[Federal Register Volume 63, Number 96 (Tuesday, May 19, 1998)]
[Proposed Rules]
[Pages 27533-27534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13217]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR PART 123

RIN 1515-AB88


Foreign-Based Commercial Motor Vehicles in International Traffic

AGENCY: Customs Service, Department of the Treasury.

ACTION: Proposed rule.

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SUMMARY: This document proposes to revise the Customs Regulations to 
allow certain foreign-based commercial motor vehicles, which are 
admitted as instruments of international traffic, to engage in the 
transportation of merchandise between points in the United States where 
such transportation is incidental to the immediately prior or 
subsequent engagement of such vehicles in international traffic. Any 
movement of these vehicles in the general direction of an export move 
or as part of the return movement of the vehicles to their base country 
shall be considered incidental to the international movement. The 
benefit of this liberalization of current cabotage restrictions inures 
in particular to both the United States and foreign trucking industries 
inasmuch as it allows more efficient and economical utilization of 
their respective vehicles both internationally and domestically.

DATE: Comments must be received on or before July 20, 1998.

ADDRESSES: Written comments (preferably in triplicate) may be addressed 
to and inspected at the Regulations Branch, U.S. Customs Service, 1300 
Pennsylvania Avenue, NW., 3rd Floor, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:
Legal aspects: Glen E. Vereb, Office of Regulations and Rulings, 202-
927-2320.
Operational aspects: Eileen A. Kastava, Office of Field Operations, 
202-927-0983.

SUPPLEMENTARY INFORMATION:

Background

    Section 141.4(a), Customs Regulations (19 CFR 141.4(a)), provides 
that entry as required by 19 U.S.C. 1484(a) shall be made of all 
merchandise imported into the United States unless specifically 
excepted. Foreign-based commercial motor vehicles are not among those 
excepted items listed in Sec. 141.4(b) and would therefore be subject 
to entry and payment of any applicable duty unless otherwise exempted 
by law or regulations.
    Pursuant to 19 U.S.C. 1322, vehicles and other instruments of 
international traffic shall be excepted from the application of the 
Customs laws to such extent and subject to such terms and conditions as 
may be prescribed in regulations or instructions of the Secretary of 
the Treasury.
    This statutory mandate pertaining to foreign-based commercial motor 
vehicles is implemented under Sec. 123.14 of the Customs Regulations 
(19 CFR 123.14). Section 123.14(a) states that to qualify as 
instruments of international traffic, such vehicles 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.
    Section 123.14(c), Customs Regulations, states that with one 
exception, a foreign-based commercial motor vehicle, admitted as an 
instrument of international traffic under Sec. 123.14(a), shall not 
engage in local traffic in the United States. The exception, set out in 
Sec. 123.14(c)(1), states that such a vehicle, while in use on a 
regularly scheduled trip, may be used in local traffic that is directly 
incidental to the international schedule.
    Section 123.14(c)(2), Customs Regulations, provides that a foreign-
based truck trailer admitted as an instrument of international traffic 
may carry merchandise between points in the United States on the return 
trip as provided in Sec. 123.12(a)(2) which allows use for such 
transportation as is reasonably incidental to its economical and prompt 
departure for a foreign country.
    In regard to these cabotage restrictions, Customs has received a 
petition from the American Trucking Association (ATA) requesting a 
change in Customs interpretation of its regulations governing the use 
of foreign-based trucks in local traffic in the United States. This 
petition is the culmination of joint discussions beginning in July of 
1994 between the ATA and the Canadian Trucking Association (CTA) to 
obtain mutually agreed upon parameters with respect to the 
liberalization of current truck cabotage restrictions in their 
respective countries. The proposed amendments would, however, be 
universally applicable.
    By way of additional background, reference is hereby made to a 
notice published in the Customs Bulletin pursuant to 19 U.S.C. 
1625(c)(1) (see 31 Cust. Bull. and Dec. No. 40, 7 (October 1, 1997)), 
which revised the interpretation of when a foreign-based truck would be 
considered as used in international traffic under existing Sec. 123.14. 
However, the proposal provided for herein regarding the use of a 
foreign-based commercial motor vehicle, including a truck, in 
permissible local traffic under Sec. 123.14(c) was, of course, not 
addressed in the Customs Bulletin notice. To effect this change 
requires an amendment under the Administrative Procedure Act, 5 U.S.C. 
553.
    Accordingly, Customs has determined to propose such an amendment of 
Sec. 123.14(c), which would allow certain foreign-based commercial 
motor vehicles, admitted as instruments of international traffic, to 
engage in the transportation of merchandise between points in the 
United States where such local traffic is incidental to the immediately 
prior or subsequent engagement of such vehicles in international 
traffic. In addition, this

