HQ 115011 - Instruments of International Traffic; Canadian truck; 19 U.S.C. § 1322 - United States International Trade Commision Rulings

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HQ 115011

June 12, 2000

BOR-4-04-RR:IT:EC 115011 GEV

CATEGORY: CARRIER

Connie Iverson
Paralegal Specialist
U.S. Customs Service
Federal Building
P.O. Box 610
Pembina, North Dakota 58271

RE: Instruments of International Traffic; Canadian truck; 19 U.S.C. § 1322

Dear Ms. Iverson:

This is in response to your memorandum dated May 24, 2000, requesting a ruling with respect to the entry of a Canadian-owned truck tractor. Our ruling on this matter is set forth below.

FACTS:

On March 12, 2000, at the Port of Pembina, North Dakota, a Customs Inspector conducted an examination of a 1990 Kenworth Semi-Tractor. The examination revealed that the tractor is owned by a Canadian company, McIntyre Machinery, Ltd. (“McIntryre”), and was being driven by a Canadian citizen but contracted to Schneider National Carriers, Inc. (“Schneider”), whose principal base of operations is in Green Bay, Wisconsin. The side door of the tractor states, “Schneider Carriers” and it is licensed in Illinois. After being questioned by the Customs Inspector, the driver contacted the owner (McIntyre) who said they did not need to make entry because of their Canadian citizenship and the fact that the truck was licensed in the United States.

You forwarded a letter to McIntyre on March 29, 2000, requesting they furnish you proof that the tractor had been properly entered into the commerce of the United States. On April 10, 2000, you received a phone call from Deb Hoffman of Schneider stating that the tractor need not be entered as it fell under the “MEMORANDUM OF UNDERSTANDING”, specifically the “RECIPROCITY” provision therein. Ms. Hoffman forwarded you a copy of this document which you in turn attached to your memorandum.

ISSUE:

Whether the subject truck tractor is exempted from Customs entry requirements pursuant to the above-referenced “MEMORANDUM OF UNDERSTANDING”?

LAW AND ANALYSIS:

Section 141.4, Customs Regulations (19 CFR § 141.4), provides that entry as required by title 19, United States Code, § 1484(a) (19 U.S.C. § 1484(a)), shall be made of every importation whether free or dutiable and regardless of value, except for articles specifically exempted by law or regulation from the requirements for entry. Section 141.4(b)(3), exempts from entry instruments of international traffic as described in 19 CFR § 10.41a and Chapter 98, Subchapter III, U.S. Note 4, HTSUS, the latter of which specifically lists truck cabs (i.e., truck tractors) and trailers.

Vehicles and other instruments of international traffic may enter the United States without formal Customs entry and payment of duty under the provisions of title 19, United States Code, § 1322 (19 U.S.C. § 1322). To qualify as instruments of international traffic, trucks having their principal base of operations in a foreign country must be arriving in the United States with merchandise destined for points in the United states, or arriving empty or loaded for the purpose of taking merchandise out of the United States (see 19 CFR § 123.14(a)). It is Customs position that a foreign truck tractor which arrives in the United States in international traffic towing a foreign trailer, either empty or loaded, constitutes a foreign “truck” as that term is used in §§123.14(a), (b), and (c)(1) (19 CFR §§123.14(a), (b), and (c)(1)). It should be noted, however, that in regard to truck tractors, whether they stay connected to their respective trailers or separate, the same restrictions set forth in the aforementioned regulatory authority would nonetheless apply. (See Customs ruling letter 111548, dated September 3, 1991)

Furthermore, certain foreign-based vehicles engaged, in whole or in part, in the domestic carriage of merchandise that either originates from a location outside the United States or will be subsequently moved to a destination outside the United States, or such vehicles moving without a payload between two points in the same country, shall be considered as engaged in international traffic. (See Customs Bulletin of October 1, 1997, Vol. 31, No. 40, at pp. 7-13.)

Section 10.41(d), Customs Regulations (19 CFR § 10.41(d)), provides, in part, that any foreign-owned vehicle brought into the United States as an element of a commercial transaction, except as provided in §123.14(c) (pertaining to the use of foreign-based vehicles in local traffic in the United States), is subject to treatment as an importation of merchandise from a foreign country and a regular entry therefor shall be made.

Pursuant to §123.14(c)(1), Customs Regulations (19 CFR § 123.14(c)(1)), as amended by T.D. 99-10, a Canadian-based vehicle “may carry merchandisebetween points in the United States if such carriage is incidental to the immediately prior or subsequent engagement of that vehicle in international traffic.” This regulatory provision further provides that, “[a]ny such carriage by the vehicle in the general direction of an export move or as part of the return of the vehicle to its base country shall be considered incidental to its engagement in international traffic.”

At the outset, we note that upon reviewing the “MEMORANDUM OF UNDERSTANDING” upon which Schneider relies for the subject truck tractor’s exemption from entry, its text reveals that it is an agreement solely between the State of Illinois and the Province of Ontario, Canada, to encourage the “free flow of commerce between Illinois and Ontario by vehicles” This agreement is “pursuant to and in conformity with the laws of Illinois and Ontario,” The “RECIPROCITY” provision of the agreement to which Schneider cites (Article I, paragraph 10) merely provides, in pertinent part, that a vehicle properly registered in either jurisdiction (i.e., Illinois or Ontario) is exempt from the other jurisdiction’s “full registration and related plating requirements” Furthermore, pursuant to Article II, paragraph 1 of the agreement, this reciprocity is only granted for “interjurisdiction” operations (i.e., between Illinois and Ontario), not “intrajurisdiction” (i.e., within Illinois or Ontario) operations.

Accordingly, the “MEMORANDUM OF UNDERSTANDING” by its own terms applies merely to registration reciprocity for commercial vehicles engaging in Illinois-Ontario operations and cannot be interpreted to override the above-cited entry and land cabotage laws administered by the U.S. Customs Service.

Parenthetically, we note that notwithstanding the inapplicability of the above-referenced “MEMORANDUM OF UNDERSTANDING”, the tractor in question may nonetheless be exempt from Customs entry requirements if it has always been used/will remain in international traffic.

HOLDING:

The subject truck tractor is not exempted from Customs entry requirements pursuant to the above-referenced “MEMORANDUM OF UNDERSTANDING”.

Sincerely,

Acting Chief

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