CO:R:IT:C 112424 MLR
Victor J. Zambetti, Esq.
Taylor, Moseley & Joyner, P. A.
501 West Bay Street
Jacksonville, Florida 32202
RE: Shipper's Export Declaration; Bill of Lading; Cargo
Declaration Outward with Commercial Forms
Dear Mr. Zambetti:
This is in reference to your letter dated August 4, 1992,
requesting a ruling on behalf of your client North Florida
Shipping, Inc., regarding the information required on Shipper's
Export Declarations (SED), Bills of Lading (BOL), and Cargo
Declaration Outward with Commercial Forms (Form 1302-A).
FACTS:
North Florida Shipping, Inc. (hereinafter NFS) is a Florida
corporation wholly owned by Somers Isles Shipping Limited, a
Bermuda corporation. NFS is the agent of record for the CMV
SOMERS ISLES, a ship of German registry which is chartered by
Somers Isles Shipping Ltd. CMV SOMERS ISLES regularly transports
commodities, often containerized, between Fernandina Beach,
Florida, and Hamilton, Bermuda. It is stated that the shippers
and consignees of these commodities include nationals of the
United States and of foreign countries, individuals,
corporations, partnerships, agents, non-vessel-operating common
carriers (NVOCCs), freight forwarders, and consolidators.
NFS states that it has experienced various problems relating
to Customs treatment of its shipments. NFS describes a typical
scenario as follows: A Bermuda entity arrives in the United
States and purchases items from five or six domestic merchants or
manufacturers; the Bermuda entity will contract with a freight
forwarder to have the items shipped to itself in Bermuda; the
freight forwarder completes all the SEDs and BOLs showing the
Bermuda entity as the exporter/shipper and the same Bermuda
entity as the consignee; the freight forwarder delivers the items
and documents to NFS to be carried on the CMV SOMERS ISLES to
Bermuda; NFS presents these documents to Customs in Jacksonville;
Customs either refuses to accept the documents because the
documents do not reflect a domestic exporter/shipper, or accepts
the documents while reserving the right to fine NFS up to $1,000
per incident for filing improper or fraudulent documents.
It is alleged that Customs in Jacksonville has a policy of
only accepting SEDs that have listed as exporter a domestic
entity as evidenced by an Employer Identification Number (EIN) or
a Social Security Number (SSN). This policy is apparently based
on FTSR Letters 151 and 152 from the Bureau of Census, Department
of Commerce. NFS protests these directives because it alleges
that they are not authorized by statute or regulation. It is
further alleged that Customs in Jacksonville mandates that the
shipper on the Form 1302-A be identical to the exporter on the
SED. Therefore, it is contested that the true shipper, a foreign
entity, cannot be listed on the Form 1302-A because a foreign
exporter cannot be listed on the SED.
NFS states that it is time consuming and expensive to
conform the documents to these Customs requirements. A typical
vessel to Bermuda includes approximately 100 BOLs, plus
accompanying SEDs. Furthermore, NFS states that these
requirements force it to file incorrect documents because a
domestic merchant must be shown as the exporter/shipper when in
actuality the Bermuda entity is the exporter/shipper.
Furthermore, it is alleged that Customs in Jacksonville does
not subject shipments bound to Puerto Rico and other foreign
destinations to the same scrutiny as NFS shipments. NFS has also
been unable to locate any other U.S. port in which Customs
officers regulate export documents in the same manner or with the
same penalties as in Jacksonville.
The record also contains a letter from Pan Atlantic, a
consolidator and NVOCC serving the island of Bermuda. It states
that as a consolidator it receives commodities from a variety of
companies for individual consignees. When a sufficient quantity
is collected, the commodities are delivered to NFS. As a
consolidator, Pan Atlantic states that it is required to provide
an SED to Customs for each supplier, although title transfers at
its loading dock making the importer in Bermuda a shipper and a
consignee. As an NVOCC, Pan Atlantic receives commodities from
suppliers in less than container load lots for consignees. As an
NVOCC, Pan Atlantic is required to present a copy of its BOL, as
well as an SED for each shipment. In both instances, Pan
Atlantic is expected to provide an original commercial invoice.
