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HQ 115355

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May 2, 2001

BOR-4-04-RR:IT:EC 115355 GEV

CATEGORY: CARRIER

Tony Hibberd
Safety Coordinator
Sunbelt Transport Inc.
415 Horner Ave., Unit 1
Toronto, ON, Canada M8W 4W3

RE: Instruments of International Traffic; Canadian-based Truck; 19 U.S.C. § 1322

Dear Mr. Hibberd:

This is in response to your letter dated April 19, 2001, regarding a proposed transportation of merchandise by your company. Our ruling on this matter is set forth below.

FACTS:

Sunbelt Transport Inc., a Canadian-based carrier, has been asked to be involved in a movement of apples from the State of Washington to Nogales, Arizona for export to Mexico. During the transportation the truck trailers holding the apples will be sealed and bonded for export and transported through a free trade zone.

ISSUE:

Whether the use of Canadian-based trucks as described in the above scenario is violative of 19 CFR § 123.14(c).

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 intangibles and articles
specifically exempted by law or regulations from the requirements for entry. Since the foreign-based equipment in question is not within the definition of intangibles as shown in General Note 4, Harmonized Tariff Schedule of the United States (HTSUS; 19 U.S.C. § 1202, as amended), they are subject to entry and payment of any applicable duty if not specifically exempted by law and regulations.

Instruments of international traffic may be entered without entry and payment of duty under the provisions of 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)). 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.)

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), Customs Regulations (19 CFR §§ 123.14(a), (b), and (c)(1)).

Section 123.14(c), Customs Regulations, states that with one exception, a foreign-based truck, admitted as an instrument of international traffic under § 123.14, shall not engage in local traffic in the United States. The exception, set out in § 123.14(c)(1), states that such a 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.”

Section 123.14(c)(2), Customs Regulations (19 CFR § 123.14(c)(2)), provides that a foreign-based truck trailer admitted as an instrument of international traffic may carry merchandise between points in the United States on the return trip as provided by § 123.12(a)(2) which allows use for such transportation as is directly incidental to its economical and prompt departure for a foreign country. Section 123.14(c)(2) applies only to trailers and not to tractor-trailer units which, as was stated earlier, are considered trucks as that term is used in the Customs Regulations.

Section 10.41(d), Customs Regulations provides, in part, that any foreign-owned vehicle brought into the United States for the purpose of carrying merchandise between points in the United States for hire or as an element of a commercial transaction, except as provided for in § 123.14(c), is subject to treatment as an importation of merchandise from a foreign country and a regular Customs entry therefore shall be made. Section 123.14(d), Customs Regulations provides that any vehicle used in violation of § 123.14, is subject to forfeiture under § 592, Tariff Act of 1930, as amended (19 U.S.C.

With respect to your inquiry, upon reviewing the scenario you pose, we note that your company’s vehicle(s) would be engaged, in part, in the carriage of merchandise originating in one country (USA) and terminating in another (Mexico). As such, the vehicle(s) would be considered to be engaged in international traffic. (See Customs Bulletin of October 1, 1997, Vol. 31, No. 40, at p. 9). Furthermore, the proposed use of the subject vehicle(s) in the United States does not constitute "local traffic" within the meaning of § 123.14(c) since none of them would be involved in the transportation of merchandise between any two points in the United States when such merchandise will not be subsequently moved to a destination (i.e., point of delivery) outside the United States. Id. at p. 11.

Accordingly, the use of Sunbelt Transport Inc.’s vehicle(s) as proposed would not be prohibited by Customs administration of 19 CFR § 123.14(c).

HOLDING:

The use of a Canadian-based truck as described in the above scenario is not violative of 19 CFR § 123.14(c).

Sincerely,

Larry L. Burton

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