Leased Canadian-registered automobile; Use in United States and Canada; Entry; 19 U.S.C. §§ 1322, 1484

HQ 115016 May 2, 2000 BOR-2-03-RR:IT:EC 115016 GEV CATEGORY: Carriers Timothy J. Toohey, Esq. Brownell House Professional Center 904 Center St., P.O. Box 732 Lewiston, New York 14092-0732 RE: Leased Canadian-registered automobile; Use in United States and Canada; Entry; 19 U.S.C. §§ 1322, 1484 Dear Mr. Toohey: This is in response to your letter dated March 29, 2000, on behalf of your client, regarding his use of a Canadian-registered automobile in the United States. Our ruling on this matter is set forth below. FACTS: Your client, a U.S. citizen living in New York, is an officer of a corporation that is incorporated in Canada. The corporation has an office and business in Canada but also has an office and business in New York and throughout the United States. The corporation leases a car in Canada that is registered in the Canadian province of Ontario. Your client, as well as several other employees of the corporation (including both U.S. and Canadian citizens), use the leased car on both sides of the border for business and personal use. Customs officials at the Port of Buffalo have told your client that when he crosses the border he cannot bring the car into the U.S. unless he imports it into the U.S. - 2 - ISSUE: Whether a Canadian-registered automobile leased in Canada by a Canadian corporation with offices in Canada and the U.S. and used by its U.S. and Canadian employees for business and personal use in both countries is subject to Customs entry and payment of applicable duty when crossing into the United States. LAW AND ANALYSIS: 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 articles specifically exempted by law or regulation from the requirements for entry. Since the automobile in question is not covered by the regulatory or statutory authority provided in § 141.4(b), Customs Regulations, which exempts certain articles from entry, it is subject to entry and payment of any applicable duty. Furthermore, § 10.41(d), Customs Regulations (19 CFR § 10.41(d)) provides additional authority that the automobile in question is subject to entry. That regulation provides, in pertinent part, that “Any foreign-owned vehicle…brought into the United States…as an element of a commercial transaction is subject to treatment as an importation of merchandise from a foreign country and a regular entry therefor shall be made.” Whether an article is used as “an element of a commercial transaction” depends upon the circumstances of each case, and the term thus is not susceptible of authoritative definition. Generally, the courts have defined a commercial activity, in its broadest sense, to include any type of business or activity which is carried on for profit. Caribbean Steamship Co., v. Le Societe Navale Caennaise, 140 F.Supp. 16, 21 (1956); Lanski v. Montealegre, 104 N.W.2d 772, 774 (1960). With respect to the Canadian-owned automobile under consideration, not only is it being brought into the United States while under a Canadian lease agreement, it is also being brought into this country in furtherance of the business of its Canadian corporate owner. Under these circumstances, it is readily apparent that the vehicle is being - 3 - brought into the United States as an “element of a commercial transaction” within the meaning of § 10.41(d) thereby necessitating the filing of an entry as provided therein. (See also 19 CFR § 123.15 which requires the entry of vehicles of foreign origin used for commercial purposes between adjoining communities of the United States and Canada or Mexico.) HOLDING: A Canadian-registered automobile leased in Canada by a Canadian corporation with offices in Canada and the U.S. and used by its U.S. and Canadian employees for business and personal use in both countries is subject to Customs entry and payment of applicable duty when crossing into the United States. Sincerely, Acting Chief Entry Procedures and Carriers Branch