At Port Elizabeth in New Jersey, Pan Atlantic alleges that
this paperwork is not required for shipments going to Bermuda.
As a consolidator, Pan Atlantic may show the consignee as the
shipper on the SED with a general description of the contents.
As an NVOCC, Pan Atlantic shows itself as the shipper on the SED,
and the BOL provides the number of packages, weight, etc., using
the description "freight all kinds." The commercial invoices are
not required.
ISSUES:
For the sake of clarity, we reiterate the questions
presented to us:
I. A foreign entity can be listed as the exporter on a
Shipper's Export Declaration when that foreign entity has
purchased the shipped goods in the United States, even if the
exporter is shipping the goods to itself in a foreign country.
II. A foreign entity can be listed as the shipper on a Cargo
Declaration Outward with Commercial Forms (Form 1302-A) and the
accompanying bills of lading when that foreign entity has
purchased the shipped goods in the United States, even if the
shipper is shipping the goods to itself in a foreign country.
III. The entity listed as the shipper on the Cargo Declaration
Outward with Commercial Forms and the accompanying bills of
lading need not be the same entity listed as the exporter on the
Shipper's Export Declaration.
IV. Export shipments to Puerto Rico and other foreign
destinations require the same documentation, including Shipper's
Export Declarations and Cargo Declaration Outward with Commercial
Forms, completed to the same standards, as NFS shipments to
foreign countries.
V. Customs officers in Jacksonville cannot arbitrarily and
capriciously interpret and enforce Customs' rules and
regulations; Customs' rules and regulations must be interpreted
and enforced in a uniform manner throughout the United States.
LAW AND ANALYSIS:
I. A foreign entity can be listed as the exporter on a
Shipper's Export Declaration when that foreign entity has
purchased the shipped goods in the United States, even if the
exporter is shipping the goods to itself in a foreign country.
Title 13, United States Code, Section 303, states in
pertinent part that "to assist the Secretary (of Commerce) to
carry out the provisions of this chapter" (i.e., the collection
and publication of foreign commerce and trade statistics), "the
Secretary of the Treasury shall collect information in the manner
prescribed by the regulations issued pursuant to this chapter
from persons engaged in foreign commerce or trade...and from the
owners or operators of carriers." Section 30.1(a) of the Foreign
Trade Statistics Regulations {15 CFR 30.1(a)} provides for the
filing of SEDs by exporters for all commodities shipped from the
United States to a foreign country unless specifically exempted.
The information taken from the SED is the source of statistical
information that appears in the Bureau of the Census monthly
foreign trade report entitled "U.S. Exports: Commodity by
Country."
Shipper's Export Declarations are also required under the
Export Administration Regulations enforced in part by the Customs
Service for the Bureau of Export Administration, Department of
Commerce pursuant to 50 U.S.C. App. 2411. Specifically 15 CFR
786.3(b) states that an SED is an export control document which
indicates the existence of a validated export license or
permission for an export under an applicable general license.
NFS alleges that neither the Customs or Foreign Trade
statutes or regulations prohibit the naming of a foreign entity
as the exporter on an SED when the foreign entity is shipping its
commodities under a general license. Particularly, NFS notes
that 15 CFR 30.7(d)(2) expressly provides for the naming of a
foreign entity as exporter: "If neither an Internal Revenue
service EIN nor an SSN has been assigned, for example, in case of
a foreign entity as the exporter, the EIN or SSN reporting
requirement does not apply." Therefore, NFS alleges that
prohibiting the naming of a foreign entity as exporter would make
this section of the regulations meaningless.
