[Federal Register Volume 61, Number 194 (Friday, October 4, 1996)]
[Proposed Rules]
[Pages 51849-51851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25463]
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DEPARTMENT OF TRANSPORTATION
DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Part 10
RIN 1515-AB79
Use of Containers Designated as Instruments of International
Traffic in Point-to-Point Local Traffic
AGENCY: U.S. Customs Service, Department of the Treasury.
ACTION: Proposed rule.
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SUMMARY: This document proposes to amend the Customs Regulations to
provide that certain containers which are designated as instruments of
international traffic are deemed to remain in international traffic
provided they exit the United States within 365 days of the date on
which they are admitted to the U.S. For the importing community as well
as Customs, this proposal would greatly simplify the treatment of
containers for Customs purposes regardless of their use in domestic
commerce.
DATES: Comments must be received on or before December 3, 1996.
ADDRESSES: Written comments (preferably in triplicate) must be
submitted to the U.S. Customs Service, ATTN: Regulations Branch,
Franklin Court, 1301 Constitution Avenue, NW., Washington, D.C. 20229,
and may be inspected at the Regulations Branch, 1099 14th Street, NW.,
Suite 4000, Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Legal aspects: Glen E. Vereb, Entry and Carrier Rulings Branch,
(202-482-6940).
Operational aspects: Eileen A. Kastava, Cargo Control, (202-927-
0983).
SUPPLEMENTARY INFORMATION:
Background
Section 141.4, Customs Regulations (19 CFR 141.4), provides that
all merchandise imported into the United States is required to be
entered, unless specifically exempted. Section 141.4(b)(3) provides an
exception for instruments of international traffic as described, and
under the conditions provided for, in Sec. 10.41a, Customs Regulations
(19 CFR 10.41a).
Pursuant to 19 U.S.C. 1322, vehicles and other instruments of
international traffic shall be excepted from the application of the
Customs laws to such extent and subject to such terms and conditions as
may be prescribed in regulations or instructions of the Secretary of
the Treasury.
The Customs Regulations issued under the authority of 19 U.S.C.
1322 are contained in Sec. 10.41a. Section 10.41a(a)(1) designates as
instruments of international traffic lift vans, cargo vans, shipping
tanks, skids, pallets, caul boards, and cores for textile fabrics in
use or to be used in the shipment of merchandise in international
traffic.
Section 10.41a(a)(1) also authorizes the Commissioner of Customs to
designate as instruments of international traffic such additional
articles or classes of articles as he shall find should be so
designated. Instruments so designated may be released without entry or
the payment of duty, subject to the provisions of Sec. 10.41a.
Instruments so designated are also stated to be duty-free in subheading
9803.00.50, Harmonized Tariff Schedule of the United States.
Section 10.41a(d) provides that if an instrument of foreign origin
which has been increased in value or improved in condition by a process
of manufacture or other means while abroad is released under
Sec. 10.41a and is subsequently diverted to point-to-point local
traffic within the United States, or is otherwise withdrawn from its
use as an instrument of international traffic, it becomes subject to
entry and the payment of any applicable duties.
[[Page 51850]]
Nevertheless, Sec. 10.41a(f) states in effect that, except for the
application of the coastwise trade laws (see Sec. 4.93, Customs
Regulations (19 CFR 4.93)), no part of Sec. 10.41a precludes (1) the
use of an instrument in picking up and delivering loads at intervening
points in the United States while en route between the port of arrival
and the port of destination of its imported cargo, (2) the use of an
instrument while en route from such point of destination of imported
cargo to a point where export cargo is to be loaded or to an exterior
port of departure by a reasonably direct route to, or nearer to, the
place of such loading or departure, or (3) the use of a ``container''
as defined in the Customs Convention on Containers (together with its
normal accessories and equipment if imported therewith), when such
container arrives empty while en route between the port of arrival and
a point where export cargo is to be loaded or from that point to an
exterior port of departure by a reasonably direct route to, or nearer
to, the place of such loading or departure, provided that such point-
to-point traffic is incidental to the efficient and economical
utilization of the instrument in the course of its use in international
traffic.
Section 10.41a(f) also makes clear that none of the uses enumerated
above constitutes a diversion to unpermitted point-to-point local
traffic within the United States or a withdrawal of an instrument from
its use as an instrument of international traffic.
It is proposed to amend Sec. 10.41a(f) so as to apply only to
instruments of international traffic other than containers as defined
in the Customs Convention on Containers. Permitted domestic traffic in
containers which are instruments of international traffic would be
addressed in a proposed new Sec. 10.41a(g). Current paragraphs (g), (h)
and (i) of Sec. 10.41a would be redesignated as paragraphs (h), (i) and
(j), respectively.
The proposed new paragraph (g) of Sec. 10.41a would provide that
containers, as defined in Article 1 of the Customs Convention on
Containers (1972), are deemed to remain in international traffic
provided they exit the U.S. within 365 days of the date on which they
are admitted to the U.S. This would be so regardless of the fact that
the containers may engage in point-to-point local traffic within the
United States. An exit from the U.S., for purposes of this provision,
would be defined as a movement across the border of the United States
into a foreign country where either:
(1) All merchandise is unladen from the instrument of international
traffic; or
(2) Merchandise is laden aboard the instrument of international
traffic (if the instrument of international traffic is empty).
Furthermore, the person who filed the application for release under
Sec. 10.41a(a)(1) would be responsible for keeping and maintaining such
records as would be necessary to establish the international movements
of the instruments of international traffic. Such records would be
required to be made available for inspection by Customs officials.
Should the container not exit the U.S. within 365 days of the date
on which it was admitted under Sec. 10.41a, it would be considered to
have been removed from international traffic and entry for consumption
would have to be made within 10 business days after the end of the
month in which the container was deemed removed from international
traffic.
