CON-1-RR:IT:EC 114113 GG
Area Director
U.S. Customs Service
JFK Airport
Building 77
Jamaica, NY 11430
RE: Request for Internal Advice; 19 U.S.C. 1321; Consolidated
Informal Entries; Bills of Lading; House Airway Bills; 19 CFR
10.151, 10.153, 143.23
Dear Sir:
This is in response to your memorandum CLA-1 K:TC:D PD,
dated September 23, 1997, requesting clarification of the
requirements listed in the Customs Regulations for duty free
treatment of merchandise valued under $200.
FACTS:
The internal advice request presents two situations. They
are as follows:
Situation #1: Tourists purchase crystalware at various stores in
Ireland. The stores label each individual package with the names
and addresses of the ultimate purchaser, and the forwarder in
Ireland affixes a United Parcel Service ("UPS") bar-coded label
to each package. The packages are consolidated into containers
for shipment. The bar-code number is a unique identifier for UPS
use in domestic delivery to the ultimate consignee. The
container is manifested under a master air waybill by Aer Lingus,
with a house airway bill ("HAWB") breakdown attached. This HAWB
lists shipper, nominal consignee and ultimate consignee name and
address, quantity, weight, product description, value, and
country of origin on a line item basis. American Cargo Express
("ACE"), a freight forwarder, broker and container freight
station ("CFS") operator in New York, is identified as the
consignee on the master air waybills. ACE prepares a
consolidated informal entry using a CF 7523, Entry and Manifest
of Merchandise Free of Duty, citing Section 321 of the Tariff Act
of 1930, as amended. ACE attaches a copy of the house airway
bill breakdown and several invoices. The house airway bill
number is the last four digits of the UPS label. This is the
number used to identify merchandise selected by Customs for
examination.
Situation #2: Cashes of Ireland ("Cashes") is a catalogue
company that solicits orders in the United States for crystalware
and other articles from Ireland. The orders are consolidated and
shipped to Newark Airport on UPS. Consolidated Distributor
Systems (CDS), a freight
forwarder, is listed as the consignee. The freight is
transferred to Cargo City CFS at JFK. The CFS transmits a
consolidated manifest to Customs electronically via AMS. This
contains Cashes' P.O. box number in Ireland, ultimate consignee
name and address, product description, quantity, price and
country of origin information on a line item basis. Each
individual shipment is assigned a house airway bill number, which
is the same as Cashes' customer order number. Each box is
labeled with the number and the name and address of the customer.
A UPS label is also attached to each package at the CFS for
domestic distribution purposes only. Barthco, a broker, files a
consolidated informal entry, with a hard copy printout of the
house airway bill breakdown as transmitted by the CFS through
AMS. No invoices are attached.
ISSUE:
Whether these shipments qualify for duty-free entry under
Section 321 of the Tariff Act of 1930, as amended.
LAW AND ANALYSIS:
Section 321(a)(2)(C) of the Tariff Act of 1930, as amended,
(19 U.S.C. 321(a)(2)(C)), provides for the duty free entry of
articles valued at $200 or less that are imported by one person
on one day. The purpose of this provision is to minimize expense
and inconvenience to the government disproportionate to the
revenue that is collected. The applicable regulations, which are
enacted under authority of 19 U.S.C. 1498, are found in Sections
10.151, 10.153, and 143.23(j) of the Customs Regulations (19 CFR
10.151, 10.153, and 143.23(j)). (The Section 321 regulations
found in 19 CFR Part 128 are aimed specifically at express
consignment operators and have no application here.)
Section 10.151 provides that shipments valued at not over
$200 may be entered free of duty and tax, unless there is reason
to believe that the shipment is one of several lots covered by a
single order or contract and that it was sent separately for the
express purpose of securing free entry or of avoiding compliance
with any pertinent law or regulation. The regulation also
provides that eligible entries shall be entered under informal
entry procedures. Consolidated shipments addressed to one
consignee shall be treated for purposes of Section 10.151 as one
importation (19 CFR 10.153(d)). A "shipment" in the Section 321
context means the merchandise described on the bill of lading or
other document used to file or support entry, or in the oral
declaration when applicable (19 CFR 101.1; T.D. 94-51).