Furthermore, 15 CFR 30.4(a) states in pertinent part that
"[i]n every event the data required in the Shipper's Export
Declaration shall be complete and correct and shall be based on
personal knowledge of the facts stated, or on invoices or
information furnished by the principal." NFS alleges that if the
foreign principal or its agent knows or has information showing
that the foreign principal is the exporter, it is obligated to
report that fact on the SED. Moreover, a principal often
furnishes NFS a document or bill of lading showing a foreign
entity as the exporter. Prohibiting the exporter from honestly
reporting itself as the exporter would force it to perjure itself
and violate the statute. NFS reasons that because the Bermuda
entity purchases commodities from U.S. manufacturers, title
transfers in the United States, and because the Bermuda entity
arranges for shipment to itself, it should be shown as the
exporter/shipper.
Section 30.7(d), Foreign Trade Statistics Regulations {15
CFR 30.7(d)} states that the exporter named on the SED, in
general, shall be the principal or seller in the export
transaction. For exports moving under a validated license, the
exporter named on the SED shall be the licensee named on the
validated export license. Looking at section 772.3(b)(1)(ii),
Export Administration Regulations {15 CFR 772.3(b)(1)(ii)}, it
states that the application for an export license "may be made
only by a person subject to the jurisdiction of the United States
who is in fact the exporter, or by his duly authorized agent. An
application may be made on behalf of a person not subject to the
jurisdiction of the United States by an authorized agent in the
United States, who then becomes the applicant." Furthermore, 15
CFR 772.3(b)(1)(i) states that for this purpose the identity of
the applicant and his role in the transaction, and not the "terms
of sale" are of primary concern.
The issue here does not pertain to commodities exported
under a validated export license but under a general license for
which no application must be made. A general license is
generally available for use by all persons. 15 CFR 770.2. A
person is defined as an individual, corporation, partnership,
association, company, or any other kind of organization,
situated, residing, or doing business in the United States or any
foreign country, including any government or agency thereof, as
well as a citizen or national of the United States or any foreign
country. 15 CFR 770.2. Therefore, it appears that a foreign
entity may export commodities under a general license.
We acknowledge that section 30.7(d)(2), Foreign Trade
Statistics Regulations {15 CFR 30.7(d)(2)} does provide for a
foreign entity as exporter on the SED; however, this would likely
occur in instances where foreign commodities are transitting the
United States. Therefore, while the regulations do provide for a
foreign entity as an exporter, both the Foreign Trade Statistics
Regulations and Export Administration Regulations make numerous
references for the preparation and filing of the SED by an
authorized agent, which implies for export control purposes that
if the shipper, owner, or consignor (the person who, pursuant to
15 CFR 30.4(a) shall prepare and sign the SED) is not present in
the United States at the time of export and therefore not subject
to the jurisdiction of the United States, an authorized agent,
who is present in the U.S. to facilitate the export of the
commodities, should be shown on the SED rather than a foreign
entity. Sections 786.3(e)(1) and (2), Export Administration
Regulations {15 CFR 786.3(e)(1) and (2)}, state that a
"forwarding agent" is a person authorized by an exporter to
perform for the exporter actual services which facilitate the
export of the commodities described in the SED, and that unless
the exporter states otherwise in the power of attorney, the
forwarding agent named by the exporter shall be deemed the true
agent of the exporter for export control and customs purposes.
FTSR Letters 151 and 152 clarify the regulations by stating
that "when the actual exporter is not subject to the jurisdiction
of the United States, i.e., a foreign exporter, the authorized
agent in the United States should appear as exporter and show his
or her (the authorized agent's) Internal Revenue service Employer
Identification Number on the Shipper's Export Declaration." As
to NFS's claim that FTSR Letters 151 and 152 are contrary to the
statutes and regulations, Customs is not in the position to
interpret the legality of ruling letters issued by other federal
agencies; consequently, any concerns regarding this matter should
be addressed to the Bureau of the Census. However, we do point
out that in preparing and filing export declarations, the shipper
must comply with all pertinent export control regulations as well
as the foreign trade statistics regulations. 15 CFR 30.2. A
"law or regulation relating to export control" is defined in 15
CFR 770.2 as a "statute, proclamation, executive order,
regulation, rule, license, or order applicable to any conduct
involving an export transaction."
