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HQ 116004

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September 29, 2003

ENT-1-RR:IT:EC 116004 GG

CATEGORY: ENTRY

Mr. Rodney Ralston
Customs Consultant
UPS Supply Chain Solutions
One Trans-Border Drive
Champlain, NY 12919

RE: Ultimate Consignee; 19 CFR 143.2(a)(6); Consolidated Shipment; Time Title Transfers

Dear Mr. Ralston:

This is in response to your ruling request dated June 16, 2003, made on behalf of your client, Debit Supplies International (DSI).

FACTS:

DSI, a Canadian corporation, sells office supplies on the Internet or through television advertisements. It invoices its U.S.-based customers after the customer has accepted delivery, and the invoice is payable upon receipt. No billing occurs if the customer refuses delivery. DSI ships its products via UPS line haul, from Montreal to Champlain. Each package is pre-addressed and on average is valued around $150, and is included in a consolidated entry. The shipment is delivered to the UPS Supply Chain Solutions warehouse in Champlain for eventual delivery to the U.S.-based customers.

DSI maintains that up to the point of delivery, DSI is still the legal owner of the product. A sale transpires only when the customer accepts delivery. On account of its retaining ownership of the items when they cross the border, DSI wishes to use its own existing Internal Revenue Service (IRS) Employer Identification Number (EIN) as the ultimate consignee identifier on the entry. To bolster its argument that it should be so entitled, DSI characterizes the cross-border consolidated shipments as a mere transfer of DSI owned inventory from one site to another.

ISSUE:

Whether DSI, the Canadian seller of imported merchandise, may be represented as the ultimate consignee on the entry documentation.

LAW AND ANALYSIS:

The requirement to report ultimate consignee information at the time of entry or release is found in section 142.3 of the Customs Regulations (19 CFR § 142.3). Specifically, section 142.3(a)(6) provides:

Identification. When merchandise is imported having been sold, or consigned, to a person in the United States, the name, street address, and appropriate identification number of that person, as provided in § 24.5 of this chapter, shall be shown on the entry documents (CF 3461, 3461 ALT, 7501). When, at the time of immediate delivery, entry or release, there is no known buyer, the name, street address, and appropriate identification number (as above) of the premises in the United States to which the merchandise is to be delivered must be shown on the entry or release documents.

The Bureau of Customs and Border Protection (“CBP”) has issued a directive on ultimate consignee requirements at the time of entry or release. The directive, No. 3550-079A, dated June 27, 2001, at section 6.3 defines the ultimate consignee as follows:

The ultimate consignee at the time of entry or release is defined as the party in the United States to whom the overseas shipper sold the imported merchandise. If at the time of entry or release the imported merchandise has not been sold, then the ultimate consignee at the time of entry or release is defined as the party in the United States to whom the overseas shipper consigned the imported merchandise. If the merchandise has not been sold or consigned to a U.S. party at the time of entry or release, then the ultimate consignee at the time of entry or release is defined as the proprietor of the U.S. premises to which the merchandise is to be delivered.

The directive also offers guidance on the type of scenario outlined by DSI. Specifically, section 8.2 provides:

In instances when individual customers place their orders directly with the overseas shipper and the overseas shipper consolidates the orders and sends one shipment to a distributor in the U.S. or directly to the individual customers, for Customs purposes, the ultimate consignee is the individual customer. This is because the individual customer is the party who purchased the imported merchandise from the overseas shipper.

A primary purpose of the ultimate consignee requirement is to enable CBP to have knowledge of both the person to whom, and the place where, the imported merchandise is going in the United States. Thus, with several limited exceptions involving merchandise temporarily imported under bond, foreign entities are precluded from assuming the role of ultimate consignee. This policy is set down in section 6.4 of the directive. Thus, DSI as a Canadian company may not serve in that capacity. The fact that it may still own the goods when they are imported and entered is immaterial. The ultimate consignee will be the individual customers who placed the orders for the office supplies from DSI.

HOLDING:

DSI as a foreign company cannot serve in the capacity of ultimate consignee. Rather, the individual purchasers are the ultimate consignees.

Sincerely,

Glen E. Vereb
Chief

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