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HQ 115532





March 8, 2002

BOR-4-04-RR:IT:EC 115532 GEV

CATEGORY: CARRIER

Paul R. Landry
President
British Columbia Trucking Association
#1-1610 Krebet Way
Port Coquitlam, British Columbia, Canada V3C 5W9

RE: Pilot Cars; Entry; 19 U.S.C. 1498

Dear Mr. Landry:

This is in response to your letter dated December 20, 1999, seeking clarification regarding the treatment by the U.S. Customs Service of Canadian pilot cars. Our ruling on this matter is set forth below.

FACTS:

Canadian pilot cars are required by law to escort Canadian-based trucks carrying wide loads from Canada to points in the United States. The pilot cars subsequently return to Canada after the load is delivered.

ISSUE:

Whether Canadian pilot cars are exempt from entry.

LAWS AND ANALYSIS:

Section 141.4, Customs Regulations (19 CFR 141.4), provides that entry as required by title 19, United States Code, 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 Canadian pilot cars are not so exempted, they are subject to entry and payment of any applicable duty.

Vehicles and other 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)).

Section 10.41(d), Customs Regulations (19 CFR 10.41(d)), provides, in part, that any foreign-owned vehicle brought into the United States as an element of a commercial transaction, except as provided at section 123.14(c) (pertaining to the use of foreign-based vehicles in local traffic in the United States), is subject to treatment as an importation of merchandise from a foreign country and a regular entry therefor shall be made.

Pursuant to a request for internal advice received from the former Regional Commissioner of Customs, Pacific Region, dated January 29, 1975, regarding this matter, Headquarters issued a response dated April 1, 1975 (file no. 101502), which provided that “pilot cars do not qualify for admission under this provision [19 CFR 123.14] because they do not carry merchandise or passengers between the United States and Canada. Admission of foreign-owned pilot cars as instruments of international traffic is not warranted and should not [sic] longer be permitted.”

With respect to the applicability of section 10.41(d) to the use of Canadian pilot cars as described above, the aforementioned internal advice further provided that whether an article is used as “an element of a commercial transaction” depends upon the circumstances of each case, and the term thus is not susceptible of authoritative definition. Generally the courts have defined a commercial activity, in its broadest sense, to include any type of business or activity which is carried on for a profit. Caribbean Steamship Co. v. Le Societe Navale Caennaise, 140 F.Supp. 16, 21 (4th Cir. 1956). The internal advice held that the use of Canadian pilot cars as described above is “an element of a commercial transaction” within the meaning of that regulatory provision.

Advice furnished by Headquarters in response to a request therefor represents the official position of the U.S. Customs Service with respect to the application of the Customs laws to the facts of a specific transaction and, absent a request for reconsideration by the requesting field office, is to be applied by the field office in its disposition of the Customs transaction in question. (19 CFR 177.11(b)(6)) To date, Headquarters has received no such request for reconsideration.

In regard to entry of these vehicles, Customs ruling letter 114914, dated January 12, 2000, held that this must be done formally. However, upon further review of this matter, Customs has determined that in the interest of expediency and facilitation of cross-border traffic, these pilot cars may be entered informally pursuant to sections 148.23(c) and 143.23(a), Customs Regulations (19 CFR 148.23(c) and 143.23(a)). Customs does retain the right, however, to demand formal entry pursuant to section 143.22, Customs Regulations (19 CFR 143.22) if, in the discretion of the port director, formal entry is warranted.

Accordingly, Customs position regarding the treatment of Canadian pilot cars as set forth in the above-cited internal advice remains unchanged. Such vehicles are subject to entry which may be done informally pursuant to the above-cited regulatory authority. Customs ruling letter 114914, dated January 12, 2000, is therefore modified as to this issue.

HOLDING:

Canadian pilot cars are not exempt from entry, however, this may be done informally pursuant to 19 CFR 148.23(c) and 143.23(a). Customs does retain the right to demand formal entry pursuant to 19 CFR 143.22.

Sincerely,

Sandra L. Bell

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