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HQ 114319





June 23, 1998

ENT-3-03-RR:IT:EC 114319 GG

CATEGORY: ENTRY

Mr. Frank M. Murphy
National Technical Advisor
Norman G. Jensen, Inc.
P.O. Box 8008
Port Huron, MI 48061-8008

RE: Softwood Lumber from Canada; One Entry Summary for Multiple Releases; 19 CFR ?142.17

Dear Mr. Murphy:

This is in response to your request, dated April 1, 1998, for a ruling on the use of the consolidated entry procedure for shipments of softwood lumber from Canada. Our decision follows.

FACTS:

For several years your company has consolidated immediate delivery releases of shipments of softwood lumber onto one entry summary. Qualifying shipments are sent by one shipper on one mode of transportation - truck or rail - to a single importer. In collecting releases for the same Canadian shipper consideration is given to shipments from the same Canadian province and the same Canadian quota holder. The usual consolidated entry will cover releases for a three-day period. This is dictated by Jensen company practice requiring submission of the permit application within 48 hours of release. Once the releases for a consolidated entry have been collected, the consolidated entry number is assigned and a permit application is submitted electronically for a single permit number based on the consolidated entry number. Upon receipt of the permit from the Canadian government the entry summary is prepared and submitted. The entry summary is usually submitted from 9 to 12 working days following the date of the earliest release.

On December 30, 1997, the Director of Trade Agreements of the U.S. Customs Service issued a memorandum on the subject of softwood lumber permit numbers. It stated that softwood lumber permit numbers are unique and may only be used for one entry number. It further added that while there can be multiple permit numbers for one entry, there cannot be multiple entries for one permit number. The Port of Port Huron, Michigan, has interpreted this statement to preclude the use of the consolidated entry procedure for immediate delivery releases of softwood lumber shipments subsequently consolidated on one entry summary covered by a single softwood lumber permit. All other ports permit such consolidation.

ISSUE:

Whether multiple releases of Canadian softwood lumber may be consolidated on one entry summary under one export permit.

LAW AND ANALYSIS:

On May 29, 1996, the United States entered into the Softwood Lumber Agreement (the Agreement) with Canada. The Agreement, which went into effect on April 1, 1996, required the Canadian government to impose fees on certain lumber products that are exported from Canada to the United States. To control these exports, the Agreement provides that Canada will issue an export permit for each exportation of affected softwood lumber to the United States and will collect the required fee for amounts of lumber exported in excess of a certain threshold.

Title 19, United States Code, Section 1484 (19 U.S.C. regulations as the Secretary of the Treasury shall promulgate. To secure the release of merchandise after arrival in the Customs territory, an importer is required to file an entry within five working days after the entry of the importing vessel or aircraft or report of the vehicle, or after the arrival at the port of destination in the case of merchandise transported in bond. 19 CFR ?141.5, ?142.2(a). Alternatively, merchandise may be released under the special permit for immediate delivery procedures outlined in 19 U.S.C. ?1448(b) and Subpart C of Part 142 of the Customs Regulations. The form filed with U.S. Customs to effectuate entry or immediate delivery is a CF 3461, CF 3461-ALT, or in the case of a "live" entry, a CF 7501. Each entry or special permit has an entry number that is unique to that transaction. 19 CFR ?142.3a.

An importer must file an entry summary, with estimated duties attached, within 10 working days after the time of entry or release. (An exception to this general rule exists in instances where entry summary documentation is filed at the time of entry.) Usually, one entry summary corresponds to one single entry or immediate delivery. However, Section 142.17 of the Customs Regulations (19 CFR ?142.17) allows the filing of one entry summary for merchandise the subject of separate entries if:

1) The merchandise has the same country of exportation, and the same country of origin,
2) The merchandise arrives by land, by the same vessel or by the same air carrier,
3) The merchandise is consigned to the same consignee, 4) The time between the date of the first entry and the date of the last entry does not exceed one week,
5) The entry summary document is filed within 10 working days from the date of the first entry, and
6) Each entry is identified separately by entry number on the entry summary.

Certain merchandise is ineligible for consolidation onto one entry summary. For example, quota-class merchandise and prohibited merchandise may not come in under this procedure. 19 CFR ?142.17(b). However, there is no such restriction on the grouping together of entries or releases of softwood lumber in this manner, provided that all other entry requirements are met. Among those requirements is that one or more permit numbers be attributed to each entry or release.

As noted previously, the Agreement calls for "a federal export permit for each exportation to the United States". (Article II, Paragraph 1.) Thus, a permit would have to be issued for each shipment of qualifying lumber products. While some shipments may require only one permit, it is conceivable that those containing products from different mills and provinces would be imported under cover of separate permits. Merchandise arriving on one vessel or vehicle and consigned to one consignee may be included in one entry or release (19 CFR ?141.51); accordingly, as the December 30, 1997, memorandum points out, there can be multiple permit numbers for one entry. The ensuing statement - the one creating controversy - is equally accurate in that "there cannot be multiple entries for one permit number." This is because each exportation, and hence, each entry or release of affected merchandise, requires a separate permit.

We have established that each shipment of softwood lumber from provinces covered by the Agreement must obtain at least one Canadian export permit. Separate entries or releases of lumber consigned to the same consignee and otherwise meeting the requirements set down in 19 CFR ?142.17 may be consolidated onto one entry summary. However, the requirement of an export permit per shipment is not waived by using this procedure. Just as the separate entry or release numbers carry over to the entry summary under the consolidated entry summary procedures (19 CFR attributed to each of those entries or releases also appear on the CF 7501. An "umbrella" export permit based on the consolidated entry summary number cannot be used to cover all of the different shipments. The allowance of such a procedure would violate the terms of the Agreement. Consequently, we concur with the procedures currently in existence at Port Huron.

In reaching this conclusion, we emphasize that our decision should not create congestion or delay at the border. Shipments of softwood lumber products may still be released prior to issuance of a permit. Importers wishing to consolidate their entries or releases of lumber onto one entry summary should simply be aware that they must obtain separate permit numbers for each shipment of lumber being grouped onto the CF 7501. The failure to obtain the necessary permits will subject the importer to the assessment of liquidated damages. See, Customs Bond Cancellation Standards for Imports of Softwood Lumber from Canada, published as Treasury Decision 98-53, Vol. 63 Fed. Register 30039, June 2, 1998.

We wish to raise one final point on the consolidation of separate entries of softwood lumber products onto one entry summary. One of the requirements for using this procedure is that the entry summary document be filed within 10 working days from the date of the first entry. (19 CFR ?142.17(a)(5).) This presents a potential conflict with the special provision in 19 CFR ?12.140(c) granting softwood lumber importers an additional 10 working days to file entry summary documentation in instances where the granting of a permit had been delayed beyond the 10 day period. In our view, the 10 day period in ?142.17(a)(5) is extended by implication for an additional ten days for softwood lumber entries only.

HOLDING:

Entries and releases of softwood lumber from Canada may be consolidated onto one entry summary subject to the conditions of 19 CFR ?142.17. However, a separate permit number is required for each entry or release of lumber.

Sincerely,

Jerry Laderberg
Chief

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