ENT-1-01
OT:RR:CTF:ER
H242069 MES
Michael McCullough, Esq.
Michael McCullough LLC
155 Water Street
3rd Floor
Brooklyn, NY 11201
RE: Insufficient Financial Interest to be Importer of Record for Right to Make Entry under 19 U.S.C. 1484
Dear Mr. McCullough,
This is in response to your letter requesting a ruling on behalf of your client, Masterpiece International Ltd., which we received on May 17, 2013.
FACTS:
Masterpiece International Limited (“Masterpiece”) provides services related to the relocation of employees of multinational companies from foreign countries to the United States. Among other services provided, Masterpiece represents the employee in all aspects of the relocation process including the transportation and delivery of the employee’s household goods. In your letter, you state that the services offered give Masterpiece an interest in the imported household goods that goes beyond a mere nominal consignee. For example, you state that Masterpiece “exercises dominion and control” over the household goods in a similar manner to someone importing for exhibition or for repair or alteration or further fabrication. You state that the employee relies on Masterpiece to “exercise dominion” over the household goods until the employee has established a presence in the United States. Additionally, you state that the household goods being imported are non-commercial merchandise and as such there is no revenue loss to CBP. Further, you state that Masterpiece signs a written contract to provide its services and the contractual rights include the responsibility to represent the employee in all aspects of the relocation process including insuring, safeguarding, and transporting the household goods. As such, you state that Masterpiece’s interest in the merchandise is “more robust than that [of] a freight forwarder under a bill of lading,” and that you believe you should qualify as importer of record.
ISSUE:
Whether Masterpiece has a sufficient financial interest in the imported household goods to serve as importer of record on the entries.
LAW AND ANALYSIS:
Section 484(a)(1) of the Tariff Act of 1930, as amended (19 U.S.C. § 1484(a)(1)) provides that only parties qualified as the “importer of record” may make entry. Those qualified parties are identified in § 484(b)(2)(B) as the owner or purchaser of the merchandise, or, when appropriately designated by the owner, purchaser, or consignee of the merchandise, a licensed customs broker. Thus, if Masterpiece wishes to be the importer of record, because it is not a broker, it must qualify as the owner or purchaser.
The terms “owner” and “purchaser” are defined in Customs Directive 3530-002A, dated June 27, 2001. Section 5.3.1 of the directive provides:
5.3.1 The terms “owner” and “purchaser” include 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. Any such owner or purchaser may make entry on his own behalf or may designate a licensed Customs broker to make entry on his behalf and may be shown as the importer of record on the CF 7501. 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.
The examples of entities provided in C.D. 3530-002A as those with “financial interest in the transaction” so as to be considered the owner or purchaser of the goods and afforded the right to make entry: a buying or selling agent; one who imports on consignment, under loan or lease, for exhibition, repair, alteration or further fabrication, etc., enjoy something more than a custodial interest in the goods. That is, those considered to have a financial interest in the goods so as to be owners or purchasers, have interests in the goods that go beyond mere custody of the goods as evidenced by those excluded from having a financial interest, i.e., nominal consignees, who are mere possessors of “a bill of lading, air waybill, or other shipping document.” As such, while the owner or purchaser of the merchandise has the right to make entry, a nominal consignee does not. Therefore, if a party is a nominal consignee, that party would not have the right to make entry.
