HQ 114914

January 12, 2000

# BOR-4-04-RR:IT:EC 114914 GEV

CATEGORY: Carriers

Paul R. Landry

President

British Columbia Trucking Association

#1-1610 Krebet Way

Port Coquitlam, British Columbia, Canada V3C 5W9

RE: Instruments of International Traffic; Pilot Cars; 19 U.S.C. § 1322

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 formal 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

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entry and payment of any applicable duty. With respect to the latter, we
note that such vehicles are exempt from duty pursuant to Chapter 87,
Harmonized Tariff Schedule of the United States, Annotated (HTSUSA).

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 §
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 § 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]{.underline}, 140 F.Supp. 16, 21 (1966). 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.

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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 formal entry.

HOLDING:

Canadian pilot cars are not exempt from formal entry.

Sincerely,

Jerry Laderberg

Chief

Entry Procedures and Carriers Branch