duties. - United States International Trade Commision Rulings

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HQ 223772

August 6, 1992

ENT-1-03-CO:R:C:E 223772 SLR

CATEGORY: ENTRY LIQUIDATION

Mr. Donald W. Babcock
Associated Customhouse Brokers, Inc.
1099 Jay Street, Building C-5
Rochester, NY 14611

RE: Consignee; Right to Make Entry; Importer of Record; Customhouse Broker; Power of Attorney; Master Air Waybill; Consolidated Entry; Consolidated Entry Summary; Merchandise Processing Fees; Transfer of Liability for Increased or Additional Duties.

Dear Mr. Babcock:

This is in response to your February 27, 1992 binding ruling request, made on behalf of your client, Clinton Lloyd d/b/a Irish Import Shop ("Irish Imports"), regarding a consignee's right to make entry as well as various other entry related issues.

FACTS:

In your letter, you indicate that the relevant facts surrounding the import shipments for Irish Imports are that:

1) They are shipped on 1 master air waybill.

2) The air waybill is consigned directly to Irish Imports.

3) The merchandise shipped via the 1 air waybill originates from various Irish exporters.

4) The merchandise is covered by commercial invoices indicating sale to various U.S. companies (Irish Imports, themselves, and others).

5) In all cases, the goods are released to Irish Imports to be held in their possession until disposition instructions are received from the Irish exporters.

6) In all cases, Irish Imports invoices the purchaser for U.S. Customs duties, service fees, and domestic transportation charges.

7) In some cases, Irish Imports actually pays the commercial invoice amount to the Irish exporter (even though the invoice may show a different U.S. company). When this is the case, the Irish exporter considers the international transaction complete and Irish Imports has the sole responsibility to collect the payment for the value of the imported merchandise (plus the additional fees and charges mentioned above).

8) All consignments shipped to Irish Imports include goods for which they are the actual purchaser.

9) The Irish exporters and U.S. companies destined to receive the goods look to Irish Imports to arrange for Customs clearance prior to distribution.

In a telephone conversation with Customs Headquarters, you indicated that Associated Customhouse Brokers is the brokerage house appointed by Irish Imports to enter the merchandise on its behalf, and that Associated Customhouse routinely designates Irish Imports as the importer of record. Customs Buffalo has challenged this designation.

You write to ask whether Irish Imports qualifies as the importer of record for all of the merchandise imported on each master air waybill consigned to them. If our answer is "no," you ask that we confirm that Associated Customhouse Brokers could appear as the importer of record; that subsequent to entry, Associated Customhouse could substitute a bond in the name of Irish Imports; that no power of attorney would be required to submit the entry; and that one entry number, one CF 3461, one CF 7501, and one merchandise processing fee (MPF) calculation would satisfy applicable U.S. Customs requirements.

ISSUES:

Whether Irish Imports has a sufficient "financial interest" in the imported merchandise to permit Irish Imports the "right to make entry" of all merchandise; and, if not, whether Associated Customhouse Brokers can appear as the importer of record.

Whether a power of attorney is required for Associated Customhouse Brokers to transact Customs business on behalf of Irish Imports.

Whether shipments listed on one master air waybill can be entered using one entry number, one CF 3461, one CF 7501, and one merchandise processing fee calculation.

Whether subsequent to entry, Associated Customhouse Brokers can transfer liability for increased or additional duties by substituting a superseding bond in the name of Irish Imports.

LAW AND ANALYSIS:

Under section 484, Tariff Act of 1930, as amended (19 U.S.C. 1484), only an "importer of record" has the right to make entry. "Importer of record" is defined as the owner or purchaser of the goods, or when designated by the owner or purchaser, or consignee, a licensed customhouse broker. A nominal consignee may designate a customhouse broker to make entry on its behalf, but may not itself make entry. If a customhouse broker makes entry for a nominal consignee, the broker must appear as importer of record.

