HQ 116133 - Aircraft; Outward Manifest; Consolidated Shipments; House Air Waybills; 19 CFR 122.48, 122.73, 122.75 - United States International Trade Commision Rulings

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HQ 116133

April 28, 2004

AIR-4-RR:IT:EC 116133 rb

CATEGORY: CARRIER

Mr. Edward D. Greenberg
Galland, Kharasch, Greenberg, Fellman & Swirsky, P.C. 1054 Thirty-First Street, NW.
Washington, D.C. 20007-4492

RE: Aircraft; Outward Manifest; Consolidated Shipments; House Air Waybills; 19 CFR 122.48, 122.73, 122.75

Dear Mr. Greenberg:

In your letter of February 18, 2004, received by facsimile transmission, you asked whether there was any statute or regulation which required that a house air waybill be prepared and issued for each shipment that is part of a consolidated export shipment. This question is addressed below.

FACTS:

In a number of instances, an air freight forwarder has consolidated two or more individual export shipments sent from different shippers to a single consignee; in so doing, the freight forwarder prepared a master air waybill (MAWB) for the air carrier, listing itself as both the shipper and consignee. However, the air cargo manifest prepared by the forwarder did not cover all of the separate shipments which together comprised the consolidation. Thus, CBP officials were not able to confirm that the necessary information for all the individual shipments in the consolidation had been submitted through the Automated Export System (AES). As a result, in each instance the CBP officials issued a seizure notice for the goods, whereby the forwarder had to file a petition for remission, establishing that the AES record for the goods had been presented and being assessed a penalty.

The failure of various air forwarders to manifest each shipment in a consolidation has reportedly led some CBP officials to conclude that a house air waybill is required for each such shipment, with § 122.48(c), Customs Regulations (19 CFR 122.48(c)), being cited to support this position.

It is contended, however, that there is no statutory or regulatory authority compelling the issuance of individual, or house, air waybills for each shipment that becomes part of a consolidated shipment; and that as long as the required information is contained in an appropriate manifest format, either on a separate manifest record prepared for that purpose or on the MAWB, the information needed by CBP to properly discharge its functions will be readily available to it.

ISSUE:

Whether there is a legal requirement for CBP purposes that an individual, or house, air waybill be prepared and issued in connection with an air cargo manifest for each shipment that is part of a consolidated export shipment.

LAW AND ANALYSIS:

Under 19 U.S.C. 1431(a), (b) and (d)(1)(D), the manifest required for vessels that must enter or clear may be supplemented by bill-of-lading data in the manner prescribed by regulation; likewise, under 19 U.S.C. 1644a(b)(1)(E), the laws relating to the entry and clearance of vessels may by regulation be applied to civil aircraft. Hence, the use of bill-of-lading data in relation to a vessel or air cargo manifest is governed by regulation; and, in the air environment, it is observed that air waybills are treated as bills of lading for Customs purposes (see T.D. 78-394, Vol. 12 Cust. Bull. 839, 845 (1978)).

Accordingly, as to the issuance of air waybills in connection with an air cargo manifest, the relevant regulatory requirements in the present context are essentially the same whether the related air cargo manifest concerns inbound cargo (19 CFR 122.48), or outbound (export) cargo (19 CFR 122.73, 122.75). In either case, the appropriate form for the air cargo manifest is Customs and Border Protection (CBP) Form 7509 (formerly, and for convenience hereinafter referred to as, Customs Form (CF) 7509).

Initially, for inward cargo, § 122.48(c) provides in pertinent part:

The air cargo manifest, Customs Form 7509, must contain all required information regarding all cargo on board the aircraft, except that a more complete description of the cargo shipped may be provided by attaching to the manifest copies of the air waybills covering the cargo on board, including, if a consolidated shipment, any house air waybills. When copies of air waybills are attached, the statement “Cargo as per air waybills attached” must appear on the manifest.

(emphasis added). Quite obviously, the plain language of § 122.48(c) cannot rightly be read as necessarily requiring the issuance and/or use of air waybills. Rather, § 122.48(c) basically affords the option of either furnishing all the requisite information for the cargo on the cargo manifest, or instead supplying this information by means of air waybills, including house air waybills, that accompany the manifest.