Section 143.23(j) of the Customs Regulations elaborates on
the format and the type of information Customs requires in a
Section 321 informal entry. Specifically, it provides that --
... a shipment of merchandise not exceeding $200 in
value which qualifies for informal entry under 19
U.S.C. 1498 and meets the requirements in 10.151 ...
may be entered by presenting the bill of lading or a
manifest listing each bill of lading ... The following
information is required to be filed as a part of such
entry:
(1) Country of origin of the merchandise;
(2) Shipper name, address and country;
(3) Ultimate consignee name and address;
(4) Specific description of the merchandise;
(5) Quantity;
(6) Shipping weight; and
(7) Value.
The HAWB's that are submitted by both ACE and Barthco contain
this information. Airway bills are considered to be bills of
lading for Customs purposes (T.D. 78-394). Section 321
importations are entered by presentation of a bill of lading or a
manifest listing each bill of lading. Therefore, ACE and Barthco
would appear to be following the correct procedures. The only
question remains whether the consolidation limitation of Section
10.153(d) of the Customs Regulations would serve as a bar to
entry under this provision.
To reiterate, Section 10.153(d) states that consolidated
shipments addressed to one consignee shall be treated for
purposes of Section 10.151 as one importation. This provision
is designed to prevent any one purchaser from circumventing the
$200 per day value limitation placed on Section 321 importations.
Guidance on this issue is found in T.D. 94-51. In discussing
Section 321 shipments entered both by express consignment
operators and by regular importers, the T.D. states, in pertinent
part, that:
... If the document used to file or support entry is an
individual bill of lading to the ultimate consignee in
the United States, the monetary limitation is applied
on the basis of the value of the shipment on the
individual bill of lading... On the other hand, if the
document used to file or support entry is a master bill
of lading (as opposed to each individual bill of
lading), the monetary limitation is applied on the
basis of the total value of the shipments on the master
bill of lading. The same is true of the application of
the monetary limitation in 321(a)(2) for other
importations (i.e., those not involving an express
consignment entity). This is so because the definition
of "shipment" is for general purposes in chapter I of
title 19 of the CFR, unless the context of the term
requires a different meaning (see 19 CFR 101.1).
In the two situations before us the brokers used the
individual HAWB's to support entry. The HAWB's list the
individual purchasers to whom the merchandise is being shipped as
the consignees. The value of each of these individual shipments
is under $200. In our opinion, Section 10.153(d) would only
become a factor if two or more of the shipments listed on the
HAWB breakdown were addressed to the same consignee. In that
case, the value of those shipments would be added together to
determine the shipment amount. Any amounts in excess of $200
would require entry under regular informal or formal entry
procedures.
There is one final issue for discussion. The internal
advice request questions whether the lists presented as HAWB's
are bona fide bills of lading. A bill of lading (or air waybill,
as the case may be) means a document evidencing the receipt of
goods for shipment issued by a person engaged in the business of
transporting or forwarding merchandise. Section 1-201(6),
Uniform Commercial Code. It is typical in situations where a
carrier receives a shipment from a consolidator for the carrier
to issue both a master bill of lading and house bills of lading
providing information on the individual packages. Since as a
general rule the freight consolidator makes all the arrangements
with the shipper, usually there is no real contact or
communication between the shipper and the ultimate recipients of
the packages. The house bills reflect this indirect relationship
by being less formal than master bills of lading and serve mainly
as a breakdown of data. The documents presented by ACE and Cargo
City would appear to fit into this mold. We see no reason why
they cannot be presented as entry documents under Section 321.
HOLDING:
The shipments qualify for duty-free entry under Section 321
of the Tariff Act of 1930, as amended.
Sincerely,
Jerry Laderberg
Chief,
Carrier Rulings Branch