Right to Make Entry; Entry by Nominal Consignee; Financial Interest; 19 U.S.C. 1484

HQ 115110 November 2, 2000 ENT-1-01-RR:IT:EC 115110 GG CATEGORY: Entry Peter S. Herrick, Esq. 3520 Crystal View Court Miami, Florida 33133 RE: Right to Make Entry; Entry by Nominal Consignee; Financial Interest; 19 U.S.C. 1484 Dear Mr. Herrick: This is in response to your letter, dated July 10, 2000, requesting a ruling on behalf of your client, General Cargo, Inc. FACTS: General Cargo, Inc. is a Florida corporation doing business in Miami, Florida. General Cargo, S.A. is a related corporation doing business in Bogota, Colombia. Both companies are air freight forwarders. General Cargo, S.A. arranges the shipment of flowers from growers in Colombia to the United States. It prepares the airway bill of lading as the issuing carrier’s agent. The grower is shown as the shipper, and General Cargo, Inc. is listed as the consignee in Miami. General Cargo, Inc., which has an IRS number and an unspecified type of Customs approved surety bond, will arrange for the inland and air transportation of the imported flowers to flower distributors either in the United States or in foreign destinations. General Cargo, Inc. will also designate the licensed Customs broker to enter the flowers in the United States. ISSUE: Whether General Cargo, Inc., has a sufficient financial interest to serve as importer of record on the flower entries. LAW AND ANALYSIS: Section 484(a)(1) of the Tariff Act of 1930, as amended (19 U.S.C. §1484(a)(1)) provides that only parties qualified as the “importer of record” may make entry. These qualified parties are identified in §484(b)(2)(B) as the owner or purchaser of the merchandise, or, when appropriately designated by the owner, purchaser, or consignee of the merchandise, a licensed customs broker. The terms “owner” and “purchaser” are defined in Customs Directive 3530-02, dated November 6, 1984, entitled “Right to Make Entry”, in the following manner: The terms “owner” or “purchaser” would be any party with a financial interest in a transaction, including, but not limited to, the actual owner of the goods, the actual purchaser of the goods, a buying or selling agent, a person or firm who imports on consignment, a person or firm who imports goods for repair or alteration or further fabrication, etc. Any such owner or purchaser may make entry on his own behalf or may designate a licensed customhouse broker to make entry on his behalf and may be shown as the importer of record on the CF 7501. The terms “owner” or “purchaser” would not include a “nominal consignee” who effectively possesses no other right, title, or interest in the goods except as he possessed under a bill of lading, air waybill, or other shipping document. Examples of nominal consignees not authorized to file Customs entries are courier services, freight consolidators who handle consolidated shipments as described in paragraph j. below, and customhouse brokers who are not licensed to transact customs business in Customs districts where a shipment is being entered. Emphasis added. Paragraph j. of the same directive, referred to in the quotation immediately above, provides: Where a freight consolidator acts as a consignee on behalf of an exporter to handle Customs matters on behalf of numerous U.S. purchasers, such freight forwarder is not the owner or purchaser of the goods and, therefore, does not have the right to make entry either with or without permission of the actual owner. Under the law, as the nominal consignee, the freight forwarder does have the right to designate a customhouse broker to make entry on his behalf. It is evident from the language in the directive that nominal consignees, such as freight forwarders, do not possess a sufficient financial interest in the goods to make entry. Customs has also taken this position in ruling letters. For example, HQ 114396, dated January 20, 1999, and HQ 223772, dated August 6, 1992, held that freight forwarders who arrange for the transportation, storage and delivery of imported merchandise are mere nominal consignees and are precluded from making entry. In our opinion General Cargo, Inc.’s role in these transactions is the same. Therefore, it may not be named as importer of record on either the entries or entry summaries of the imported flowers. Although General Cargo, Inc. may not be listed as the importer of record in these transactions, it may appoint a licensed broker to file the entries. This appointment power is derived from the previously cited §484(b)(2)(B), which confers on consignees the right to designate a broker to make entry. It is well established that nominal consignees such as freight forwarders count as consignees for purposes of the entry statute. See National Customs Brokers and Forwarders Association v. United States, 14 CIT 108, 731 F. Supp. 1076 (1990); and J.F.K. Customs Brokers v. United States, 745 F. Supp. 113 (E.D.N.Y. 1990). The broker appointed by a consignee to make entry must serve as the importer of record on both the entry and the entry summary. See paragraph b. of the Right to Make Entry Directive, and HQ’s 114396 and 223772, supra, and HQ 224574, dated November 18, 1993. HOLDING: General Cargo, Inc., in its capacity as freight forwarder of the merchandise, does not have a sufficient financial interest in the imported flowers to be considered an owner or purchaser for purposes of making entry. However, as nominal consignee it may appoint a licensed broker to file the entries. The broker will be required to serve as importer of record under these circumstances. Sincerely, Larry L. Burton Chief Entry Procedures and Carriers Branch