AIR-1-CO:R:C:E 222996 PH
Robert A. Calandra, Esq.
Ronald W. Gerdes, Esq.
Sandler, Travis & Rosenberg, P.A.
505 Park Avenue
New York, New York 10022-1106
RE: Transfer within a port of unentered merchandise; 19 CFR
4.38(a); 19 CFR 122.2; 19 CFR 112.21
Dear Messrs. Calandra and Gerdes:
In your letters of January 31 and March 26, 1991, you
request confirmation that your client, Burlington Air Express
(the inquirer) may receive in-bond cargo at its carrier facility
on a "house-to-house" basis and need not utilize a container
freight station. Our ruling follows.
FACTS:
You state (all material in the FACTS portion of this ruling
is based on statements in your January 31 and March 26, 1991,
letters which are assumed to be accurate and complete in every
material respect (see 19 CFR 177.9(b)(1))) that the inquirer
ships air freight into ports of entry of the United States. The
air freight is moved via delivery ticket, permit, or "D.A.D."
(Delivery Authorization Document) by a licensed bonded cartman to
one of the inquirer's bonded international air carrier facilities
which is located at or adjacent to the airport of arrival. The
merchandise is then cleared by Customs and entered.
The inquirer is both a bonded carrier and an international
carrier. The inquirer operates a "hub" facility (see 19 CFR
128.1(d)) at Fort Wayne, Indiana. The inquirer has cargo
facilities at each of its locations at ports of entry but it does
not operate Customs bonded warehouses at these locations. The
inquirer's wholly owned subsidiary, Burlington Air Imports (the
subsidiary), is a licensed Customs broker.
The merchandise under consideration will be consigned from
and to the inquirer but it will be owned, in practically all
situations, by third parties not related to the parent
corporation. The subsidiary may or may not act as Customs broker
with regard to the merchandise, depending on the wishes of the
parties in interest. Reports of arrival (of the arriving
aircraft), permits to unlade, and manifests (of the merchandise)
will be in accordance with applicable law and regulations and
local guidelines. The merchandise will be entered within the
time requirements related to the lay period. The merchandise
will be entered by the party who has the right to make entry
under the applicable law and regulations (i.e., the owner,
purchaser, or a Customs broker). If a Customs broker is
involved in the transaction, the broker may or may not be the
subsidiary.
ISSUE:
May merchandise which is brought into the United States on
one air carrier be transferred, before the merchandise is
entered, to the facility of the bonded carrier and international
carrier to which the merchandise is consigned?
LAW AND ANALYSIS:
Section 4.38(a), Customs Regulations (19 CFR 4.38(a)),
provides, in part, that:
... The district director may authorize unentered
merchandise brought in by one carrier for the
account of another carrier to be transferred
within the port to the latter carrier's
facility. Upon receipt of the merchandise the
latter carrier assumes liability for the
merchandise to the same extent as though the
merchandise had arrived on its own vessel.
Pursuant to 49 U.S.C. App. 1509(c) and 19 CFR 122.2,
aircraft arriving in the United States and the persons and
merchandise carried thereon are subject to the laws and
regulations applicable to vessels, except as otherwise provided
for in the Customs Regulations. There is no provision for
aircraft analogous to that in 19 CFR 4.38(a) (quoted above).
Therefore, the provision in 19 CFR 4.38(a) is applicable to
aircraft. We note that this provision is only applicable to the
transfer of unentered merchandise within a port (i.e., transfer
under this provision may not be to a facility outside a port,
even if "adjacent to the port of arrival"; such a transfer would
be subject to the transportation-in-bond requirements in 19 CFR
Part 18). We also note that this provision is discretionary; it
merely authorizes the district director to permit the transfer of
unentered merchandise from an arriving carrier to the facility of
the carrier for which the merchandise was brought into the United
States under the circumstances set forth in the provision.
Exercise of this discretion by the district director would be
dependent on the particular circumstances involved.
Even if the district director grants the authorization
provided for in 19 CFR 4.38(a) (i.e., in this case, permitting
unentered merchandise brought in for the account of the inquirer
to be transferred from the carrier on which it arrived to the
facility of the inquirer), the usual requirements applicable to
consumption entries must be complied with. That is, in addition
to the other entry requirements in 19 U.S.C. 1484 and 19 CFR
Parts 141-143), the entry and entry documentation must be timely
filed (see 19 CFR 141.5 and 142.12) and entry must be made by a
person with the right to make entry (see 19 U.S.C. 1484 and 19
CFR 141.11). In this regard, since the inquirer would be a
nominal consignee, a Customs broker designated by the inquirer to
make entry would be required to be the importer of record (see
Customs Directive 3530-02, November 6, 1984). Furthermore,
unless specifically exempted (see 19 CFR 125.12), the transfer of
the unentered merchandise from the carrier on which it arrived to
the facility of the inquirer must be performed by a licensed
Customs cartman (see 19 CFR 112.21).
HOLDING:
A district director has the discretion, under 19 CFR
4.38(a), to authorize the transfer of merchandise, before the
merchandise is entered, from the air carrier on which the
merchandise was brought into the United States to the facility of
the bonded carrier and international carrier to which the
merchandise is consigned, provided that:
1. The transfer is within the port of arrival;
2. The transfer is performed by a licensed Customs
cartman, unless specifically exempted; and
3. The usual entry requirements (e.g., in particular,
those relating to time of entry and right to make
entry) are complied with.
Sincerely,
John Durant, Director
Commercial Rulings Division