Consequently, Customs may accept SEDs with the Bermuda
entity shown as the exporter if it is present in the United
States at the time the CMV SOMERS ISLES departs from the United
States (i.e., and is therefore subject to the jurisdiction of the
United States even though no EIN or SSN is provided). If the
Bermuda entity is not present in the United States when the CMV
SOMERS ISLES departs from the United States, its duly authorized
agent that is responsible for effecting the export (i.e., freight
forwarder) shall be shown as the exporter on the SED.
The U.S. Customs Service also has an interest in assuring
that the exporter named on the SED is subject to the jurisdiction
of the United States because "when cargo is loaded on a
commercial vessel for export at a port...the exporter of that
cargo (the name that appears on the SED) is liable for the
payment of the port use fee at the time of loading." 19 C.F.R.
24.24(e)(2).
II. A foreign entity can be listed as the shipper on a Cargo
Declaration Outward with Commercial Forms and the accompanying
bills of lading when that foreign entity has purchased the
shipped goods in the United States, even if the shipper is
shipping the goods to itself in a foreign country.
The U.S. Customs Service is empowered to collect a ship's
manifest and other commercial documents relating to outward-
bound cargo by 46 U.S.C. App. 91, implemented in part by 19 CFR
4.63. NFS alleges that neither the statutes or regulations
prohibit the naming of a foreign entity as the shipper on any
form or commercial document relating to the ship's manifest.
Title 46, United States Code Appendix, section 93(b) states
in pertinent part:
The following information shall be included on such
manifest, or on attached copies of bills of lading or
equivalent commercial documents.
(1) Name and address of shipper.
(2) Description of the cargo.
(3) Number of packages and gross weight.
(4) Name of vessel or carrier.
(5) Port of exit.
(6) Port of destination.
NFS states that 19 CFR 4.63(c), which lists the information
required on the Cargo Declaration Outward with Commercial Forms,
(Customs Form 1302-A), elaborates on four of these six items but
does not modify or restrict the requirements of "(1) Name and
address of shipper." Furthermore, NFS states that Customs in
Jacksonville has no authority to elaborate, modify, or restrict
the parameters surrounding the requirements of the name and
address of the shipper.
While the Customs Regulations do not elaborate on the term
"shipper", in Louis Rosenfield v. United States, 18 CCPA 146,
T.D. 44361 (1930), a regulation was discussed which required a
certificate from the "foreign seller or shipper." The United
States Customs Court and the United States Court of Customs and
Patent Appeals held that "shipper" is construed "not to include
one having no more interest in or knowledge of the merchandise
than merely that involved in the physical function of placing
together, packing, and starting the same in transit." It was
determined that the shipper ordinarily would be the seller, the
purchaser, or an agent for the seller or buyer who made the sale
or purchase. In any event, it was stated that the declaration by
one competent to declare the value and facts of the invoice would
be accepted.
We also note that section 580.3(t) of the Federal Maritime
Regulations {46 CFR 580.3(t)}, provides that a "shipper" is an
"owner or person for whose account the ocean transportation of
cargo is provided or the person to whom delivery is to be made."
We therefore conclude that a shipper may be a foreign entity if
that entity has knowledge of the value and facts of the invoices
in question, and which is provided on Form 1302-A or on the
attached BOLs.
III. The entity listed as the shipper on the Cargo Declaration
Outward with Commercial Forms and the accompanying bills of
lading need not be the same entity listed as the exporter on the
Shipper's Export Declaration.
