Intermodal Transportation; Vessel; Truck; 46 U.S.C. App. 883; 19 U.S.C. 1322

HQ 112001 February 19, 1992 VES-3-07/BOR-7-04-CO:R:IT:C 112001 GEV CATEGORY: Carriers Dot Ensminger Carrier Control Officer U.S. Customs Service Seattle, Washington 98174 RE: Intermodal Transportation; Vessel; Truck; 46 U.S.C. App. 883; 19 U.S.C. 1322 Dear Ms. Ensminger: This is in response to your memorandum dated November 26, 1991, regarding the assessment of a penalty for a possible violation of 46 U.S.C. App. 883 (the "Jones Act"). Our ruling on this matter is set forth below. FACTS: Foreign cargo is transshipped from one foreign-flag vessel to another foreign-flag vessel at a U.S. port. The foreign-flag vessel onto which the cargo has been transshipped then proceeds to Canada where the cargo is unladed and placed aboard a Canadian-based truck. This truck subsequently transports the cargo to Seattle, Washington. ISSUE: 1. Whether the intermodal transportation (vessel/truck) of cargo between United States points via Canada constitutes a violation of 46 U.S.C. App. 883 and/or 19 U.S.C. 1322. LAW AND ANALYSIS: Title 46, United States Code Appendix, section 883, provides in part that, "No merchandise shall be transported by water, or by land and water, on penalty of forfeiture of the merchandise (or a monetary amount up to the value thereof as determined by the Secretary of the Treasury, or the actual cost of the transportation, whichever is greater, to be recovered from any consignor, seller, owner, importer, consignee, agent, or other person or persons so transporting or causing said merchandise to - 2 - be transported) between points in the United States,...either directly or via a foreign port, or for any part of the transportation, in any other vessel than a vessel built in and documented under the laws of the United States and owned by persons who are citizens of the United States..." (emphasis added) Accordingly, although the statute provides numerous parties against whom a penalty for violating 46 U.S.C. App. 883 can be issued, in practice Customs assesses a monetary penalty against the owner of the violating vessel. Upon reviewing the above facts it is our opinion that a penalty should be assessed against the owner of the vessel upon which the cargo was transshipped which subsequently transported it from the U.S. to Canada. In regard to the truck used in the transportation in question, we note the following. Section 141.4, Customs Regulations (19 CFR 141.4), provides that entry as required by title 19, United States Code, 1484(a) (19 U.S.C. 1484(a)), shall be made of every importation whether free or dutiable and regardless of value, except for intangibles and articles specifically exempted by law or regulations from the requirements for entry. Since the foreign-based truck in question is not within the definition of intangibles as shown in General Note 4, Harmonized Tariff Schedule of the United States (HTSUS; 19 U.S.C. 1202, as amended), it is subject to entry and payment of any applicable duty if not specifically exempted by law and regulations. Instruments of international traffic may be entered without entry and payment of duty under the provisions of 19 U.S.C. 1322. To qualify as instruments of international traffic, trucks having their principal base of operations in a foreign country must be arriving in the United States with merchandise destined for points in the United States, or arriving empty or loaded for the purpose of taking merchandise out of the United States (see 19 CFR 123.14(a)). "Taking out" means destined to a foreign country and does not cover merchandise or passengers whose intended destination is a second point in the United States. We have held that the intermodal transportation of merchandise between two U.S. points is in violation of 19 U.S.C. 1322 and 19 CFR 123.14 inasmuch as the intent of that authority is to prevent the movement of merchandise between two U.S. points by either a single foreign-based carrier or a combination thereof. Accordingly, the Canadian-based truck which transported the cargo from Canada to Seattle should be assessed a penalty under 19 U.S.C. 1592 (referenced in 19 CFR 123.14(d)). - 3 - HOLDING: The intermodal transportation (vessel/truck) of foreign cargo between United States points via Canada constitutes a violation of 46 U.S.C. App. 883 and 19 U.S.C. 1322 with penalties to be assessed against the respective carriers. Sincerely, B. James Fritz Chief Carrier Rulings Branch