HQ 223354: Internal Advice; File - ENF 4-DD:FPF ah, x 91-1512-20150; Formal Receipt of Cargo

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 223354
                        January 27, 1992

TRA-6/WAR-2-01/BON-1-02
CO:R:C:E  223354  DHS

CATEGORY: BONDS

District Director of Customs
Wilmington, NC 28401

RE:  Internal Advice; File - ENF 4-DD:FPF ah,
     x 91-1512-20150; Formal Receipt of Cargo  

Dear Sir:

     This is in reference to your memorandum dated July 26, 1991,
inquiring about the procedure for satisfying the "formal receipt"
requirement under 19 CFR 19.44(a).  

FACTS:

     On March 4, 1991, upon arrival at JFK Airport the
merchandise in question, consolidated in an airfreight container,
was transported under a Transportation Entry Bond, by
Transcontinental Freight Systems (TFS), to the District Director
of Customs in Charlotte, North Carolina.  Four airfreight
containers including the one in question were delivered by TFS to
a container freight station (CFS) operated by American EMO Trans,
Inc. (EMO).  The warehouse manager for EMO, acknowledged the
receipt of the merchandise by signing the bill of lading.  No
other documentary evidence of the receipt of the merchandise is
maintained by the CFS.  On March 7, 1991, the merchandise was
released from the CFS operator, by one of its agents, for
delivery to the consignee, prior to obtaining a proper release
from the district director of Customs. 

     A Notice of Redelivery (CF 4647) was sent to the consignee
on March 22, 1991.  The consignee failed to redeliver the
merchandise. 

     A liquidated damages case was issued by your office to EMO
for violation of 19 CFR 19.44 and 19 CFR 113.63 for improper
release to the consignee. 
     
     The protestant, CFS operator, contends that the bonded
carrier remains liable under its bond for the improper delivery
of the merchandise to the consignee since EMO, the CFS operator,
never formally receipted for the merchandise by placing its
signature on the application to transfer.

     Your office asserts that the signature of the employee, as
an authorized agent of the CFS, on the bill of lading is
sufficient to satisfy the "formal receipt" requirement.

ISSUE:

     Is a signature of an authorized agent of a container freight
station on a bill of lading sufficient to satisfy the "formal
receipt" requirement under 19 CFR 19.44(a)?
 
LAW AND ANALYSIS:

     A container station is a secured area within the United
States into which containers of merchandise may be moved for the
purpose of opening the containers and delivering the contents
before any entry is filed with Customs or duty is paid.  A
container station is important because it serves as a central
location for processing containerized merchandise which otherwise
may not be handled timely at the dock, wharf, pier or bonded
carrier's terminal.

     Over the years, Customs has revised procedures to
accommodate the changing environment and demands resulting from
an increased flow of merchandise and pressures to facilitate
movement at the port of entry.  For example, T.D. 71-39,
prescribed security measures for the protection of cargo in
unlading areas.  Proof of compliance with these measures was a
prerequisite for a carrier to obtain a permit to unlade.  T.D.
72-68 made these security provisions applicable to independent
container station operators.  Finally, T.D. 82-135 amended
sections 19.40 through 19.49 of the Customs Regulations (19 CFR
19.40 - 19.49) relating to container stations, to provide that
bonded carriers may transport containerized cargo in-bond to
container stations at ports of destination.  Prior to this T.D.,
the use of container stations was restricted to facilities within
the port of arrival. 

     Along with this progression, a carrier's liability has
become more finite.  Under the prior regulations the importing
carrier remained jointly and severally liable with the container
station operator for the proper delivery of the merchandise until
Customs authorized the carrier to make delivery to the consignee
or the next carrier in accordance with Subpart A of Part 158,
Customs Regulations (19 CFR Part 158).  Upon the enactment of
T.D. 82-135, the carrier's obligations terminate upon the formal
receipt by the container station operator.

     The specific language establishing this transfer of
responsibility can be found in 19 CFR 19.44(a).  This section
provides that an importing carrier shall remain liable under the
terms of its bond for the proper safekeeping and delivery of the
merchandise until it is formally receipted for by the container
station operator, if the merchandise is transferred directly to a
container station from an importing carrier. (emphasis added)

     The basic custodial bond conditions required of a container
freight station and a carrier transporting unentered merchandise
from port to port are provided for under 19 CFR 113.63.  Under 19
CFR 113.63(a)(4) a container station authorized under the Customs
Regulations is to comply with all regulations regarding the
receipt, carriage, safekeeping, and disposition of the
merchandise.  Additionally, the CFS is to report promptly to
Customs each arrival of a container and its merchandise by
delivery of the manifest and the application for transfer, or by
other approved notice.  By 19 CFR 113.63(b), the responsibility
of the carrier is established to receive, keep safe, report the
arrival of the merchandise by delivering the manifest or other
approved notice, and dispose of the merchandise in compliance
with the Customs Regulations.  General provisions applicable to
carriers are imposed in 19 CFR 18.1(a)(1) and 18.2.

     An application for the transfer of merchandise, as displayed
in 19 CFR 19.42, may be utilized by a container station operator
to transfer the container intact to the station.  This
application lists the carrier's name, the date of arrival at the
pier and at the container station, an abstract of the carrier's
manifest covering the containers by bill of lading number, marks,
numbers, contents, consignee and the signatures of the agent of
the importing carrier and the authorized agent of the container
station.  

     A bill of lading is an instrument in writing, signed by a
carrier or his agent, describing the freight, stating the name of
the consignor, the terms of the contract for the carriage, and
stipulating that the freight will be delivered to a specified
person at a specified place.  Black's Law Dictionary (rev. 4th
ed. 1968).  It functions as a receipt acknowledging the
possession of specified property, and a contract to carry and
deliver.  Pollard v. Rinton, 105 U.S. 7, 26 L.Ed. 998; Cobb v.
Brown, 193 F. 958, 113 C.C.A. 586; Arman v. Dover and Southbound
R. Co., 179 N.C. 310, 102 S.E. 392.  Liability for goods
commences upon receipt by the carrier and is discharged by
delivery and acceptance of the succeeding carrier (Inland
Waterways Corporation v. Standard Commercial Tobacco Co., 65 F.2d
715) or container freight station.

     For the purpose of identifying the goods and establishing
receipt by the CFS the bill of lading is adequate.  Once the
signature of the warehouse manager of EMO was applied to the bill
of lading as an acknowledgement that the merchandise had arrived
at the CFS and possession of the merchandise had been
transferred, the "formal receipt" requirement in 19 CFR 19.44(a)
was fulfilled.  TFS, the bonded carrier, was absolved of its duty
of safekeeping the merchandise from that point forward and EMO's
responsibilities under its bond commenced. 

HOLDING:

     Based upon the foregoing, the signature of an authorized
agent of a container freight station placed upon a bill of lading
after the merchandise has been delivered and transferred to the
container freight station fulfills the "formal receipt"
requirement in 19 CFR 19.44(a).  


                              Sincerely,




                              John Durant, Director,