[[Page 27534]]

revision would eliminate the current requirement that such 
international traffic be regularly scheduled. Furthermore, any movement 
of these vehicles in the general direction of an export move or as part 
of the return movement of the vehicles to their base country shall be 
considered incidental to the international movement.
    In conjunction with the proposed amendments to Sec. 123.14, this 
document also includes proposed conforming amendments to Sec. 123.16 
regarding the return of the qualifying vehicles to the United States.

Comments

    Before adopting the proposed amendments, consideration will be 
given to any written comments that are timely submitted to Customs. 
Comments submitted will be available for public inspection in 
accordance with the Freedom of Information Act (5 U.S.C. 552), 
Sec. 1.4, Treasury Department Regulations (31 CFR 1.4), and 
Sec. 103.11(b), Customs Regulations (19 CFR 103.11(b)), on regular 
business days between the hours of 9:00 a.m. and 4:30 p.m. at the 
Regulations Branch, 1300 Pennsylvania Avenue, NW., 3rd Floor, 
Washington, DC.

Regulatory Flexibility Act and Executive Order 12866

    The proposed rule would greatly relax current cabotage restrictions 
for both the U.S. and foreign trucking industries, enabling more 
efficient and economical use of their respective vehicles both 
internationally and domestically. As such, under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.), it is certified that, if 
adopted, the proposed amendments will not have a significant economic 
impact on a substantial number of small entities. Nor would the 
proposed rule result in a ``significant regulatory action'' under E.O. 
12866.

List of Subjects in 19 CFR Part 123

    Administrative practice and procedure, Canada, Common carriers, 
Customs duties and inspection, Imports, International traffic, Motor 
carriers, Railroads, Trade agreements, Vehicles.

Proposed Amendments to the Regulations

    It is proposed to amend part 123, Customs Regulations (19 CFR part 
123), as set forth below.

PART 123--CUSTOMS RELATIONS WITH CANADA AND MEXICO

    1. The general authority citation for part 123, and the relevant 
sectional authority citation, would continue to read as follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States (HTSUS), 1431, 1433, 1436, 
1448, 1624.
* * * * *
    Sections 123.13--123.18 also issued under 19 U.S.C. 1322;
* * * * *
    2. It is proposed to amend Sec. 123.14 by revising paragraph (c)(1) 
to read as follows:


Sec. 123.14  Entry of foreign-based trucks, busses and taxicabs in 
international traffic.

* * * * *
    (c) * * *
    (1) The vehicle may carry merchandise or passengers between points 
in the United States if such carriage is incidental to the immediately 
prior or subsequent engagement of that vehicle in international 
traffic. Any such carriage by the vehicle in the general direction of 
an export move or as part of the return of the vehicle to its base 
country shall be considered incidental to its engagement in 
international traffic.
* * * * *
    3. It is proposed to amend Sec. 123.16 by revising paragraph (b) to 
read as follows:


Sec. 123.16  Entry of returning trucks, busses, or taxicabs in 
international traffic.

* * * * *
    (b) Use in local traffic. Trucks, busses, and taxicabs in use in 
international traffic, which may include the incidental carrying of 
merchandise or passengers for hire between points in a foreign country, 
or between points in this country, shall be admitted under this 
section. However, such vehicles taken abroad for commercial use between 
points in a foreign country, otherwise than in the course of their use 
in international traffic, shall be considered to have been exported and 
must be regularly entered on return.

    Approved: March 31, 1998.
Samuel H. Banks,
Acting Commissioner of Customs.

John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 98-13217 Filed 5-18-98; 8:45 am]
BILLING CODE 4820-02-P