Notably, Customs Directive No. 3240-068,* of March 20, 1990 (Air Cargo Manifest: CF- 7509 Revision), which concerned a revision of the air cargo manifest form to explicitly capture shipper and consignee data, concisely mirrors the plain meaning of § 122.48(c) in not requiring the creation of individual or house air waybills. In particular, the Directive observes that under § 122.48(c) “carriers or freight forwarders may choose to submit copies of master and house air waybills in lieu of completing the CF-7509” (emphasis added).

Moreover, in addressing the substantively-identical predecessor provision to § 122.48(c) (19 CFR 6.7(b)(3)(i) (1985)) (and see T.D. 88-12, Vol. 22 Cust. Bull. 36, at 40, 113 (1988)), Customs Directive No. 3260-039,* of July 23, 1985 (Use Of Air Way- bills As Attachments To Cargo Manifests), further confirms that “[i]f the carrier is unable to provide acceptable HAWB’s [house air waybills], all of the required detail about the cargo in the consolidated shipment must be provided on CF 7509" (emphasis added). And such detail would of course include information, such as the identities of all shippers and consignees, that would/should have appeared on the house air waybills themselves (i.e., house air waybill level information) had such air waybills been completely and correctly prepared and presented.

(* While Customs Directives 3240-068 and 3260-039 are shown as having been cancelled as of August 19, 1996, by CBP Headquarters Office of Field Operations (OFO), these Directives have not been superseded, and their substantive provisions insofar as is relevant to the present case are still in effect.)

Where Inward Manifest Incomplete; Consolidated Shipment

As further acknowledged in Customs Directive 3240-068 for incoming cargo, a lack of any required bill-of-lading information on either a carrier’s or freight forwarder’s consolidation manifest is sufficient reason for Customs [now CBP] officers to place “holds” on such shipments until the information has been supplied. Carriers, with the cooperation of freight forwarder agents, must provide all necessary manifest data when requested by a CBP officer. If the required information is not provided on a manifest, the cargo in question may not leave the place of unlading; and existing procedures pertaining to manifest violation penalties in this regard remain unchanged.

Outward Manifest; Consolidated Shipment

As already stated, the same procedures as discussed above would reasonably apply as well to outward cargo - either complete details about the cargo must be included on the cargo manifest, or on air waybills that are attached to the manifest. In this respect, § 122.73(b) provides that the air cargo manifest (CF 7509) shall show all information required. Coincident with this, § 122.75(a) states that a complete air cargo manifest shall list all cargo laden, and show for each item the air waybill number, or the marks and numbers on packages and the type of goods carried; and, in § 122.75(a)(1), for shipments on an air waybill, a copy of each waybill on which such shipments are listed may be attached to the air cargo manifest, and the number of the air waybill may be listed on the air cargo manifest. “The statement ‘Cargo as per Air Waybill Attached’ must appear on the air cargo manifest if this is done“ (§ 122.75(a)(1)).

In sum, therefore, while the preparation and issuance of house air waybills for consolidated shipments may admittedly be a routine, regular industry practice (see, e.g., Headquarters ruling (HQ) 114113, of October 26, 1998 (“It is typical in situations where a carrier receives a shipment from a consolidator for the carrier to issue both a master bill of lading and house bills of lading providing information on the individual packages”)), there is nevertheless at present no legal or regulatory mandate that house air waybills be generated for CBP purposes to support an air cargo manifest in the case of consolidated shipments. However, in the absence of such house air waybills, complete and correct information, including house air waybill level information, about the subject cargo must appear on the air cargo manifest itself or on the master air waybill that may accompany the manifest.

HOLDING:

There is currently no legal or regulatory requirement for CBP purposes that an individual, or house, air waybill be prepared and issued in connection with an air cargo manifest for each shipment that is part of a consolidated export shipment. However, in the absence of such air waybills, complete and correct information, including house air waybill level information, about the subject cargo must appear on the air cargo manifest itself or on the master air waybill that may accompany the manifest.

Sincerely,

Glen E. Vereb

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