HQ 116227 - United Kingdom Military Cargo Vessels; Advance Electronic Presentation of Cargo Information; 19 CFR 4.5, 4.7 - United States International Trade Commision Rulings

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HQ 116227

May 12, 2004

VES-5-11-RR:IT:EC 116227 GOB

CATEGORY: CARRIER

S. P. Donkersly
Chief Officer RFA
Defence Transport and Movements Agency
Building 400
Defence Logistics Organisation Andover
Monxton Road
Andover Hampshire
United Kingdom SP11 8HJ

RE: United Kingdom Military Cargo Vessels; Advance Electronic Presentation of Cargo Information; 19 CFR 4.5, 4.7

Dear Mr. Donkersly:

FACTS:

This is in response to your letter of May 6, 2004, in which you state as follows:

The Defence, Transport and Movement Agency (DTMA) is the Agency of the United Kingdom Ministry of Defence (MOD) responsible for Military transport and movement worldwide.

The prime method of surface shipment is by Strategic RoRo’s which were built under a Private Finance Initiative to UK MOD specifications. A Commercial Consortium, AWSR Shipping, under the direction of the MOD, specifically DTMA, operates these vessels. They are contracted to the MOD for a 20-year period and are classed as “Government ships employed on non commercial service”. UK nationals who hold Royal Navy Reserve status (similar to US Reservists) man the vessels. There is an option in the contract, not yet exercised, to return the vessels to the commercial market.

When the capacity of the RoRo’s are exceeded then DTMA routinely charters commercial shipping to satisfy Military transport requirements and such charters are also utilised to move military equipments and commercial cargo concurrently.

DTMA ships Military cargo to the USA approximately 3 times per year, the majority being Ammunition and Equipment for joint USA/UK exercises. As indigenous cargoes, i.e., MOD cargo on a MOD vessel they are not carried under a Bill of Lading but a Manifest is produced for administrative purposes.

Following the recent implementation of CBP legislation, particularly in way of AMS regulations, SCAC codes and the requirement for International carrier Bonds, concerns have been raised regarding the continued ability of the MOD to meet its shipping requirements in the manner outlined above.

In that respect can we please therefore request CBP to provide a ruling on the following matters.
a) Should the MOD be judged as the “Carrier” under current legislation?
b) As operators of Government ships on non-commercial service and carrying military cargo, would it be possible to exempt AWSR Shipping from compliance with the AMS regulations?
c) Is it necessary to obtain a SCAC code for future military shipments?
d) Historically the UK MOD has provided Indemnity in lieu of Surety and Insurance and this remains current policy. We would therefore request that MOD be granted exemption from the requirement to hold International Carrier Bonds.
e) Is an exemption possible from the 24 hour rule requiring the manifest be sent to CBP 24 hours prior to cargo being loaded on a vessel in the UK?

ISSUE:

The key issue is whether the subject United Kingdom Military Cargo Vessels are required to present advance electronic cargo information to Customs and Border Protection (CBP) pursuant to 19 CFR § 4.7.

LAW AND ANALYSIS:

Section 343(a) of the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933, enacted on August 8, 2002), as amended by section 108 of the Maritime Transportation Security Act of 2002 (Pub. L. 107-295, 116 Stat. 2064, enacted on November 25, 2002), required that the Secretary endeavor to promulgate final regulations providing for the mandatory collection of electronic cargo information by CBP, either prior to the arrival of the cargo in the United States or its departure from the United States by any mode of commercial transportation (sea, air, rail or truck). Under section 343(a), as amended (codified at 19 U.S.C. 2071 note), the information required must consist of that information about the cargo which is determined to be reasonably necessary to enable CBP to identify high-risk shipments so as to ensure cargo safety and security and prevent smuggling pursuant to the laws that are enforced and administered by CBP.

Consequently, in accordance with the parameters set forth in section 343(a), as amended, a document was published in the Federal Register (68 FR 43574) on July 23, 2003, proposing to amend the Customs Regulations in order to require the advance electronic transmission of information pertaining to cargo prior to its being brought into, or sent from, the United States by sea, air, rail, or truck. The Final Rule amending Customs Regulations in parts 4, 103, 122, 123, 178, and 192 was published as CBP Dec. 03-32 in the Federal Register (68 FR 68140) on December 5, 2003.

The applicable Customs Regulation, 19 CFR 4.7, provides in pertinent part as follows:

§ 4.7 Inward foreign manifest; production on demand; contents and form; advance filing of cargo declaration.

The master of every vessel arriving in the United States and required to make entry shall have on board his vessel a manifest as required by section 431, Tariff Act of 1930 (19 U.S.C. 1431), and by this section. . . . . . .
(b)(2) Subject to the effective date provided in paragraph (b)(5) of this section, and with the exception of any bulk or authorized break bulk cargo as prescribed in paragraph (b)(4) of this section, Customs and Border Protection (CBP) must receive from the incoming carrier, for any vessel covered under paragraph (a) of this section, the CBP approved electronic equivalent of the vessel’s Cargo Declaration (Customs Form 1302), 24 hours before the cargo is laden aboard the vessel at the foreign port (see § 4.30(n)(1)). The current approved system for presenting electronic cargo declaration information to CBP is the Vessel Automated Manifest System (AMS). [All emphasis supplied.]

