HQ 111669: Instruments of International Traffic; Canadian-based Trucks; 19 U.S.C. 1322

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 111669

                          June 6, 1991

BOR-7-04-CO:R:IT:C 111669 GEV

CATEGORY:  Carriers

William H. Shawn, Esq.
Shawn, Berger & Mann
1850 M Street, N.W. 
Washington, D.C. 20036

RE:  Instruments of International Traffic; Canadian-based Trucks;
     19 U.S.C. 1322

Dear Mr. Shawn:

     This is in response to your letter dated April 29, 1991, on
behalf of your client, Tippet-Richardson Limited, requesting a
ruling regarding the proposed use of Canadian-based trucks in the
United States.  Our ruling is set forth below.

FACTS:

     Tippet-Richardson Limited ("Tippet-Richardson") is a
Canadian-based motor contract carrier operating in the United
States under the Interstate Commerce Commission authority of
Allied Van Lines, Naperville, Illinois.  It conducts scheduled
and non-scheduled trips between the United States and Canada.

     Tippet-Richardson operates a weekly "West Coast Schedule
Run" on a set route from Toronto, Ontario, Canada to Tustin,
California.  The route originates in Toronto and loads/unloads in
Calgary, Alberta; Kamloops, British Columbia; Vancouver, British
Columbia and ultimately unloads in Tustin, California.  This
operation is conducted with specifically-designated drivers and
equipment.  Furthermore, the operation is run on a fixed weekly
schedule over a designated route regardless of any load
variations.

     Tippet-Richardson proposes to add several United States
stops on the Toronto-Tustin route.  Specifically, it proposes to
transport merchandise in local traffic on both the inbound and
return trips between Seattle, Washington, Portland, Oregon, the
San Francisco Bay Area, Fremont, California, and Tustin.  - 2 -

ISSUE:

     Whether there is a movement in local traffic in violation of
19 CFR 123.14(c)(1) when a Canadian-based tractor-trailer unit
operating in international traffic on a weekly schedule between
Toronto, Ontario, Canada and Tustin, California, transports
merchandise on both the inbound and return trips between Seattle,
Washington, Portland, Oregon, the San Francisco Bay Area,
Fremont, California, and Tustin.

LAW AND ANALYSIS:

     Section 141.4, Customs Regulations (19 CFR 141.4), provides
that entry as required by title 19, United States Code, section
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 equipment 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), they are 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)).

     A foreign truck tractor which arrives in the United States
in international traffic towing a foreign trailer, either empty 
or loaded, constitutes a foreign "truck" as that term is used in
sections 123.14(a), (b), and (c)(1), Customs Regulations (19 CFR
123.14(a), (b), and (c)(1)).

     Section 123.14(c), Customs Regulations, states that with one
exception, a foreign-based truck, admitted as an instrument of
international traffic under section 123.14, shall not engage in
local traffic in the United States.  The exception, set out in
section 123.14(c)(1), states that such a vehicle, while in use on
a regularly scheduled trip, may be used in local traffic that is
directly incidental to the international schedule.

     A carrier may be considered as engaged in regularly
scheduled service whether trips are scheduled hourly, daily,  - 3 -

weekly, etc., provided the trips are regular, not varied, and are
over an established route.  Trips made if and when a load is
available do not qualify.

     Section 123.14(c)(2), Customs Regulations (19 CFR
123.14(c)(2)), provides that a foreign-based truck trailer
admitted as an instrument of international traffic may carry
merchandise between points in the United States on the return
trip as provided by section 123.12(a)(2) which allows use for
such transportation as is directly incidental to its economical
and prompt return to the country from which it entered the United
States.  Section 123.14(c)(2) applies only to trailers and not to
tractor-trailer units which, as was stated earlier, are
considered trucks as that term is used in the Customs
Regulations.

     Section 10.41(d), Customs Regulations provides, in part,
that any foreign-owned vehicle brought into the United States for
the purpose of carrying merchandise between points in the United
States for hire or as an element of a commercial transaction,
except as provided for in section 123.14(c), is subject to
treatment as an importation of merchandise from a foreign country
and a regular Customs entry therefore shall be made.  Section
123.14(d), Customs Regulations provides that any vehicle used in
violation of section 123.14, is subject to forfeiture under
section 592, Tariff Act of 1930, as amended (19 U.S.C. 1592).

     Whether the use of an instrument of international traffic
constitutes a diversion from international traffic is based on
the facts in each case.  The transportation of merchandise in
international traffic is the key; the domestic movement of 
merchandise must be secondary to the international movement and
meet other criteria.  There must be a regular international
schedule and the domestic movement must follow the same basic
route as the merchandise moving in international traffic.

     It should be noted that the aforementioned ICC authority -
and the applicable Customs Regulations are easily reconciled.  The
former authorizes a carrier to transport general commodities or
passengers between points in the United States, while the latter
applies the statutory requirements that govern such movements.

     In regard to the proposed domestic transportation, we note
that although it would appear to occur pursuant to regularly
scheduled international trips, it cannot be said to be directly
incidental to the international schedule.  Specifically, the
record does not support a finding that the domestic movements
between three of the United States points in question (Seattle,
Portland, and Tustin) and the San Francisco Bay Area (a non-
specific destination) and Fremont follow the same basic route as
                              - 4 -

the merchandise moving in international traffic (Canada-Tustin). 
Accordingly, these movements are local traffic not within the
permitted exception set forth in section 123.14(c)(1).

HOLDING:

     There is a movement in local traffic in violation of 19 CFR
123.14(c)(1) when a Canadian-based tractor-trailer unit
transporting merchandise in international traffic on a weekly
schedule between Toronto, Ontario, Canada and Tustin, California
transports merchandise between Seattle, Washington, Portland,
Oregon, the San Francisco Bay Area, Fremont, California and
Tustin. 

                              Sincerely,




                              B. James Fritz
                              Chief
                              Carrier Rulings Branch