Should entry be required under Sec. 10.41a, all containers removed
from international traffic in the same month could be listed on one
entry. The entry could be made at any port of entry. Customs may waive
the invoice requirement at the time of entry and may use the value of
the instrument as carried on the books of the person making entry.
Thus, in brief, the key change contained in this proposal is to
allow a container (as defined in Article 1 of the Customs Convention on
Containers) to engage in point-to-point domestic traffic provided that
such container exits the U.S. within 365 days of the date on which it
was admitted to the United States under Sec. 10.41a. This proposal
would simplify the Customs treatment of containers for both the public
and Customs in that the more difficult-to-apply requirements set forth
in Sec. 10.41a(f) would no longer apply to containers.
Containers specially designed and equipped for carriage by one or
more modes of transport are duty-free under subheading 8609.00.00,
Harmonized Tariff Schedule of the United States. Therefore, Customs
expects little or no loss of revenue to the Government under this
proposal.
It is noted that the amendments proposed herein are principally the
result of written requests submitted by counsel on behalf of certain
carrier, leasing, shipping and container companies, and a meeting
occurring between the companies' representatives, their counsel and
Customs officials.
Comments
Before adopting the proposed amendments, consideration will be
given to any written comments that are timely submitted to Customs.
Comments submitted will be available for public inspection in
accordance with the Freedom of Information Act (5 U.S.C. 552),
Sec. 1.4, Treasury Department Regulations (31 CFR 1.4), and
Sec. 103.11(b), Customs Regulations (19 CFR 103.11(b)), on regular
business days between the hours of 9:00 a.m. and 4:30 p.m. at the
Regulations Branch, Franklin Court, 1099 14th Street, NW., Suite 4000,
Washington, D.C.
Regulatory Flexibility Act and Executive Order 12866
As explained in the preamble, the proposed amendments would
simplify the Customs treatment of containers for the importing public
in that the more difficult-to-apply requirements set forth in
Sec. 10.41a(f) would no longer apply to containers. As such, pursuant
to the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), it is certified that, if adopted, the proposed amendments will
not have a significant economic impact on a substantial number of small
entities. Accordingly, the proposed amendments are not subject to the
regulatory analysis or other requirements of 5 U.S.C. 603 or 604, nor
would they result in a ``significant regulatory action'' under E.O.
12866.
List of Subjects in 19 CFR Part 10
Alterations, Bonds, Customs duties and inspection, Exports,
Imports, Preference programs, Repairs, Reporting and recordkeeping
requirements, Trade agreements.
Proposed Amendments
It is proposed to amend part 10, Customs Regulations (19 CFR part
10), as set forth below.
PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE,
ETC.
1. The general authority for part 10 would be revised, and the
specific authority for Sec. 10.41a would continue, to read as follows:
Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized
Tariff Schedule of the United States (HTSUS)), 1321, 1481, 1484,
1498, 1508, 1623, 1624, 3314;
* * * * *
Sections 10.41, 10.41a, 10.107 also issued under 19 U.S.C. 1322;
* * * * *
2. It is proposed to amend Sec. 10.41a by revising paragraph (f) to
read as follows; by redesignating paragraphs (g), (h) and (i), as (h),
(i) and (j), respectively; and adding a new paragraph (g) to read as
follows:
[[Page 51851]]
Sec. 10.41a Lift vans, cargo vans, shipping tanks, skids, pallets, and
similar instruments of international traffic; repair components.
* * * * *
(f)(1) Except as provided in paragraph (j) of this section, an
instrument of international traffic may be used as follows in point-to-
point traffic, provided such traffic is incidental to the efficient and
economical utilization of the instrument in the course of its use in
international traffic:
(i) Picking up and delivering loads at intervening points in the
United States while en route between the port of arrival and the point
of destination of its imported cargo; or
(ii) Picking up and delivering loads at intervening points in the
United States while en route from the point of destination of imported
cargo to a point where export cargo is to be loaded or to an exterior
port of departure by a reasonably direct route to, or nearer to, the
place of such loading or departure.
(2) Neither use as enumerated in paragraph (f)(1)(i) or (ii) of
this section constitutes a diversion to unpermitted point-to-point
local traffic within the United States or a withdrawal of an instrument
in the United States from its use as an instrument of international
traffic under this section.
(g)(1) Except as provided in paragraph (j) of this section, a
container (as defined in Article 1 of the Customs Convention on
Containers) which is designated as an instrument of international
traffic is deemed to remain in international traffic provided that the
container exits the U.S. within 365 days of the date on which it was
admitted under this section. An exit from the U.S. in this context
means a movement across the border of the United States into a foreign
country where either:
(i) All merchandise is unladen from the container; or
(ii) Merchandise is laden aboard the container (if the container is
empty).
(2) The person who filed the application for release under
paragraph (a)(1) of this section is responsible for keeping and
maintaining such records as may be necessary to establish the
international movements of the containers. Such records shall be made
available for inspection by Customs officials upon reasonable notice.
(3) If the container does not exit the U.S. within 365 days of the
date on which it is admitted under this section, such container shall
be considered to have been removed from international traffic, and
entry for consumption must be made within 10 business days after the
end of the month in which the container is deemed removed from
international traffic. When entry is required under this section, any
containers considered removed from international traffic in the same
month may be listed on one entry. Such entry may be made at any port of
entry. Customs may waive the invoice requirement at the time of entry
and may use the value of the container as carried on the books of the
person making entry.
* * * * *
Dated: February 29, 1996.
George J. Weise,
Commissioner of Customs.
Dennis M. O'Connell,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 96-25463 Filed 10-3-96; 8:45 am]
BILLING CODE 4820-02-P
