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HQ 111438


January 24, 1991

VES-5-28-CO:R:IT:C GEV

CATEGORY: CARRIER

John deRomoet
Regional Counsel of Customs
10 Causeway Street
Boston, Massachusetts 02222-1056

RE: Supplemental Petition of Evergreen International (U.S.A.) Corporation; Baltimore District Case No. 89-1303-21170; 46 U.S.C. App. 91; Clearance; Shipper's Export Declaration

Dear Mr. deRomoet:

This is in reference to your letter dated November 30, 1990 (your ref: RL:ART 90-0389) and attachments thereto regarding the above referenced penalty. Our ruling on this matter is set forth below.

FACTS:

The vessel M/V EVER GLOBE, owned by Evergreen International (U.S.A.) Corporation ("Evergreen"), was laded at the Port of Baltimore with cargo destined foreign. No shipper's export declaration (SED) or bill of lading was presented to Customs prior to the time of the vessel's clearance on August 11, 1989. When the bill of lading was finally submitted, it did not contain the statement "NO SED REQUIRED, SECTION 30.39 FTSR, S.A.S. DP." Furthermore, the Cargo Declaration and General Declaration both stated that the manifest was filed complete.

In view of the above, the District Director of Baltimore issued a penalty notice to the shipping agent for Evergreen, dated August 28, 1989, in the amount of $1000.00 for a violation of 46 U.S.C. App. 91. The underlying violation was the failure of the carrier to submit the bill of lading, which referenced a Commerce Department license for the shipment, prior to the lading of the merchandise or the vessel's clearance (see 15 CFR

It is Evergreen's position that it was exempt from filing a bill of lading prior to lading or export because it is considered an "automatic filer" or "electronic filer" of Department of Commerce validated licenses, wherein the SED's are not submitted
to Customs but instead are reported by diskette directly to the Bureau of Census. Further in support of their position that no violation of 46 U.S.C. App. 91 was committed, Evergreen has submitted a letter from the District Director of Norfolk, dated February 12, 1987, stating that after consulting with Customs Headquarters, "...it is the opinion of the Chief, Carrier Rulings Branch, that monthly and electronic filers of Commerce Department validated licenses need not file a bill of lading prior to departure of the cargo."

ISSUES:

1. Whether the failure to submit a bill of lading referencing a Department of Commerce license prior to a vessel's clearance constitutes a violation of 46 U.S.C. App. 91.

2. Whether a penalty for a violation of 46 U.S.C. App. 91 should be assessed against the master or other person having charge of the vessel, or against the shipping agent.

LAW AND ANALYSIS:

Title 46, United States Code Appendix, 91, provides in part that, "The master or person having the charge or command of any vessel bound to a foreign port shall deliver...a manifest of all cargo on board." Furthermore, 91 provides in part that, "...if the master delivers a false statement...the master or other person having the charge or command of such vessel shall be liable to a penalty of not more than $1,000 nor less than $500..."

Sections 4.61(b)(2), 4.63(a)(1) and (2), and 4.75(a) and (b), Customs Regulations, all promulgated pursuant to 46 U.S.C. App. 91, provide for the submission of export documentation prior to the clearance of a vessel. Section 4.61(b)(2) states that before clearance is granted to a vessel bound for a foreign port, the district director shall verify compliance with respect to outward cargo declarations and SED's. Sections 4.63(a)(1) and (2) state, in part, that no vessel shall be cleared unless the following have been filed with the appropriate Customs officer at the port from which clearance is being sought: an outward cargo declaration; copies of bills of lading or equivalent commercial documentation; and export declarations as are required by pertinent regulations of the Bureau of Census, Department of Commerce; or an incomplete cargo declaration as provided for in 4.75.

Sections 4.75(a) and (b) state that, with the exception of those countries listed in section 4.75(c) for which vessels may not be cleared until complete manifests and SED's are filed, if a master desiring to clear his vessel for a foreign port does not have the requisite documentation for clearance the district
director may accept an incomplete manifest provided the missing documentation is submitted to Customs not later than the fourth business day after clearance. However, it is Customs policy that vessels and aircraft carrying cargo subject to a Department of Commerce validated export license, or cargo subject to a Department of State export license because the cargo is on the U.S. munitions list, or cargo subject to a DEA license, should not be permitted to use the delayed clearance procedures in section 4.75 and former section 6.8 (the latter is now section 122.74). (see Commissioner's telex dated November 28, 1984, copy enclosed)

In regard to issue 1, we have been informed by the Office of Inspection and Control that while Evergreen's application for participation in the Bureau of Census' Automated Export Reporting Program is currently being considered, to date it has not been accepted. We note that Attachment B of your letter is merely a blank sample authorization request. Consequently, Evergreen was not an "automatic filer" or "electronic filer" of Department of Commerce validated licenses on the date of the vessel clearance in question. Accordingly, Evergreen was not exempt from the requirement to file an SED pursuant to the aforementioned Customs Regulations.

Assuming, arguendo, Evergreen's status as an "automatic filer" or "electronic filer" as discussed above, the bill of lading nonetheless had to be presented prior to the lading or exportation of the cargo pursuant to 15 CFR 786.1(c)(2). We note that Evergreen did not present the bill of lading prior to the lading or exportation and they further stated that the manifest was filed complete when in fact it was not.

As for Evergreen's reliance on the February 27, 1987, letter from the District Director of Norfolk, we note that the statement contained therein regarding the filing of bills of lading is not consistent with Customs policy on this matter.

Accordingly, we find that the circumstances of this case constitute a violation of 46 U.S.C. App. 91. We also concur with the recommendation of the Baltimore District Director that Evergreen has not presented any additional facts which would justify cancellation of the penalty. Therefore the supplemental petition is properly denied.

In regard to issue 2, we note that 46 U.S.C. App. 91 penalties are properly assessed against the master of the vessel. However, for practical reasons the penalty notice is sent to the vessel line or agent. We will clarify the correct citation procedures with our field offices.

HOLDINGS:

1. The failure to submit a bill of lading referencing a Commerce Department license prior to a vessel's clearance is a violation of 46 U.S.C. App. 91.

2. A penalty for violation of 46 U.S.C. App. 91 is properly assessed against the master.

Sincerely,

B. James Fritz

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