HQ 221433: Transportation of merchandise through Canada; 19 U.S.C.1554; 19 CFR 123.21; transshipment permitted; 19 CFR 123.26;merchandise may exit and enter United States at same port; in-transit manifest required; merchandise must be sealed; shippers'export declarations filed at final port of exportation.

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 221433

                       September 19, 1990
                                   
BOR-2-01 CO:R:C:E  221433 GG                                 

CATEGORY:  Entry/Liquidation

William H. Carey
A.N. Deringer, Inc./W.R. Filbin & Co., Inc.
1010 Niagara Street
Buffalo, New York 14213

RE:  Transportation of merchandise through Canada; 19 U.S.C.
1554; 19 CFR 123.21; transshipment permitted; 19 CFR 123.26;
merchandise may exit and enter United States at same port; in-
transit manifest required; merchandise must be sealed; shippers'
export declarations filed at final port of exportation.  

Dear Mr. Carey:

     This is in response to your letter dated April 28, 1989,
which concerns the transshipment of containerized cargo through
Canada.  You request approval of an operation your client, the
Norfolk & Western Corp., plans to undertake with respect to
merchandise that will be transported into Canada for reloading
purposes only.

FACTS:

     The Norfolk & Western Corp. would like to truck
containerized U.S. merchandise across the Canadian border to a
special railroad loading facility, where the containers will be
transferred to stack trains.  The containers will be sealed when
they enter Canada and will remain sealed while they are in
Canada.  After the completion of the loading process, the trains
carrying the containers will then reenter the United States at
the same port where the containers had originally exited to
Canada.  The trains will then proceed to various destinations on
the U.S. West Coast, where the merchandise will be exported.  The
reason given for the shipment of the containers in this
circuitous manner is that it is less expensive than trucking them
directly across country.

ISSUE:

     1)  Whether containers of merchandise may be taken by truck
into Canada, transshipped onto railroad stack cars, and then
returned to the United States through the same port, without
being treated as an importation?

     2)  Where should the Shippers Export Declaration be filed,
if, after their transshipment in Canada, the containers then
return by train to the United States and proceed to the West
Coast for exportation overseas?

LAW AND ANALYSIS:

     Section 554 of the Tariff Act of 1930, as amended (19 U.S.C.
1554), and section 123.21 of the Customs Regulations (19 CFR
123.21) allow domestic or previously imported, duty-paid or in
bond merchandise to be transported from one port to another in
the United States through contiguous countries, if the proper
authorities consent to the procedure.  The advantage of
transporting merchandise in this manner is that it will not be
treated as an importation when it is returned to the United
States, and the requirement of an inward foreign manifest will be
waived when an in-transit manifest is presented.  In-transit
merchandise returned to the United States will be treated as a
regular importation from Canada or Mexico, if no in-transit
manifest is furnished upon the merchandise's return, and if the
seals affixed to the merchandise to ensure that it was not
tampered with or diverted while outside of the United States were
missing or had been broken without Customs' supervision.  

     It would be overly restrictive to interpret the language in
19 U.S.C. 1554 as precluding transactions where merchandise left
the United States and then, at a later time, returned via the
same port.  As long as the conditions with respect to manifests
and sealing have been complied with, a company can transship
merchandise through contiguous countries via the same U.S. port,
without the return being treated as an importation.  Subject to
these conditions, the Norfolk & Western Corp.'s containerized
merchandise may both leave, and return to, the United States at
Buffalo.

     Section 123.26 of the Customs Regulations specifically
provides for the transshipment of in-transit merchandise from one
conveyance to another in foreign territory.  The transferring of
the containers from the trucks to the railroad stack cars would
be allowed under this regulation.  If the seals have to be broken
during the transfer, a Customs officer would have to be there to
supervise the operation.

     The district office of Customs has expressed concern that
the authorization of this procedure would result in an increase
in paperwork and manpower requirements.  However, we think some
of these fears can be assuaged by stating that only one in-
transit manifest, the United States-Canada Transit Manifest on
Form 7512-B Canada 8-1/2, need be prepared for each container of
merchandise.  The use of this type of manifest should give the
government adequate control over the merchandise, and will
obviate the need, in this particular instance, for separate in-
transit rail manifests. 

     In this type of operation, the shipper must present the
shippers' export declarations at the final port of exportation,
which the Norfolk & Western Corp. has indicated will be ports on
the U.S. West Coast.  See section 4.63 of the Customs Regulations
(19 CFR 4.63).

HOLDING:

     1)  Containers of merchandise may be taken from the United
States into Canada, transshipped from one conveyance to another,
and then returned to the United States via the same port, without
being treated as an importation, as long as the containers are
sealed while in Canada and a Customs officer supervises any
operations which require the seals to be broken, and an in-
transit manifest is furnished upon the merchandise's return to
the United States.

     2)  The proper place to file the shippers' export
declarations is the final port of exportation, which under these
particular facts would be various ports on the U.S. West Coast.

                               Sincerely,



                               John Durant, Director