HQ 114420 - Express Consignment Shipments; Entry Consolidation; 19 CFR Part 128; 19 CFR ?141.51 and ?141.52. - United States International Trade Commision Rulings

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HQ 114420

August 26, 1998

ENT-1-RR:IT:EC 114420 GG

CATEGORY: ENTRY

Mr. Norman T. Schenk
Customs & Brokerage Manager, United States, UPS Customhouse Brokerage, Inc.
1930 Bishop Lane
Suite 200
Louisville, KY 40218

RE: Express Consignment Shipments; Entry Consolidation; 19 CFR Part 128; 19 CFR ?141.51 and ?141.52.

Dear Mr. Schenk:

This is in response to your letter, dated March 9, 1998, requesting a ruling on the issue of entry consolidation.

FACTS:

UPS, an express carrier, alleges that it has received different interpretations from different Customs ports on the correct way to enter merchandise imported on a single conveyance. The situation arises when many different packages arrive on one form of conveyance (truck, airplane, etc.) on the same day. According to UPS, in the case of air shipments UPS is listed as both the shipper and the consignee on the master airway bill. Each individual shipment has a house airway bill which lists UPS as the shipper and the customer as the consignee. UPS, as the nominal consignee, ordinarily appoints itself in its capacity as a licensed broker as the party to make entry. Land shipments differ in that the invoice will specify the actual sender of the merchandise as the shipper. In ground transactions, the custom is for the actual sender to appoint the broker, unless they delegate that responsibility to UPS on the shipping documents. UPS reports that some ports require consolidation of shipments onto one entry (CF 3461/3461 ALT) when the packages are sent by one shipper to one consignee. Other ports, however, want UPS to consolidate entries even when those entries are sent by different shippers.

UPS asks for clarification of the correct procedures to be used in two specific situations. These are:

1) Separate Shippers - Same Ultimate Consignee: In this instance, several shipments arrive on the same conveyance. They are sent by different shippers, come from different countries of export, are comprised of different commodities, and have no commonality other than the same ultimate consignee.

2) Same Shipper - Same Buyer - Different Ultimate Consignee: This kind of arrangement occurs when, for example, a mail order company based in Canada sells five separate items to five different individuals in the United States through five different U.S. branches of the mail order company. The shipments arrive in the United States on the same conveyance.

UPS makes reference to Section 141.51 (19 CFR ?141.51 of the Customs Regulations) and asks for our interpretation of its applicability.

ISSUE:

Whether express consignment shipments of merchandise arriving on the same conveyance and either sent by different shippers to the same ultimate consignee or sent by the same shipper to different ultimate consignees, are required to be consolidated onto one entry.

LAW AND ANALYSIS:

The statutory authority for the entry of merchandise is found in Title 19, United States Code. The sections most applicable to this inquiry are ?321 (administrative exemptions); These provisions empower the Treasury Department to promulgate regulations governing the entry of merchandise.

Part 128 of the Customs Regulations (19 CFR Part 128) addresses importations made by express consignment operators. An express consignment operator is an entity operating in any mode or intermodally moving cargo by special express commercial service under closely integrated administrative control. Its services are offered to the public under advertised, reliable timely delivery on a door-to-door basis. (19 CFR ?128.1(a).) UPS qualifies under this definition as an express consignment operator, and is therefore subject to the provisions of Part 128.

Shipments carried by express consignment operators must be entered, unless exempt from entry. Formal entry is required for all shipments over $2000. (19 CFR ?128.25.) Informal entry procedures may be used for shipments not exceeding $2000 in value, provided the merchandise is not restricted or prohibited, subject to quota, or otherwise precluded by Section 498, Tariff Act of 1930, as amended. An express consignment operator may consolidate individual shipments valued at $2000 or less onto one informal entry, even though the total amount on the entry may exceed $2000. (19 CFR ?128.24(a).) In addition, other special informal entry procedures have been implemented to accommodate the high volume of importations made by express consignment operators.

