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HQ H011823





October 16, 2007

VES-5-07-OT:RR:BSTC:CCI H011823 GG

CATEGORY: CARRIER

Ms. Susan Kohn Ross, Esq.
Rodriguez O'Donnell Ross Gonzales & Williams, P.C. 5777 W Century Blvd., Suite 1500
Los Angeles, CA 90045

RE: Advance Electronic Cargo Information; Vessel; Vessel Entry; 19 U.S.C. § 1434;

Dear Ms. Ross:

This is in response to your correspondence of May 23, 2007, on behalf of your client, MarineLink, Inc. (MarineLink), requesting a ruling regarding the operation of its vessel service on the Great Lakes between the U.S. and Canada. We are also in receipt of your email correspondence dated September 10, 2007, as well as your letter of October 3, 2007, which was sent in response to our telephone conference of September 17, 2007. Our ruling on this matter is set forth below.

FACTS

MarineLink contemplates operating a scheduled vessel service in the Great Lakes area. There are two proposed routes, and at least one regularly scheduled trip each business day per route on a year-round basis. One route involves loading at Port Maitland, Ontario and crossing Lake Erie to discharge at Ashtabula, Ohio. The other route involves loading at Hamilton, Ontario and crossing Lake Ontario to discharge at Oswego, New York. Approximately four hours after arrival at each port, a return trip to the original port of departure is anticipated.

It is contended that the vessels Marinelink proposes to use for this operation are ferries intended for use in transporting commercial cargo only and will not carry any passengers. The proposed service would transport truck trailers stuffed with commercial cargo; however, the cabs and drivers would not accompany the loaded trailers. Instead, the trailers will be delivered to the ferry by one driver and picked up at destination by a different driver. The trailers would be loaded onto the subject vessels upon departure and offloaded upon arrival by MarineLink employees.

It is further provided that Excel Transportation Services, Inc. ("Exel"), an over-the-road transportation broker and logistics provider, will be coordinating transportation activities for MarineLink. It is expected the truck carrier or driver will forward the e-manifest and shipment documents directly to their selected U.S. customs broker at least one (1) hour before the truck arrives at the Canadian port of departure on Lake Erie or Lake Ontario. Concurrently, the same information will be sent to Exel, who will follow-up with the U.S. customs broker to ensure the e-manifest and entry data are submitted to CBP in a timely manner. Exel will verify the submission of the required documentation prior to loading the trailer on the ferry. The shipment documents pertaining to each trailer load will be held in a sealed pouch by the vessel captain, who will turn them over to CBP upon arrival at the U.S. discharge port. Entry will be pre-filed by the importer's U.S.-side customs broker prior to stowage of the conveyance on the ferry. Alternatively, the importer may elect to move the trailer in-bond to another destination.

ISSUE

Whether the vessels used to transport truck trailers containing cargo between Canada and the U.S. in the proposed operation described above are subject to CBP's advance electronic cargo information transmission requirement pursuant to 19 CFR 4.7(b)(2).

LAW AND ANALYSIS

Section 4.7(a), CBP Regulations (19 C.F.R. § 4.7(a)) provides that "every vessel arriving in the United States and required to make entry shall have on board...a manifest, as required by section 431, Tariff Act of 1930 (19 U.S.C. § 1431), and by this section." (emphasis added) Further, section 4.7(b)(2), CBP Regulations (19 C.F.R. § 4.7(b)(2)) provides that 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... 24 hours before the cargo is laden aboard the vessel at the foreign port...The current approved system for presenting electronic cargo declaration information to CBP is the Vessel Automated Manifest System (AMS)." (emphasis added)

Any vessel arriving from a foreign port or place must make formal entry within 48 hours after arrival at any port or place in the United States. See 19 U.S.C. § 1434(a)(1)) and 19 CFR 4.3(a)(1). We note, however, that Title 19, United States Code § 1441 (19 U.S.C. § 1441) provides for certain exceptions to vessel entry and clearance requirements. Specifically, 19 U.S.C. § 1441(2) exempts from entry, "Passenger vessels making three trips or oftener a week between a port of the United States and a foreign port, or vessels used exclusively as ferryboats, carrying passengers, baggage, or merchandise..." (emphasis added).

Consequently, if Marinelink's vessels are considered to be ferryboats for purposes of 19 U.S.C. 1441(2) as is contended, they would be exempt from the above-cited vessel entry requirement and the attendant advance electronic cargo information transmission requirement of 19 CFR 4.7(b)(2). In support of Marinelink's claim that its vessels are ferries, reference is made to the definitions of the term "ferry" found in the Internal Revenue Code (26 U.S.C. 4462(a)(4)(B)(11)), in the CBP user fee statute (19 U.S.C. 58c(c)(1)), and in the CBP regulation applicable to the electronic transmission of passenger and crew manifests (19 CFR 4.7b). We note, however, that these definitions are not controlling with respect to the requirement to transmit advance electronic cargo information pursuant to 19 CFR 4.7(b)(2) which does not contain a definition of the term "ferry" for purposes of its administration. We are therefore left to examine existing applicable case law in this regard.

Whether a particular vessel is considered to be a ferryboat is an issue that has been the subject of longstanding court decisions. Ferries have been defined as, "...a continuous line of road" leading from one side of the water to another. Canadian Pac. Ry. Co. v. U.S., 73 F.2d 831, 832; (9th Cir. 1934); see also U.S. v. Puget Sound Nav. Co., 24 F.Supp. 431, 432 (D.C. Wash. 1938). In general, "a ferry is a continuation of the highway from one side of the water over which it passes to the other, and exists for the transportation of passengers or travelers with their vehicles and such property as they may have with them." 35 AM. JUR. 2d Ferries § 1 (2001). Further, a "'ferry' is a substitute for a bridge where a bridge is impracticable, and its end and use are the same...as a link in the highway system...and does not include the transportation of goods, wares and merchandise by themselves." U.S. v. Puget Sound Nav. Co., 107 F.2d 73, cert. denied 60 S.Ct. 608 (1939).

This focus on a ferry as an extension of a highway appears in other definitions, such as "whether a boat is a 'ferry' and comprises a continuous part of the road or highway depends on length of run, type of ship." BLACK'S LAW DICTIONARY 620 (6th ed. 1990) (citing Alaska S.S. Co. v. Federal Maritime Comm'n, 399 F.2d 623, 628 (9th Cir. 1968). In addition, a ferry is defined as "a vessel designed to carry passengers and/or vehicles, and which...runs on a regular schedule." THE OXFORD COMPANION TO SHIPS AND THE SEA 299 (2nd ed. 2005).

These definitions, however, do not capture the essence of MarineLink's operation, since the vessels under consideration will only be transporting truck trailers without their cabs or drivers, i.e., no passengers will be on board. These stuffed trailers are therefore akin to containers carrying commercial cargo. Their transportation on the subject vessels as described in Marinelink's proposal would therefore not constitute the continuation of a highway as discussed in, and established by, the above-cited legal authorities.

Based on the foregoing, we find that MarineLink's vessels engaged in their proposed service do not constitute ferries for purposes of the exemption from entry and clearance set forth in 19 U.S.C. 1441(2). Consequently, they are vessels that must comply with the advance electronic cargo information transmission requirement set forth in 19 CFR 4.7(b)(2).

HOLDING

The vessels used to transport truck trailers containing cargo between Canada and the U.S. in the proposed operation described above are subject to CBP's advance electronic cargo information transmission requirement pursuant to 19 CFR 4.7(b)(2).

Sincerely,

Glen E. Vereb

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