ENT-1-03-CO:R:C:E 223772 SLR
Mr. Donald W. Babcock
Associated Customhouse Brokers, Inc.
1099 Jay Street, Building C-5
Rochester, NY 14611
RE: Consignee; Right to Make Entry; Importer of Record;
Customhouse Broker; Power of Attorney; Master Air Waybill;
Consolidated Entry; Consolidated Entry Summary; Merchandise
Processing Fees; Transfer of Liability for Increased or
Additional Duties.
Dear Mr. Babcock:
This is in response to your February 27, 1992 binding ruling
request, made on behalf of your client, Clinton Lloyd d/b/a Irish
Import Shop ("Irish Imports"), regarding a consignee's right to
make entry as well as various other entry related issues.
FACTS:
In your letter, you indicate that the relevant facts
surrounding the import shipments for Irish Imports are that:
1) They are shipped on 1 master air waybill.
2) The air waybill is consigned directly to
Irish Imports.
3) The merchandise shipped via the 1 air waybill
originates from various Irish exporters.
4) The merchandise is covered by commercial
invoices indicating sale to various U.S.
companies (Irish Imports, themselves,
and others).
5) In all cases, the goods are released to
Irish Imports to be held in their possession
until disposition instructions are received
from the Irish exporters.
6) In all cases, Irish Imports invoices the
purchaser for U.S. Customs duties, service
fees, and domestic transportation charges.
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7) In some cases, Irish Imports actually pays
the commercial invoice amount to the Irish
exporter (even though the invoice may show
a different U.S. company). When this is
the case, the Irish exporter considers the
international transaction complete and Irish
Imports has the sole responsibility to collect
the payment for the value of the imported
merchandise (plus the additional fees and
charges mentioned above).
8) All consignments shipped to Irish Imports
include goods for which they are the actual
purchaser.
9) The Irish exporters and U.S. companies destined
to receive the goods look to Irish Imports to
arrange for Customs clearance prior to
distribution.
In a telephone conversation with Customs Headquarters, you
indicated that Associated Customhouse Brokers is the brokerage
house appointed by Irish Imports to enter the merchandise on its
behalf, and that Associated Customhouse routinely designates
Irish Imports as the importer of record. Customs Buffalo has
challenged this designation.
You write to ask whether Irish Imports qualifies as the
importer of record for all of the merchandise imported on each
master air waybill consigned to them. If our answer is "no," you
ask that we confirm that Associated Customhouse Brokers could
appear as the importer of record; that subsequent to entry,
Associated Customhouse could substitute a bond in the name of
Irish Imports; that no power of attorney would be required to
submit the entry; and that one entry number, one CF 3461, one
CF 7501, and one merchandise processing fee (MPF) calculation
would satisfy applicable U.S. Customs requirements.
ISSUES:
Whether Irish Imports has a sufficient "financial interest"
in the imported merchandise to permit Irish Imports the "right to
make entry" of all merchandise; and, if not, whether Associated
Customhouse Brokers can appear as the importer of record.
Whether a power of attorney is required for Associated
Customhouse Brokers to transact Customs business on behalf of
Irish Imports.
Whether shipments listed on one master air waybill can be
entered using one entry number, one CF 3461, one CF 7501, and one
merchandise processing fee calculation.
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Whether subsequent to entry, Associated Customhouse Brokers
can transfer liability for increased or additional duties by
substituting a superseding bond in the name of Irish Imports.
LAW AND ANALYSIS:
Under section 484, Tariff Act of 1930, as amended (19 U.S.C.
1484), only an "importer of record" has the right to make entry.
"Importer of record" is defined as the owner or purchaser of
the goods, or when designated by the owner or purchaser, or
consignee, a licensed customhouse broker. A nominal consignee
may designate a customhouse broker to make entry on its behalf,
but may not itself make entry. If a customhouse broker makes
entry for a nominal consignee, the broker must appear as importer
of record.