CBP provided examples of nominal consignees in C.D. 3530-0020A as “express consignment operators (ECO), freight consolidators who handle consolidated shipments… and Customs brokers who are not permitted to transact business in Customs ports where a shipment is being entered.” C.D. 3530-002A, Section 5.3.2 (June 27, 2001). In previous rulings, CBP has addressed what constitutes a nominal consignee. In HQ 223772, dated August 6, 1992, an importer asked to be listed as the importer of record for all goods contained in a single shipment for which it would take delivery when it was the actual purchaser of only some of the goods and had no financial interest in the remainder. In that case, CBP denied the importer’s request to act as importer of record for the entire shipment, holding that a party who is not the owner or purchaser of goods but acts merely as a freight forwarder does not have a sufficient financial interest to be the importer of record. Additionally, in HQ 114396, dated January 20, 1999, CBP held that parties who arrange for the transportation, storage, and delivery of imported merchandise are acting as the freight forwarder, and as such are mere nominal consignees, without a sufficient financial interest and are precluded from making entry as the importer of record. In that case, an unlicensed importer and a freight forwarder asked if either could act as importer of record for merchandise owned or sold by others. Therefore, CBP has held that parties that are responsible only for the transportation, storage, and delivery of merchandise, such as freight forwarders, are nominal consignees and do not possess a sufficient financial interest to qualify to act as an importer of record.
As described in your letter, the extent of Masterpiece’s financial interest in the goods is similar to that of a freight forwarder because it effectively possesses no other right, title, or interest in the goods beyond the contract calling to arrange for the transportation, storage, and delivery of the merchandise. And as cited above in HQ 114396, arranging for the transportation, storage, and delivery of goods does not constitute a sufficient financial interest to qualify a party as an owner or purchaser and thus, allow that party to make entry on behalf of another. Because Masterpiece does not have a sufficient financial interest, but instead, simply arranges for the transportation, storage, and delivery of the goods, it is a nominal consignee not authorized to file entries. Therefore, Masterpiece may not be the importer of record on either the entries or entry summaries of the imported household goods.
In your letter, you argue that Masterpiece goes beyond simply being a nominal consignee. You state that Masterpiece offers services before the employee physically enters the United States and therefore the employee relies on Masterpiece to exercise “dominion and control” over the household goods, until the employee has established a presence in the United States. To this end, you claim that the “dominion and control” exercised over the household goods is more similar to one importing for exhibition at a trade fair or one who imports goods for repair or alteration or further fabrication. However, Masterpiece does not exhibit at a trade fair, or repair, alter, or further fabricate. As such, these analogies are not appropriate.
Further, you argue that Masterpiece’s interest in the merchandise is “more robust than that [of] a freight forwarder under a bill of lading” due to the written contract that is signed including the responsibility to represent the employee in all aspects of the relocation process including insuring, safeguarding, and transporting the household goods. To determine the existence of a sufficient financial interest, qualifying one as owner or purchaser, a party must expect or rely on a financial benefit from the imported merchandise and the focus of the inquiry is whether a nexus between the financial welfare of the would-be importer’s business activities and the imported merchandise can be identified. See HQ 231255 (March 28, 2006). However, Masterpiece offers no evidence indicating a relationship between its compensation for the work and the merchandise being properly imported.
And lastly, you state that the goods being imported are non-commercial merchandise and as such there is no revenue loss to CBP. However, there is no exception regarding who may make entry for non-dutiable merchandise. See 19 U.S.C. §1484. Therefore, the fact that there may be no revenue loss to CBP does not alter our determination of whether Masterpiece may be the importer of record.
Despite Masterpiece not being able to be the importer of record, section 5.1.3 of C.D. 3530-002A, provides:
5.1.3 A nominal consignee may designate a Customs broker to make entry on his behalf but may not make entry on his own behalf. If a Customs broker makes entry for a nominal consignee, the broker must appear as importer of record.
Therefore, although Masterpiece may not be listed as the importer of record in these transactions, as a nominal consignee, it may appoint a licensed broker to file the entries. See C.D. 3530-002A, Section 5.1.3. (June 27, 2001).
HOLDING:
Masterpiece does not have a sufficient financial interest in the imported household goods to serve as importer of record on the entries. However, as nominal consignee, it may appoint a licensed broker to serve as importer of record and file the entries.
We note that this ruling is issued on the assumption that all of the information furnished in connection with the ruling request is accurate and complete in every material respect.
Sincerely,
Carrie L. Owens, Chief
Entry Process & Duty Refunds Branch