Customs Broker May Conduct Vessel Entry and Clearance Activities Without District Permits, CBP Says

A customs broker's vessel entry and clearance services do not constitute customs business, CBP said in a recent ruling. The activities performed by the broker, Schenker, are all either not covered by CBP regulations on customs business or are specifically exempt, CBP said in ruling HQ H260075. Because the activities do not have to be performed by a customs broker, Schenker may expand its vessel entry and clearance services to other ports without having to get additional broker district permits, CBP said in the ruling, issued in April.

As part of its vessel entry and clearance activities, Schenker prepares and files Coast Guard notices of arrival and departure; passenger and crew lists (CF I-418); cargo declarations (CF 1302); ship stores declarations (CF 1303); crew effects declarations (CF 1304); applications for permits to unlade-overtime (CF 3171); cargo manifests; importer security filings (ISF); Automated Manifest System (AMS) transmissions; Automated Export System (AES) transmissions; CF 7512 for transportation in-bond; certificates of registration (CF 4455); and crewmember declarations (CF 5129). Schenker conducts all of these services "as an agent under the appropriate powers of attorney from the relevant parties," CBP said.

"Customs business covers transactions with CBP for the entry and admissibility of merchandise," CBP said. Though CBP may require formal entry of certain vessels, this differs from the entry of merchandise covered by the customs business definition, the agency said. CBP's regulations also specifically exempt entry and clearance of vessels from the customs business definition, it said. Preparation and filing of Coast Guard notices of arrival and departure and CF 3171 "concern the entry and clearance of a vessel, and not the entry and admissibility of merchandise," and do not constitute customs business, CBP said.

Customs business also does not cover activities that are permitted by statute or regulation to be performed by an "authorized agent," CBP said. That includes inward cargo manifest, which may under 19 USC 1431(b) be filed by an agent, as well as the related Forms 1302, I-418, 1303, 1304 and 5129, it said. "Assuming that Schenker establishes an agency relationship with the vessel's owner or operator" to file these forms, Schenker may prepare and submit them "without a customs broker license and district permit," the agency said.

CBP has confirmed in previous rulings that "certain activities in connection with the exportation of merchandise" are not considered customs business. That means outward cargo manifests, AES transmissions and CBP Form 4455 may be filed by Schenker without a license. AMS transmissions and ISF filings are not considered by CBP to be customs business provided they do not classify merchandise beyond the six-digit subheading level in the tariff schedule. Finally, transportation in-bond is exempt from the definition of customs business in CBP regulations, meaning no license is required to file CF 7512, the agency said.