Customs Directive No. 3530-02, dated November 6, 1984, clarifies and explains the right to make entry. In this Directive, "owner" or "purchaser" is defined as any party with a financial interest in a transaction including, but not limited to, the actual owner of the goods, the actual purchaser of the goods, a buying or selling agent, a person or firm who imports on consignment, a person or firm who imports under loan or lease, a person or firm who imports for exhibition at a trade fair, a person or firm who imports goods for repair or alteration or further fabrication, etc. The terms "owner" or "purchaser" would not include a "nominal consignee," who effectively, possesses no other right, title, or interest in the goods except as he possessed under a bill of lading, air waybill, or other shipping document. Examples of nominal consignees are courier services, freight consolidators and customhouse brokers who are not licensed to transact Customs business in Customs districts where a shipment is being entered.

Here, Irish Imports has a financial interest in the goods for which it is the actual purchaser and in those goods invoiced to other U.S. companies for which it has paid and is the actual owner. However, for the remainder of the goods, it acts as a mere freight forwarder. As a nominal consignee, therefore, Irish Imports cannot appear as the importer of record of all the merchandise listed on each master air waybill. Irish Imports may appoint Associated Customhouse Brokers to enter the merchandise on its behalf, and on the behalf of others, but Associated Customhouse Brokers must appear as the importer of record on all entry documents.

Before transacting Customs business in the name of its principal, a customhouse broker must obtain a valid power of attorney. 19 CFR 141.46. No power of attorney is required here, however, as Associated Customhouse Brokers will make entry in its own name as the importer of record.

Section 141.51 of the Customs Regulations (19 CFR 141.51) indicates that all merchandise arriving on one vessel and consigned to one consignee shall be included in one entry. Furthermore, the holding in National Customs Brokers and Forwarders Association of America v. United States, CIT Slip Op. 90-17, reprinted at 24 Cust. Bul. No. 12, pg. 37 (Feb. 23, 1990) allows one entry per vessel if there is a "master" bill of lading which consigned the merchandise to a single consignee, notwithstanding the fact that the individual bills of lading consigned the same merchandise to different "ultimate" consignees. Pursuant to the regulations and case law, therefore, Associated Customhouse Brokers need file only one CF 3461 per master air waybill. Only one CF 7501 is needed as well. 19 CFR 142.17a.

As to merchandise processing fees, generally speaking, MPFs apply per entry or release of merchandise. 19 U.S.C. 58c et seq. As the instant case calls for the filing of a single entry, only one merchandise processing fee calculation based on the total value of all goods covered by the master air waybill applies.

Under 19 CFR 141.20(a)(2), an importer of record may transfer liability for increased or additional duties due upon liquidation if, at entry, it declares its intention to transfer liability to the actual owner and provides the owner's bond. Here, Irish Imports owns only a portion of each shipment and acts a freight forwarder as to the remainder of the goods. Consequently, Associated Customhouse Brokers cannot transfer liability for increased or additional duties by substituting a superseding bond in the name of Irish Imports. Associated Customhouse Brokers could eliminate the liability issue altogether by filing separate entries on behalf of each consignee, but this would appear to conflict with Associated Customhouse Brokers' earlier concerns.

HOLDING:

Irish Imports has a financial interest in the goods for which is the actual owner or purchaser. However, for the remainder of the merchandise, Irish Imports is a mere nominal consignee; consequently, Irish Imports cannot be the importer of record for that merchandise for which it neither owns nor purchases.

Irish Imports may appoint Associated Customhouse Brokers to enter the merchandise on its behalf and on the behalf of others, but Associated Customhouse Brokers must be listed as the importer of record on all entry documents.

A power of attorney is not required for Associated Customhouse Brokers to transact Customs business on behalf of Irish Imports if Associated Customhouse Brokers is the
importer of record.

Associated Customhouse Brokers need file only one CF 3461 and one CF 7501 per master air waybill, and only one merchandise processing fee calculation applies if all of the merchandise is entered and released as one entry.

Associated Customhouse Brokers cannot transfer liability for increased or additional duties by substituting a superseding bond in the name of Irish Imports if a single entry is filed.

Sincerely,

John Durant, Director
Commercial Rulings Division

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