Customs Directive No. 3530-02, dated November 6, 1984,
clarifies and explains the right to make entry. In this
Directive, "owner" or "purchaser" is defined as any party with
a financial interest in a transaction including, but not limited
to, the actual owner of the goods, the actual purchaser of the
goods, a buying or selling agent, a person or firm who imports on
consignment, a person or firm who imports under loan or lease,
a person or firm who imports for exhibition at a trade fair,
a person or firm who imports goods for repair or alteration or
further fabrication, etc. The terms "owner" or "purchaser"
would not include a "nominal consignee," who effectively,
possesses no other right, title, or interest in the goods except
as he possessed under a bill of lading, air waybill, or other
shipping document. Examples of nominal consignees are courier
services, freight consolidators and customhouse brokers who are
not licensed to transact Customs business in Customs districts
where a shipment is being entered.
Here, Irish Imports has a financial interest in the goods
for which it is the actual purchaser and in those goods invoiced
to other U.S. companies for which it has paid and is the actual
owner. However, for the remainder of the goods, it acts as a
mere freight forwarder. As a nominal consignee, therefore,
Irish Imports cannot appear as the importer of record of all the
merchandise listed on each master air waybill. Irish Imports may
appoint Associated Customhouse Brokers to enter the merchandise
on its behalf, and on the behalf of others, but Associated
Customhouse Brokers must appear as the importer of record on
all entry documents.
Before transacting Customs business in the name of its
principal, a customhouse broker must obtain a valid power of
attorney. 19 CFR 141.46. No power of attorney is required here,
however, as Associated Customhouse Brokers will make entry
in its own name as the importer of record.
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Section 141.51 of the Customs Regulations (19 CFR 141.51)
indicates that all merchandise arriving on one vessel and
consigned to one consignee shall be included in one entry.
Furthermore, the holding in National Customs Brokers and
Forwarders Association of America v. United States, CIT Slip Op.
90-17, reprinted at 24 Cust. Bul. No. 12, pg. 37 (Feb. 23, 1990)
allows one entry per vessel if there is a "master" bill of lading
which consigned the merchandise to a single consignee,
notwithstanding the fact that the individual bills of lading
consigned the same merchandise to different "ultimate"
consignees. Pursuant to the regulations and case law, therefore,
Associated Customhouse Brokers need file only one
CF 3461 per master air waybill. Only one CF 7501 is needed
as well. 19 CFR 142.17a.
As to merchandise processing fees, generally speaking, MPFs
apply per entry or release of merchandise. 19 U.S.C. 58c et seq.
As the instant case calls for the filing of a single entry, only
one merchandise processing fee calculation based on the total
value of all goods covered by the master air waybill applies.
Under 19 CFR 141.20(a)(2), an importer of record may
transfer liability for increased or additional duties due upon
liquidation if, at entry, it declares its intention to transfer
liability to the actual owner and provides the owner's bond.
Here, Irish Imports owns only a portion of each shipment and
acts a freight forwarder as to the remainder of the goods.
Consequently, Associated Customhouse Brokers cannot transfer
liability for increased or additional duties by substituting
a superseding bond in the name of Irish Imports. Associated
Customhouse Brokers could eliminate the liability issue
altogether by filing separate entries on behalf of each
consignee, but this would appear to conflict with Associated
Customhouse Brokers' earlier concerns.
HOLDING:
Irish Imports has a financial interest in the goods for
which is the actual owner or purchaser. However, for the
remainder of the merchandise, Irish Imports is a mere nominal
consignee; consequently, Irish Imports cannot be the importer
of record for that merchandise for which it neither owns nor
purchases.
Irish Imports may appoint Associated Customhouse Brokers
to enter the merchandise on its behalf and on the behalf of
others, but Associated Customhouse Brokers must be listed as
the importer of record on all entry documents.
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A power of attorney is not required for Associated
Customhouse Brokers to transact Customs business on behalf
of Irish Imports if Associated Customhouse Brokers is the
importer of record.
Associated Customhouse Brokers need file only one CF 3461
and one CF 7501 per master air waybill, and only one merchandise
processing fee calculation applies if all of the merchandise is
entered and released as one entry.
Associated Customhouse Brokers cannot transfer liability for
increased or additional duties by substituting a superseding bond
in the name of Irish Imports if a single entry is filed.
Sincerely,
John Durant, Director
Commercial Rulings Division