NFS states that the SED is a document expressly prepared for
the Bureau of the Census, Department of Commerce. After
submitting the SED, neither the exporter nor any other principal
in the commercial chain possesses or utilizes this document. On
the other hand, NFS states that the BOL accompanying the Form
1302-A are not expressly prepared for the Customs Service. A BOL
is an internationally recognized and utilized document. It is
owned by the shipper, not the Customs Service, and is used and
relied upon by many in the commercial chain. By mandating that a
potentially false and misleading "shipper" be included on a BOL
of lading, NFS alleges that the Customs Service improperly
interferes with the property and worldwide commerce of others.
Furthermore, the SED requires the name of the "exporter", and the
Form 1302-A requires the name of the "shipper." It is alleged
that an "exporter" and a "shipper" could be two different
entities.
The Export Administration Regulations specifically provide
that for any shipment under a validated export license, the SED
and the outbound bill of lading must be consistent. 15 CFR
786.4(b). The bill of lading is not consistent if it names as
shipper any person other than the licensee or his duly authorized
forwarding agent. The regulations do not discuss such
requirements for shipments made under a general license.
Returning to 46 U.S.C. App. 93(b), as discussed above, it
requires the name of the shipper on the manifest or on attached
BOLs. Therefore, the shipper named on the Form 1302-A and BOL
should be the same. A BOL is the contract of carriage and
receipt for commodities issued by the carrier to the shipper.
15 CFR 770.2. In evaluating who the shipper should be on the
BOL, it is important to define "freight forwarder" and "NVOCC."
A "freight forwarder", defined in 19 CFR 112.1(e), is one
who engages in the business of dispatching shipments on behalf of
other persons, for a consideration, in foreign or domestic
commerce between the United States or its territories, and
foreign countries, and of handling the formalities incident to
such shipment, and is authorized to operate as such by any agency
of the United States. An NVOCC, defined in 46 CFR 580.2(l), is
a common carrier that does not operate the vessels by which the
ocean transportation is provided and is a shipper in its
relationship with an ocean common carrier. An NVOCC acts as a
carrier in its relationship with its customer, and as a shipper
in its relationship with the carrier. The NVOCC has a BOL as a
carrier, and an ocean BOL as a shipper. A freight forwarder is
not responsible for the cargo but only completes the required
paperwork. The main difference, therefore, is liability. These
characteristics were acknowledged in Chicago, Milwaukee, St. Paul
and Pac. R. Co. v. Acme Fast Freight, Inc., 336 U.S. 465, 484.
(See also Customs Ruling 215974, dated September 13, 1983.)
Therefore, it is possible to envision a situation where the
Bermuda entity, who has title to the commodities in the United
States and therefore has knowledge concerning the pertinent facts
of the invoices (as discussed above, is required), is the
shipper, while the freight forwarder, as an authorized agent, is
shown as the exporter on the SED since the Bermuda entity is not
present in the United States at the time of export. It also may
be possible that the Bermuda entity, as the principal in the
export transaction, is the exporter while the NVOCC is shown as
the shipper on the BOL in its relationship with the carrier.
However, we reiterate that the listed shipper should have
knowledge as to the shipments contents, which does not seem to be
satisfied when Pan Atlantic, as an NVOCC, merely presents a BOL
with a description "freight all kinds."
IV. Export shipments to Puerto Rico and other foreign
destinations require the same documentation, including Shipper's
Export Declarations and Cargo Declaration Outward with Commercial
Forms, completed to the same standards, as NFS shipments to
foreign countries.
NFS claims that shipments to Puerto Rico should be handled
in the same manner as NFS shipments to other foreign countries
and that the enforcement of the requirements should be applied
consistently among all shippers in the Jacksonville area.
Section 30.1(a)(2)(i), Foreign Trade Statistics Regulations
{15 CFR 30.1(a)(2)(i)} expressly requires that shipments to
Puerto Rico from the United States be accompanied by SEDs.