Pursuant to 19 CFR ?128.24(b), express consignment operators may submit an annual blanket entry/immediate delivery (CF 3461), appropriately modified, to cover informal entries of merchandise. (See Treasury Decisions ("T.D.") 86-143, 94-51, and 95-31 for a discussion of this issue.) The party making entry (i.e., the express consignment operator, in its capacity as consignee for shipments of $200 or less, or as broker for those over $200 but under $2000), then submits a copy of the invoice or advance manifest as a control document with each shipment. Customs may also require the party making entry to submit individual CF 3461's on a daily or by flight basis, with commercial invoices or advance manifests attached, in lieu of the annual blanket CF 3461. An entry summary (CF 7501) must then be presented, with estimated duties attached, within 10 working days of release.

Shipments valued at $200 or less meeting the requirements of 19 CFR ?10.151 may be entered free of duty and tax by presentation of the manifest as the entry document, without the furnishing of Harmonized Tariff Schedule numbers or the follow-up filing of a CF 7501. Qualifying shipments must be segregated on the manifest from those over $200. (19 CFR ??128.24(e) and 128.25.)

This ruling details the entry procedures used by express consignment operators to highlight the fact that the procedures were set up to accommodate and to encourage consolidated entries. This was done to enable both the express consignment operators and Customs to deal effectively with a high-volume shipment environment. As noted previously, Section 128.24(a) allows the grouping of individual shipments valued at $2000 or less onto one informal entry. Furthermore, Section 128.24(b) states that the blanket CF 3461 should be "appropriately modified to cover all importations under the special procedures contained in this part". The alternative daily or per flight informal entry procedure, described in Section 128.24(c), requires that "a notation shall be placed on the Customs Form 3461 [indicating] that the entry covers multiple shipments". Finally, shipments under $200 are grouped together on one entry document, the advance manifest. However, formal entries of merchandise (i.e., those over $2000 in value) are made on separate CF 3461's.

Notwithstanding Part 128 of the Customs Regulations, which clearly encourages entry consolidation, UPS wants to know if they are required to consolidate all shipments onto one entry, even in situations where the shippers or the ultimate consignees are different. UPS indicates that the question usually arises when one customer indicates a preference for its merchandise to be entered separately.

Section 141.51 of the Customs Regulations (19 CFR ?141.51) provides that "[a]ll merchandise arriving on one vessel or vehicle and consigned to one consignee shall be included in one entry, except as provided in ?141.52." Under this general rule, all UPS shipments arriving on the same vessel or vehicle would have to be put on one entry, because UPS is the nominal consignee of the merchandise. However, Section 141.52 of the Customs Regulations (19 CFR ?141.52) grants port directors discretion to allow the filing of separate entries for different portions of all merchandise arriving on one vessel or vehicle and consigned to one consignee, provided they are satisfied that there will be no prejudice to import admissibility enforcement efforts, the revenue, and the efficient conduct of Customs business. Section 141.52 lists the circumstances under which separate entries would be appropriate. Two of these circumstances address the two situations raised by UPS, namely, separate shippers/same ultimate consignee, and same shipper/same buyer, different ultimate consignees. Section 141.52(a) allows separate entries where each portion of a consolidated shipment is addressed to one consignee for various ultimate consignees; and Section 141.52(e) makes provision for separate entries where the several portions of the consignment for which separate entries are tendered are covered by separate bills of lading. The first listed exception to the one entry rule would enable UPS to file separate entries for goods arriving on one conveyance which have been sold by the same shipper to one buyer for various ultimate consignees. The second exception would allow the filing of separate entries for merchandise sent by different shippers on the same conveyance to the same ultimate consignee. As noted above, however, the right to file separate entries for each portion of a shipment is contingent upon port director approval. This means that a port director could, for reasons of workplace efficiency, require the filing of a consolidated entry and deny a request that separate entries be filed.

HOLDING:

Shipments of merchandise arriving on the same conveyance and consigned to one nominal consignee may be entered on separate entries, provided consent is first obtained from the Port Director.

Sincerely,

Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch

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