- Type : • HTSUS :
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Related:
116004
ENT-1-03
OT:RR:CTF:ER H048943 ECD
M. Jason Cunningham
Sonnenberg & Anderson
125 South Wacker Drive
18th Floor
Chicago, Illinois 60606
RE: 19 C.F.R. § 142.3; Customs Directive No. 3550-079A (June 27, 2001); American Goods Returned for Repair; Ultimate Consignee, Nominal Consignee, Customs Broker
Dear Mr. Cunningham:
This is in response to your request, on behalf of Geodis Wilson USA, Inc. (“Geodis”), for a ruling pursuant to 19 C.F.R. § 177.2, that U.S. Customs and Border Protection (“CBP”) received on January 12, 2009. Geodis requests a ruling determining whether it should be designated as the ultimate consignee at the time of entry, when the foreign owner of the United States origin goods is returning them to the United States for repair, and anticipates the goods will be returned to it when the repairs are completed, but the foreign owner does not know at the time of entry into Geodis’ warehouse who will perform the repairs. Because Geodis has specifically described a prospective transaction and filed its request pursuant to Part 177 of CBP Regulations, and CBP determines that one of the issues presented merits a definitive interpretation of customs law, CBP is responding with a ruling letter. See 19 C.F.R. § 177.8.
BACKGROUND:
While Geodis is an international freight-forwarder and a U.S. licensed customs broker, it also provides third party logistics: warehousing and storing, consolidating into one shipment (cross-docking) or breaking down into multiple shipments, and generally packing, sorting, testing, inspecting, labeling, and distributing its clients’ goods.
Geodis is contemplating a transaction with a non-resident importer that has several international locations (“foreign company”). The foreign company purchases goods from producers in the United States. Some of those goods must be returned to the U.S. producers for repair. The foreign company is proposing that it ship the goods to the United States, and for Geodis to arrange customs clearance on behalf of the foreign company. According to Geodis, the goods would be entered as U.S. goods returned under the applicable subheading of the Harmonized Tariff System of the United States, (“HTSUS”). The goods would be delivered to Geodis’ warehouse, where Geodis would inspect them, sort them, and apply the appropriate label. After the “inspection and value added criteria are met,” Geodis would arrange delivery of the goods to at least one repair facility, which is not related to Geodis. The foreign company would retain title to the goods; title would not pass to the repair facilities or to Geodis, nor would the goods be consigned to the repair facilities or to Geodis. In the contemplated transaction, the only location where the foreign company and Geodis would know with certainty that the goods would be delivered into the United States at the time of entry would be Geodis’ warehouse. In a footnote, Geodis states that in different transactions, Geodis “may merely sort the merchandise at its warehouse, then send it for repair.”
Geodis requests that CBP issue a ruling as to who should be listed as the ultimate consignee in its contemplated transaction, in which the repair company is unknown at the time of entry. Geodis mentions, as hypothetical situations, other transactions in which the repair company might be known or the goods would go to multiple U.S. repair companies.
ISSUE:
Whether a party providing third party logistics should be listed as the ultimate consignee, pursuant to 19 C.F.R. § 142.3, for U.S. origin goods owned by a non-resident importer that are entered for repair and that will be returned to the non-resident importer, when the repair company is unknown at the time of entry.
LAW AND ANALYSIS:
Geodis, as a licensed customs broker, has the right to make entry on behalf of the foreign company in the ports where it is licensed to transact customs business. Only an “importer of record” may enter goods for consumption; an importer of record may be the owner or purchaser of the goods or, when appropriately designated by the owner, purchaser, or consignee, a licensed customs broker. 19 U.S.C. § 1484(a)(2)(B). A nominal consignee may designate a customs broker to make entry on its behalf, but may not make entry itself unless it is also licensed to conduct customs business in the CBP district where the goods will enter. See National Customs Brokers and Forwarders Ass’n v. United States, 731 F. Supp. 1076, ---, 14 C.I.T. 108, 111 (Ct. Int’l Trade 1990)(“Under the statute a consignee may designate a licensed broker to enter goods, even if the consignee may not enter goods itself.”)(“Nat’l Customs Brokers”). Therefore, if Geodis was a nominal consignee, it could designate itself as the licensed broker to enter the goods, provided that Geodis is permitted to transact business in the ports where the goods are being entered.
In making entry, the importer of record is required to report ultimate consignee information, pursuant to 19 CFR § 142.3(a)(6), which provides:
Identification. When merchandise is imported having been sold, or consigned, to a person in the United States, the name, street address, and appropriate identification number of that person, as provided in § 24.5 of this chapter, shall be shown on the entry documents (CF 3461, 3461 ALT, 7501).