Section 30.20(a), Foreign Trade Statistics Regulations {15 CFR
30.20(a)}, provides that carriers transporting merchandise
between Puerto Rico and the United States shall not depart until
manifests (for vessels, aircraft, and rail carriers) and SEDs
have been filed with the Customs Director. Similarly section
4.84(c), Customs Regulations {19 CFR 4.84(c)}, provides, in
pertinent part:
A vessel...transporting merchandise from a port in any
State or the District of Columbia to any non-contiguous
territory of the United States (including Puerto Rico),
...shall not be permitted to depart without filing a
complete manifest, when required by regulations of the
Bureau of the Census (15 CFR part 30), and all required
shipper's export declarations, unless before the vessel
departs an approved bond is filed for the timely
production of the required documents, as specified in
15 CFR 30.24....
Referring to section 30.24(a) of the Foreign Trade Statistics
Regulations {15 CFR 30.24(a)}, it provides that the Customs
Director may permit a carrier to depart prior to the filing of a
complete manifest and all required SEDs, provided a bond is on
file with Customs, the condition of which is that a complete
manifest and all required SEDs shall be filed not later than (in
the case of Puerto Rico) the seventh business day after
departure.
Therefore, we conclude that according to the regulations,
for shipments between the United States and Puerto Rico, before
departure the master is required to file manifests and SEDs
unless a bond is on file with Customs. However, 15 CFR 30.40
also provides that subject to the Customs Director's approval,
shipper's may file one SED for all shipments laden on one vessel
going to Puerto Rico, so that whether or not such shipments are
made to one or several consignees, no consignee information is
required.
V. Customs officers in Jacksonville cannot arbitrarily and
capriciously interpret and enforce Customs' rules and
regulations; Customs' rules and regulations must be interpreted
and enforced in a uniform manner throughout the United States.
NFS alleges that Customs in Jacksonville acts in an
arbitrary and capricious manner when the rules and regulations
are interpreted and enforced differently from all other Customs
offices. "Administrative agencies must execute the law committed
to them fairly and honestly and treat everyone alike according to
the standards and rules of action prescribed." 2 Am. Jur. 2d
Admin. Law 193. NFS claims that shippers in the Jacksonville
area are treated differently than shippers in other domestic
ports and as a result of Jacksonville's selective enforcement,
NFS's clients could choose another port from which to export,
causing NFS and SISL to terminate operations. NFS alleges that
the instant case is an "especially egregious example of unbridled
power in that one sole branch officer can arbitrarily and
capriciously interpret the regulations differently than any other
officer in the system and then enforce them against selective
shippers, causing them irreparable harm."
NFS cites Title 46, United States Code Appendix, section 91
which provides in part:
The master or person having the charge or
command of any vessel bound to a foreign port
shall deliver to the collector of the
district from which said vessel is about to
depart a manifest of all the cargo on board
the same, and the value thereof, by him
subscribed, and shall swear to the truth
thereof; whereupon the collector shall grant
a clearance for such vessel and her cargo....
NFS states that the use of the word "shall" gives rise to
the presumption that the collector (responsible Customs officer)
has no discretion in the granting of clearance once the sworn
manifest has been presented. NFS claims that having complied
with the conditions entitling it to clearance by the explicit
wording of 46 U.S.C. App. 91 (i.e., (1) Name and address of
shipper), Customs has the duty to grant clearance.
NFS cites Hendricks v. Gonzalez, 67 F. 351, 353, 14 C.C.A.
659 (2d Cir. 1895), to show that the granting of clearance is
mandatory unless some other statutory authority justifies the
withholding of clearance. In Hendricks, the United States
Circuit Court of Appeals stated:
The plaintiff having complied with the conditions
entitling him to clearance by the law of Congress (Rev.
St. 4197 [46 U.S.C. App. 91]), it was the duty of the
defendant, as collector of the port, to grant a
clearance for the vessel and her cargo, unless he was
justified in refusing to do so by some other statutory
authority. Neither the secretary of the treasury nor
the president could nullify the statute, and, though
the defendant may have thought himself bound to obey
the instructions of the former, his mistaken sense of
duty could not justify his refusal of the clearance,
and these instructions afforded him no protection
unless they were authorized by law.
