Details of CBP FAQ on Entry Requirements for IIT Containers with Residue

(In July 2009, CBP published in the Customs Bulletin HQ H026715, which modified HQ 113129, a 1994 ruling that had allowed containers imported with residual chemicals to be entered as empty.¹ HQ H026715 requires that the chemical residue imported in the containers be classified, entered, and manifested. HQ H026715 also allows the containers themselves to continue to be considered IIT.

CBP stated that it issued H026715 in order to be consistent with its treatment of similar commodities, such as petroleum slops, and to ensure the safety and security of the transportation of such containers. In addition, trade sources had stated that the reasoning in this ruling would be applied by CBP to other types of IIT residue.)

Enforcement of Entry and Manifest Requirements for Residue Delayed

HQ H026715’s requirement for entering and manifesting residue in containers considered to be IIT was listed as September 16, 2009 in the Customs Bulletin. However, CBP has delayed enforcement of the requirement to classify, enter and manifest residue until further notice. CBP has also encouraged importers to take steps to comply with this requirement at their earliest opportunity.

FAQ Helps Trade Comply With Requirements

CBP states that this FAQ will assist the trade community in understanding the obligations of transporting carriers concerning the advance electronic cargo information, and importers for entry requirements, of IIT with residue. CBP suggests that the trade continue to monitor the FAQ’s web page for changes and updates.

CBP sources add that this FAQ also lays the groundwork for CBP’s eventual enforcement of these requirements.

Obligations Once Enforcement Date is Established

CBP states that once a definitive enforcement date is established:

• IIT² containing residual chemicals, cargo, goods, etc. must be manifested and entered in compliance with customs laws;
• If qualified, shipments containing residual goods can be entered as American Goods Returned (AGR); and
• Since the exact amount of the residual goods may not be known at the time the advance cargo information is required to be transmitted, the importer may estimate the amount when providing that information to the carrier for transmission to CBP. Additionally, the same estimated amount should be used at the time of entry of the goods. If a more precise amount is obtained after arrival then the entry should be amended.

Highlights of CBP’s Requirements for ITT Imported with Residue

Manifesting and entering IIT. CBP states that an IIT arriving from a foreign port or place with residue may not be manifested or entered as an empty container. The residue must be manifested, classified, and entered in accordance with statutes and regulations enforced by CBP. The CBP Form 3461 will have two lines -- one using HTS 9801.00.10 or 9803.00.50 -- and the other using the correct classification of the goods with the correct value.

CBP’s table illustrates the entry type and bond requirements based on the value of the residue:

*May be subject to other Federal agency license, permit, and/or restriction (e.g., DOT, EPA TSCA, FDA PN)

CBP notes that an IIT arriving that is actually empty (devoid of any residue) may be released without entry or the payment of duty, subject to the provisions of 19 CFR 10.41a. However, under 19 CFR 10.41a(c), an IIT will be released only after a bond has been filed on Customs Form 301 containing the bond conditions required under 19 CFR 113.66. The principal on the IIT (Type 3A) bond must be the applicant for release of the holder or container designated as an IIT.

Estimating quantity. According to CBP, since the exact amount of the residual goods may not be known at the time the advance cargo information is required to be transmitted, the importer may estimate the amount when providing that information to the carrier for transmission to CBP. CBP states that the same estimated amount should be used at the time of entry of the goods. If a more precise amount is obtained after arrival, then the manifested quantity must be amended by the carrier and the entry must be amended by the filer.

The failure to effect corrections within time limits prescribed by the existing statutes and regulations may result in the initiation of an enforcement action by the CBP port director.

Definition of shipper. In response to a question about who is considered the “shipper” for IIT arriving with residue, CBP notes that it has agreed to use the 24-Hour rule definition of shipper until the issue is resolved. (Under the 24-Hour rule, the party that contracts for carriage of the cargo is acceptable in the shipper field. However, a CBP officer may place the shipment on hold or issue a Do Not Load until s/he can identify additional, specific information regarding the parties involved.)

(See ITT’s Online Archives or 02/24/04 news, (Ref: 04022405), for BP summary of CBP’s delay of full enforcement of the term shipper in the inbound ocean advance manifest regulations.)

FAQ Contains Additional Details from Regulations, Statute, Etc.

In its FAQ, CBP provides information from the regulations and statute on:

• Definition of an IIT (from 19 USC 1322(a));
• Who will make the entry (exporter, carrier) (19 USC 1484)
• Reliance on ruling letters by others (19 CFR 177.9(c), 19 CFR 141.4);
• Additional details on who is considered the shipper and the importer for IIT arriving with residue;
• Publicly available resources and reference materials on this issue; and
• Application of original 1994 ruling (HQ 113129).³

¹In HQ 113129, CBP had held that steel containers meeting the requirements of 19 CFR 10.41a as instruments of international traffic and filled with a chemical when exported from the U.S. could be entered as empty when imported back into the U.S., notwithstanding the residue of chemicals remaining in the containers. It was stated that not only was the residue a very small part of the amount of a full container, but it was virtually impossible to completely empty the containers. The residue was not discarded, rather, more chemicals were added to the containers.

²CBP states that in order to qualify as an IIT within the meaning of 19 USC 1322(a) and 19 CFR 10.41a et seq., an article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. 19 CFR 10.41(a(a)(1) designates as IIT lift vans, cargo vans, shipping tanks and certain other named articles and states that other articles may be designated as IIT by the CBP Commissioner in decisions to be published in the weekly Customs Bulletin.

³In response to a question about whether CBP intends to enforce its position in HQ H026715 on just bulk and intermediate bulk containers or any container with residue, box, barrel, drum, pail, jerrican, can, bag, etc., CBP stated that to the extent that the original 1994 ruling (HQ 113129) applied to Dow Corning, and those containers at issue within the ruling, all other entities should have been transmitting advance electronic cargo information and properly entering the merchandise and containers that have been transported into the U.S. (See FAQ for details on the provisions in 19 CFR 177.9(c) regarding reliance on ruling letters by others.)

(See ITT’s Online Archives or 05/10/10 news, (Ref: 10051010), for BP summary announcing the availability of CBP’s FAQs, with cites to other BP summaries on issue.)

FAQ (posted 05/05/10) available at http://www.cbp.gov/linkhandler/cgov/trade/trade_outreach/advance_info/itt_faqs.ctt/itt_faqs.doc.