Notwithstanding the alternate time frames for filing advance cargo information for other than containerized cargo referenced in 19 CFR 4.7a, any vessel exempt from entry would, or course, be exempt from the provision of advance cargo information. In this regard we note that the vessels in question appear to qualify as vessels of the United Kingdom. Consequently, we find relevant 19 CFR 4.5, which provides in pertinent part as follows:

§ 4.5 Government vessels.

(a) No report of arrival or entry shall be required of any vessel owned by, or under the complete control and management of the United States or any of its agencies, if such vessel is manned wholly by members of the uniformed services of the United States, by personnel in the civil service of the United States, or by both, and is transporting only property of the United States or passengers traveling on official business of the United States, or it is ballast. . . .
(c) Every vessel owned by, or under the complete control and management of, any foreign nation shall be exempt from or subject to the laws relating to report of arrival and entry under the same conditions as a vessel owned or controlled by the United States. [Emphasis supplied.]

We will first address the Strategic RoRo’s. The facts you present indicate that these vessels are owned by, or are under the complete control and management of the United Kingdom, are manned wholly by members of the uniformed services of the United Kingdom, by personnel in the civil service of United Kingdom, or by both, and are transporting only property of the United Kingdom. The facts of your request therefore indicate that the above-cited “provisos” are satisfied, i.e., the Strategic RoRo’s are crewed by commissioned and non-commissioned officers and enlisted crews and transport only property of the United Kingdom. Consequently, pursuant to 19 CFR 4.5, we find that the Strategic RoRo’s are not required to report arrival or make entry.

Because the subject vessels are not required to make entry, they are not covered by 19 CFR 4.7(a). Therefore, the subject vessels are not subject to the advance reporting requirements (AMS) described in 19 CFR 4.7(b)(2). See the highlighted language of 19 CFR 4.7(b)(2), above.

Accordingly, the Strategic RoRo’s are not subject to the advance reporting requirements of 19 CFR 4.7, and are therefore not required to have a SCAC code or an international carrier bond.

You state that “[w]hen the capacity of the RoRo’s are exceeded then DTMA routinely charters commercial shipping to satisfy Military transport requirements and such charters are also utilised to move military equipments and commercial cargo concurrently.”

Because these chartered vessels carry commercial cargo as well as military cargo, they are not exempt under 19 CFR 4.5(a) from the requirements to report arrival and make entry. Therefore, these vessels are subject to the advance reporting requirements described in 19 CFR 4.7(b)(2). The carrier must have a SCAC code and an international carrier bond.

If these chartered vessels carried only property of the United Kingdom and if they were under the complete control and management of the United Kingdom or any of its agencies, were manned wholly by members of the uniformed services of the United Kingdom, by personnel in the civil service of the United Kingdom, or both, and if they did not carry any passengers other than those traveling on official business of the United Kingdom, they would be eligible for the same treatment as the Strategic RoRo’s, described above.

You also ask “[s]hould the MOD be judged as the “Carrier” under the current legislation.”

As stated above, under the facts presented the Strategic RoRo’s are not subject to the advance reporting requirements of 19 CFR 4.7. However, in the case where commercially-chartered vessels do not meet the requirements for exemption from entry (and therefore advance reporting), our comments are as follows.

We unable to dictate responsibilities between parties in this regard. To this end, under 19 U.S.C. 1431(b), in pertinent part, the owner or operator of the vessel remains principally responsible for presenting the vessel’s cargo declaration to CBP. And in this connection, under 19 U.S.C. 1436(b), a civil penalty that results from the failure to comply with the requirement to present the advance electronic cargo declaration to CBP would be assessed against the master of the vessel (who in a time charter remains the agent of the owner or operator).

Nevertheless, it would be entirely appropriate for the owner or operator to contractually arrange to have the charterer present the vessel’s cargo declaration to CBP, in circumstances where the charterer: determines the ports of loading and discharge of the cargo and controls its loading and discharge; issues bills of lading for the cargo; knows the cargo information; and furnishes this information as necessary for the preparation of the vessel’s cargo declaration. Such a contractual arrangement, which could render the time charterer the acceptable “carrier” for purposes of CBP Dec. 03-32, could also allow for indemnifying the owner or operator for any loss or liability resulting from any act or omission on the part of the charterer in this respect, including any loss resulting from the delay of the vessel in port.

HOLDINGS:

The Strategic RoRo’s are not subject to the advance reporting requirements of 19 CFR 4.7, and are therefore not required to have a SCAC code or an international carrier bond.

If, as described above, the chartered vessels carry commercial cargo as well as military cargo, they are not exempt under 19 CFR 4.5(a) from the requirements to report arrival and make entry. Therefore, these vessels are subject to the advance reporting requirements described in 19 CFR 4.7. The carrier must have a SCAC code and an international carrier bond.

Sincerely,

Glen E. Vereb
Chief

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