Id. at 353. NFS argues that no other statutory or regulatory
authority justifies that only a domestic entity may be listed as
the shipper, and that neither a FTSR Letter nor a directive from
an employee of the Bureau of the Census concerning a completely
different document (the SED) can nullify the statute or CFR
regulations.
In Hendricks, the statute in question (i.e., the neutrality
law), authorizing the detention of a vessel, was rather specific,
unlike the statutes and regulations (discussed below) which
provide Customs with authority in the instant case. Furthermore,
whether the collector had reasonable cause to refuse clearance
was determined to be a question of fact; although it was also
determined that as a matter of law the evidence did not sustain a
finding of probable cause because all of the statute's elements
were not present.
NFS also cites FTC v. Universal-Rundle, 387 U.S. 244, 251
(1967) [hereinafter FTC], where the United States Supreme Court
stated that an agency "does not have unbridled power to institute
proceedings which will arbitrarily destroy one of many law
violators in an industry." We note that the Supreme Court also
stated, whether an allegedly illegal practice reflects fact is a
question "that call[s] for discretionary determination by the
administrative agency." Id. at 250, quoting Moog Industries v.
Federal Trade Commission, 355 U.S. 414, 413. Thus, it was held
that it was not within the scope of the Seventh Circuit Court of
Appeals to overthrow the Commissions determination because the
determination was based upon reasonable evaluation. 387 U.S. at
252.
Two Attorneys General cases are also cited that state that a
ship has an absolute right to clear port unless the ship is
categorically violating the express terms of a statute:
...provision (of this section) that the collector shall
grant a clearance for the vessel and cargo is
mandatory...provided all statutory provisions have been
complied with and the papers presented...are regular
and legal upon their face, and provided...that the
vessel is not burdened with a lien in favor of the
United States.
34 Op. Att'y Gen. 244 (1923). We note that the Attorney General
also found sufficient statutory ground for refusing clearance,
and that by not enforcing the penalty, if the vessel were of
foreign registry it may never return to the jurisdiction of the
United States.
The second Attorney General case NFS cites, states:
(Congress did not intend clearance to depend merely on
the opinion or discretion of the collector and this
section requires the collector to grant clearance
unless he has some distinct statutory authority for
refusing as Congress has specifically provided for
refusing clearance in cases where it thought such a
course proper.)
29 Op. Att'y Gen. 364 (1912). However, we point out that the
statute disallowed seizure unless the owner or master was
consenting to the illegal act. In the case under consideration,
Customs is provided with ample authority to enforce the Foreign
Trade Statistics and Export Administration Statutes and
Regulations.
Clearance furnishes a record of cargo moving outward for
statistical purposes and also provides a control over departure
of carriers to insure compliance with navigation laws. Customs
Ruling 101796, dated September 26, 1975. We believe Customs has
the authority to verify the outward foreign manifest (i.e., Form
1302-A and SED) in accordance with 19 U.S.C. 1581(a), which
grants Customs officers the authority to go aboard a carrier to
"examine the manifest and other documents and papers and examine,
inspect, and search" the vessel. If it appears "that a breach of
the laws of the United States is being or has been committed",
the carrier is subject to seizure. 19 U.S.C. 1581(e). Under 46
U.S.C. App. 91 if the master of a vessel delivers a false
manifest or fails to deliver a manifest, he is liable to a
penalty of not more than $1,000 or less than $500, and the vessel
may be detained in any port of the United States until the
penalty is paid or secured.
Furthermore, section 30.11, Foreign Trade Statistics
Regulations (15 CFR 30.11) authorizes Customs, for purposes of
verifying the completeness and accuracy of the information
reported as required under 30.7 and 30.8, and for other
purposes under the regulations in part 30,
...to require the owners and operators of exporting
carriers, as well as the exporters or their agents...at
the time of exportation...to produce for inspection or
copying shipping documents, invoices, orders, packing
lists, correspondence, as well as any other relevant
documents and to furnish other information bearing upon
a particular exportation....
