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HQ 114235





January 4, 1999

QUO-1-RR:IT:EC 114235 GG

CATEGORY: ENTRY

Thomas M. Keating, Esq.
Bowles, Keating, Hering, Matuszewich & Fiordalisi 135 South LaSalle Street
Suite 1140
Chicago, IL 60603

RE: Split Shipments; Quota Merchandise; Use of One Visa for Shipments Entered at Different Time; TBT-98-089; Shipment by Air.

Dear Mr. Keating:

This is in response to your ruling request, dated January 15, 1998, written on behalf of your client, Chinin U.S.A. Inc.

FACTS:

Chinin is an importer of men's apparel. It purchases the merchandise from a manufacturing plant located in the city of Male in the Maldives. Male does not have an international airport, therefore all shipments destined for the U.S. are shipped from Male to a freight forwarder in Colombo, Sri Lanka, where they are delivered to an airline or steamship line for export. The terms of sale are FOB Colombo.

Orders are tendered by the manufacturer as a single shipment to the freight forwarder. However, in some instances the shipment may be split between different flights on either the same or on different airlines. The reasons for the split are varied; outlined below are three of the most common:

1) The freight forwarder tenders a shipment to the airline at the FOB point as a single shipment. The airline decides it does not have room on one plane and splits the shipment between two of its own flights;

2) The forwarder tenders a shipment to the airline at the FOB point as a single shipment. The airline accepts the shipment, but after acceptance it determines that it cannot handle the entire shipment and returns part of it because of space limitations. The airline tells the forwarder to find a different airline for the returned portion. The forwarder sends the balance on a different airline or on the next available flight;

3) The forwarder attempts to book a single shipment with a single airline prior to shipment. Space limitations force the airline to agree to accept only a part of the original shipment. The forwarder then books the balance of the shipment on the next available flight to the U.S. with a different airline. The original single shipment arrives as two separate shipments with two different airlines.

In all of these situations, the exporter has tendered the merchandise as a single shipment with a single visa to a freight forwarder, with the expectation that the entire shipment will be sent from Colombo as one shipment on one flight. However, because of the various limitations of the carrier, the shipment is split. This is done strictly for the convenience of the airline.

ISSUE:

Whether shipments split at the initiative of the carrier may be entered separately under one visa.

LAW AND ANALYSIS:

In Bulletin TBT-98-089, dated December 11, 1998, the Director of Trade Compliance at Customs Headquarters sets forth the longstanding "one visa, one shipment rule", whereby each shipment of merchandise from a country having a bilateral textile visa arrangement with the United States must be entered using an original visa covering goods in that shipment only. The Bulletin explains that if the shipment is split or divided in the exporting country while under the control of the exporter or importer, then a separate visa is required for each portion of the shipment.

TBT-98-089 proceeds, however, to carve out two exceptions to the one visa per shipment rule. These are:

1) The merchandise is accepted by the carrier under one airway bill or bill of lading, and the shipment is split by the carrier after it leaves the control of the exporter and arrives in the U.S. port on different vessels.

2) The shipment leaves the exporting country as one shipment, but is off-loaded in a second country, and is laden in the second country on two or more vessels by the carrier for continuation to the United States.

In both of these exceptions, the shipment is split by the carrier after the carrier has been given control of the shipment. Neither the exporter nor the importer intended to send the merchandise covered by one visa on two or more vessels. In these circumstances, the same visa may be used to enter each of the separate arrivals into the United States. TBT-98-089 supersedes any local bulletins issued by Customs field offices on this issue, to the extent that any conflict may exist.

Applying this rule and its exceptions to Chinin's situation, it is clear that the first described scenario clearly falls within the two exceptions. This example concerns merchandise which, after being tendered to the airline by the freight forwarder, is then split on the initiative of the airline and sent on different flights to its destination. Provided the shipment is accepted by the carrier under one bill of lading, one visa can be used to enter each of the separate increments as they arrive in the United States. It is immaterial whether the split takes place in the country of exportation or in a second country where the merchandise is off-loaded by the carrier before continuation on two or more flights to the United States.

In the second and third scenarios, the exporter places the merchandise in the care of a freight forwarder, who in turn makes shipping arrangements with the airlines. In both cases, one carrier alone is unable to accept the entire shipment, thus requiring the freight forwarder to make arrangements for the splitting of the shipment between different airlines. In our view, this situation would still merit the use of one visa for the split shipments, because absent evidence to the contrary, the division of the shipment occurs after it leaves the exporter's control. The intent of the exporter -- to send merchandise covered by one visa on one vessel -- is not negated by the ensuing transportation arrangements made by the freight forwarder.

HOLDING:

One visa may be used to enter several separate shipments, when the original shipment was tendered by the exporter to the freight forwarder as one shipment covered by one visa, but was then split at the initiative of the carrier and transported on several different flights to its destination.

Sincerely,

Jerry Laderberg
Chief

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