HQ 222492: Further review of protest #2605-0-000003 concerning the validity of charging fees for the establishment of a container station

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 222492

                        February 4, 1991


PRO-2-02 CO:R:C:E 222492  TLS

CATEGORY: Entry; Protests

District Director
U.S. Customs Service
International and Terrace Streets
Nogales, Arizona  85621

RE: Further review of protest #2605-0-000003 concerning the    
validity of charging fees for the establishment of a    
container station


Dear Sir:

     The above-referenced protest has been forwarded to this
office for further review.  We have considered the points raised
by the protestant and your office.  Our decision follows.

FACTS:

     This protest involves the exaction of fees for the
establishment of a container freight station.  The protestant
contends that it should not have been charged a fee; rather, the
costs of establishing the station should have been offset from
the Customs User Fee Account.  It is further argued that Customs
had no authority to charge the fees as no statutory authority
exists that specifically requires that such fees be charged for
the designation and operation of container stations.

     The facts show that the container freight station at issue
had already been approved as a Customs bonded warehouse at the
time of the fee exaction.  The protestant claims that the
security and background investigations for which the fee is to
apply had already been completed.  Therefore, the fee went beyond
the actual services provided for the container station.  The
importer argues that only administrative services were left
uncompensated for after the bonded warehouse approval.  The fee
charged amounted to $1021.00, which was established by notice in
T.D. 85-70 (March 29, 1985).

ISSUE:

     Whether or not the collection of fees for the designation or
operation of container stations is permissible under existing
United States Code statutes.

LAW AND ANALYSIS:

     Sections 19.40 through 19.49 of the Customs Regulations
outline the procedures for the establishment and use of container
stations.  In particular, 19 CFR 19.40 was amended by the Federal
Register publication of T.D. 83-56 to give Customs the authority
to charge fees for the establishment of container stations.  48
Fed. Reg. 9853 (March 9, 1983).  The notice also provided that a
fee schedule is to be published in the Federal Register and
Customs Bulletin periodically to revise the fee to reflect
increased costs.  The fee charged in the present case was set by
publication of T.D. 85-70 in the Customs Bulletin for March 29,
1985.

     The protestant argues that the container freight station at
issue here had already been established at the time of the fee
exaction.  The $1,021.00 fee, therefore, it is argued, was
charged only for the administrative approval that followed.  The
protestant's argument seems to suggest that the fee should have
been exacted before the station was established and any charges
made afterwards cannot apply to that particular task.

     We do not read the applicable law in such a way.  Section
19.40 of the Customs Regulations does not make reference to when
the fee may be exacted in relation to when the act requiring the
charging of a fee is performed by Customs.  Furthermore, section
19.40(c)(1) makes no mention of when the fee should be charged in
relation to when the services are performed.  The only
requirement noted, in fact, is that the fee schedule be published
in the Federal Register.

     The protestant makes much light of the language of section
58c of the Tariff Act of 1930.  Specifically, it is argued that
the establishment and control of container stations are Customs
commercial operations covered under that provision.  The relevant
subsections read as such:

     (e)(6) Notwithstanding any other provision of law
     except paragraph (2), during any period when fees are
     authorized under subsection (a) of this section, no
     charges, other than such fees, may be collected--
          (A) for any--
               (i) cargo inspection, clearance, or
               other customs activity, expense, or
               service performed...               
               (ii) customs personnel provided, in
               connection with the arrival or
               departure of any commercial vessel,
               vehicle, or aircraft, or its
               passengers, crew, stores, material,
               or cargo, in the United States;...

     (f)(1) There is established in the general fund of the
     Treasury a separate account which shall be known as the 
     "Customs User Fee Account".  Notwithstanding section
     1524 of this title, there shall be deposited as
     offsetting receipts into the Customs User Fee Account
     all fees collected under subsection (a) of this section
     except that portion of such fees that is required under
     paragraph (3) for the direct reimbursement of
     appropriations.

     (3) The Secretary of the Treasury, in accordance with
     section 1524 of this title and without regard to
     apportionment or any other administrative practice or
     limitation, shall directly reimburse, from the fees
     collected under subsection (a) of this section, each
     appropriation for the amount paid out of that
     appropriation for the costs incurred by the Secretary
     in providing-

          (B) all preclearance services; for which the
          recipients of such services are not required
          to reimburse the Secretary of the
          Treasury....  (emphasis added.)

     The importer claims that the expenses for the establishing
the container station in this case should be paid out of the
Customs User Fee Account instead of directly reimbursed from its
own expense account.  It is true that the account is to be used
to offset expenses that the Customs Service incurs "in conducting
commercial operations."  Upon closer reading, however, we note
that an exception is made for services the recipients of which
are required to reimburse the Secretary of the Treasury.  Hence,
the underscored language as emphasized above.  The exception is
clearly made to uphold the impact of Customs laws mandating
direct reimbursement from recipients of certain services.  As
noted before, Customs Regulations section 19.40 requires direct
reimbursement from the recipient of services provided by the
Customs Service in establishing and maintaining container
stations.  It is beyond dispute that Customs in this case
incurred expenses in inspecting and overseeing the establishment
of a container station.   We cannot ignore the unambiguous terms
of the relevant law here.  Therefore, we must find that the
protestant is required to directly reimburse the U.S. Customs
Service for services rendered in the establishment of the
container station in this case.

     The protestant also argues that Customs has relied on
section 555 and 556 of the Tariff Act of 1930 to establish
container freight stations and set fees for them.  We disagree. 
Customs' authority for establishing the container stations and
charging fees for such are generally based on sections 499 and
624 of the Tariff Act.  Section 499 requires that imported
merchandise be inspected, examined, or appraised and reported by
the appropriate customs officer to have been truly and correctly
invoiced and found to comply with requirements of the laws of the
United States before it is delivered from customs custody.  19
U.S.C. 1499 (1990).  Section 624 gives the Secretary of the
Treasury the authority "to make such rules and regulations as may
be necessary to carry out the provisions [set forth in other
parts of the Tariff Act]."  19 U.S.C. 1624 (1990).  These
statutes allow the Customs Service and its parent agency, the
Department of the Treasury, to set and implement regulations
allowing Customs to, inter alia, establish container stations. 
In particular, the inspection procedures performed by Customs
personnel at container stations are covered by section 499.  The
regulations provided for under sections 19.40 to 19.49 of the
Customs Regulations are consistent with section 624.  Thus,
sections 555 and 556 of the Tariff Act are not directly relevant
to Customs' authority to charge fees for the establishment of
container stations as provided for under Customs regulation
19.40.

HOLDING:

     You are to deny this protest in full.  A Form 19, Notice of
Action, should be attached hereto.

                               Sincerely,




                               John Durant, Director