Section 786.8(b) of the Export Administration Regulations
{15 CFR 786.8(b)} authorizes Customs to take the following types
of action, among others (emphasis added): (1) Examine
commodities; (2) Inspect documents; (3) Question individuals; (4)
Prohibit lading (i.e., the customs office is authorized to
prevent the lading of commodities or technical data on an
exporting carrier whenever the customs office has reasonable
cause to believe that the export or removal from the United
States is contrary to the Export Administration Regulations); (5)
Inspect exporting carrier; (6) Seize and detain any commodities
or technical data whenever an attempt is made to export them in
violation of the Export Administration Regulations, or when it
knows or has probable cause to believe....; (7) Prevent departure
of carrier (i.e., the customs office is authorized under Title 22
of the United States Code, section 401, et seq., to seize and
detain, either before or after clearance, any vessel...which has
been or is being used in exporting or attempting to export any
commodity or technical data intended to be, being, or having been
exported in violation of the Export Administration regulations);
(8) Order the unloading (i.e., the customs office is authorized
to unload, or to order the unloading of commodities or technical
data from any exporting carrier, whenever the customs office has
reasonable cause to believe such commodities or technical data
are intended to be, or are being, exported or removed from the
United States contrary to the Export Administration Regulations);
(9) Order the return of commodities; (10) Designate time and
place for clearance.
Since the various statutes and regulations, detailed above,
refer to the "appear[ance]", "reasonable cause", and "probable
cause", we also find that the determination whether or not to
grant clearance is a question of fact. In Hendricks the statute
was more specific than those at hand; therefore, we conclude that
based upon the facts before us, Customs in Jacksonville did not
act "patently arbitrary or capricious." FTC at 250.
Furthermore, in authorizing Customs to inspect various
documents, pursuant to 15 CFR 30.11,
Customs shall refuse to accept Shipper's Export
Declarations containing known errors and omissions, and
may require their correction, but acceptance by the
Customs Director shall not be construed as evidence
that all requirements have been met, and such
acceptance shall not relieve the exporter of the
responsibility to furnish complete and correct
information at a later time if all requirements have in
fact not been properly met.
Therefore, although NFS claims that other ports do not subject
shipments to the same scrutiny as Jacksonville, this does not
necessarily suggest that all requirements were correctly met at
those ports.
HOLDING:
I. The exporter on a Shipper's Export Declaration may be a
foreign entity when the foreign entity has purchased the
commodities in the United States and is shipping them to itself
in a foreign country if, for export control purposes, it is
present in the United States at the time of export and therefore
subject to the jurisdiction of the United States. Otherwise, an
authorized agent, who is present in the U.S. to facilitate the
export of the commodities, should be shown on the SED.
II. A foreign entity can be listed as the shipper on a Cargo
Declaration Outward with Commercial Forms and the accompanying
bills of lading when that foreign entity has purchased the
shipped commodities in the United States and is shipping them to
itself in a foreign country, provided the foreign entity is
competent to declare the value and facts of the information on
the Form 1302-A and the accompanying bills of lading.
III. Although it is preferable that the entity listed as the
shipper on the Cargo Declaration Outward with Commercial Forms
and on the accompanying bills of lading is the same entity listed
as the exporter on the Shipper's Export Declaration, this is not
a mandatory requirement when commodities are exported under a
general license.
IV. According to the regulations, for shipments between the
United States and Puerto Rico, before departure the master is
required to file manifests and SEDs unless a bond is on file with
Customs.
V. Customs has ample authority to enforce the Foreign Trade
Statistics and Export Administration Statutes and Regulations,
and based on the facts Customs in Jacksonville did not act in an
arbitrary and capricious manner; further, although NFS shipments
were cleared without consequence at other U.S. ports, this does
not necessarily suggest all requirements were correctly met.
Sincerely,
Acting Chief
Carrier Rulings Branch