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HQ 114408

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August 28, 1998

BON-1-03/COT-2-RR:IT:EC 114408 GEV

CATEGORY: BONDS

Kathy Hansen
Manager, Customs Compliance
LCHB
CNF Service Company
Post Office Box 4260
Portland, Oregon 97208-4260

RE: Air Carrier; International Carrier Bond; Custodial Bond; Container Station; 19 CFR §§ 113.63, 113.64

Dear Ms. Hansen:

This is in response to your letter dated June 17, 1998, enclosing your letter dated June 8, 1998, the latter of which requests a ruling regarding the applicability of container station bond requirements to Emery Worldwide (“Emery”). Our ruling on this is set forth below.

FACTS:

Emery is an integrated air carrier with over one hundred service centers across the United States. Emery operates a domestic hub service and also has several international flights that it operates with its own aircraft. Its normal daily operations include the assembly and recovery of consolidated (not containerized) shipments from other international air carriers. The freight may be held at the point of recovery for Customs clearance, or it may be sent under Emery’s bond (IT or T&E) to another city for clearance and delivery. On the export side, freight may travel on both Emery aircraft and that of another airline prior to arriving at its destination.

With respect to the above-described operations, Emery has always held and fulfilled all obligations of, a Type 2 Custodial Bond (19 CFR § 113.63), and a Type 3 International Carrier Bond (19 CFR § 113.64). However, Emery states that various Customs ports have sporadically requested that Emery obtain a container station bond in addition to its other bond coverage.

ISSUE:

Whether Emery’s current Custodial and International Carrier Bonds obtained pursuant to 19 CFR §§ 113.63 and 113.64, respectively, provide the requisite Customs bond coverage for its scope of operations.

LAW AND ANALYSIS:

With respect to Emery’s scope of operations, the international carriage of merchandise by Emery’s own aircraft renders applicable the International Carrier Bond conditions set forth in § 113.64, Customs Regulations (19 CFR § 113.64). Consequently, since Emery already holds an International Carrier Bond it has met its Customs bonding obligations for this aspect of its business.

In regard to the remainder of Emery’s services under consideration (i.e., assembly and recovery of consolidated (not containerized) shipments), as they pertain to those of a container station, we note that a container station is a secured area within the United States into which containers of merchandise may be moved for the purpose of opening the containers and delivering the contents before any entry is filed with Customs or duty is paid. A container station serves as a central location at a port for processing containerized merchandise which otherwise could not be handled timely at the dock, wharf, pier, or bonded carrier’s terminal. (T.D. 82-135) Sections 19.40 through 19.49 (19 CFR §§ 19.40-19.49), provide the procedures for the establishment and use of container stations.

Upon our review of this matter, it is readily apparent that the services provided by Emery do not constitute those of a container station as discussed above. Assuming, arguendo, such operations do in fact constitute those of a container station, we note that pursuant to § 19.40(a), Customs Regulations, such a facility “...may be established at any port or portion of a port, or any other area under the jurisdiction of a port director upon the filing of an application therefore and its approval by the port director and the posting of a bond on Customs Form 301, containing the bond conditions set forth in § 113.63 of this chapter in such amount as the port director shall require.” Since Emery already holds a Type 2 Custodial Bond containing the bond conditions set forth in § 113.63, Customs Regulations, it already meets the requisite bonding obligations for a container station.

Accordingly, no additional Customs bond coverage is needed for those operations provided by Emery as described above.

HOLDING:

Emery’s current Custodial and International Carrier Bonds obtained pursuant to 19 CFR §§ 113.63 and 113.64, respectively, provide the requisite Customs bond coverage for its scope of operations.

Sincerely,

Jerry Laderberg

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