When, at the time of immediate delivery, entry or release, there is no known buyer, the name, street address, and appropriate identification number (as above) of the premises in the United States to which the merchandise is to be delivered must be shown on the entry or release documents.
The term consignee is not synonymous with owner or buyer, but “includes both nominal consignees and ultimate consignees.” See Nat’l Customs Brokers, 14 C.I.T. at 111 (citing R. Sturm, Customs Law and Administration § 2.3 (3rd ed. 1989)).
In the contemplated transaction, none of the parties knows who will repair the goods, the foreign company retains title to the goods, and the documents accompanying the goods show that they will be delivered to Geodis’ warehouse. Legacy Customs, now CBP, issued a directive on ultimate consignee requirements at the time of entry or release, and defined “ultimate consignee”:
The ultimate consignee at the time of entry or release is defined as the party in the United States to whom the overseas shipper sold the imported merchandise. If at the time of entry or release the imported merchandise has not been sold, then the ultimate consignee at the time of entry or release is defined as the party in the United States to whom the overseas shipper consigned the imported merchandise. If the merchandise has not been sold or consigned to a U.S. party at the time of entry or release, then the ultimate consignee at the time of entry or release is defined as the proprietor of the U.S. premises to which the merchandise is to be delivered.
Customs Directive No. 3550-079A at section 6.3 (June 27, 2001).
A primary purpose of the ultimate consignee requirement is to enable CBP to have knowledge of both the person to whom, and the place where, the imported merchandise is going in the United States. For formal entries, neither a nominal consignee, who is defined as a carrier, express consignment operator, freight forwarder, or consolidator, nor a customs broker may be listed as the ultimate consignee. See id. at sections 7.1 -7.2. However, there are exceptions: if the customs broker owns the goods, or if there is no known U.S. buyer and the accompanying documents show that goods will be delivered to the customs broker’s premises, then the customs broker may be listed as the ultimate consignee. See id. at section 7.1. The rule is similar for nominal consignees: if a nominal consignee owns the goods, or if there is no known U.S. buyer and the accompanying documents show that the goods will be delivered to the nominal consignee’s premises, then the nominal consignee may be listed as the ultimate consignee; nevertheless, a nominal consignee may not be identified as the importer of record. See id. at section 7.2. A non-resident of the United States may be the ultimate consignee only for merchandise entered under subheading 9813.00.35 or 9813.00.50, HTSUS. See id. at section 6.4; see also HQ 116004 (September 29, 2003).
In the contemplated transaction, if neither the foreign company nor Geodis know to whom the goods will be sent for repair, and the documents accompanying the goods indicate that they will be delivered to Geodis’ warehouse, then Geodis should be listed as the ultimate consignee.
Geodis states that the goods will be entered as U.S. goods returned under the applicable subheading, HTSUS. Subheading 9801.00.1012 describes the articles as:
Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad;
Articles returned temporarily for repair, alteration, processing or the like, the foregoing to be reexported.
For the foreign company’s goods to be eligible for classification in subheading 9801.00.1012, HTSUS, upon reimportation into the United States, the foreign company, through Geodis, will have to be able to provide the necessary information and documents pursuant to 19 C.F.R. § 10.1. If the goods were not clearly marked with the name and address of the U.S. manufacturer, then other documentation may have to be provided to substantiate the claim that the goods were products of the United States that were exported without an advance in value or an improvement in their condition. If the U.S. producer of the goods is known, and the foreign company intends for the original producer to repair the goods, then the parties performing the repairs may be known. Geodis suggested, as a hypothetical situation, that the repairer might be known. Because Geodis poses the question as a hypothetical matter, CBP will not issue a ruling letter. See 19 C.F.R. § 177.7(a). Geodis may request a ruling on this issue, provided it describes the prospective transaction in sufficient detail. See 19 C.F.R. § 177.1(a)(1) and 177.2(b)(1).
HOLDING:
Geodis should name itself as the ultimate consignee, when the U.S. origin goods, owned by a non-resident company, entered temporarily for repair, are to be delivered to Geodis’ warehouse, the documents accompanying the goods indicate they will be delivered to Geodis’ warehouse, and none of the parties that will repair the goods is known.
A copy of this ruling letter should be attached to the entry documents filed at the time the subject goods are entered. If the documents are filed without a copy of this ruling letter, the ruling letter should be brought to the attention of CBP officials at the port of entry.
Sincerely,
William G. Rosoff, Chief
Entry Process and Duty Refunds Branch