Guidance issued December 22, 1992 to provide clarification on Entry processing for pipeline operators.
Various district directors have experienced difficulties in resolving issues related to the entry requirements for commodities entering the United States through pipelines. In response, the User Fee Task Force (UFTF) has been working with the Office of Chief counsel and the Office of Trade, Regulations and Rulings to define the entry requirements for pipeline commodities.
Chief Counsel has recently issued an opinion regarding this matter which resolves many of the problems related to these types of entries. The salient points of the opinion are:
- Entry must be made for every importation through a pipeline.
- Pipeline operators are considered to be "nominal consignees," similar to other carriers, and therefore are able to designate Customs brokers to make entry
- Merchandise imported through pipelines without entry having been made is imported contrary to law (see, 18 U.S.C. 545), and all Customs laws and regulations dealing with such importations are applicable (see, 19 U.S.C. 1595A, 19 CFR Part 162).
- Although pipeline operators are not required to file manifests, they are required to keep and maintain records. These records are to be made available to Customs (19 U.S.C. 1508, 1509; 19 CFR Part 162).
- Failure to pay the Merchandise Processing Fee (MPF) is equivalent to failure to pay duty.
As a result of this opinion, we suggest that you contact all pipeline operators in your district and specifically notify them of Customs entry requirements. You should indicate that importation without entry being made is illegal and that penalties may be assessed or forfeiture instituted under 19 U.S.C. 1595A, 19 CFR Part 162.
You should also be aware that there is a regulation establishing Customs controls and checks on the unlading and measurement of petroleum products imported by truck, railroad car, and pipeline (19CFR 151.42). This regulation stipulates that each district director of Customs must approve the metering and sampling installations. Pipeline operators should notify Customs so that these installations can be monitored. We are contacting various trade groups associated with pipeline importations to advise them of these regulations. Pipeline operators should forward to you completed descriptions of the installations in your district for review and approval. Approval should be given on a case-by case basis.
You should also notify known exporters and importers of the Customs entry requirements as well as the penalties, civil and criminal, which could attach for disregard of Customs laws. You may choose to indicate your willingness to discuss procedures necessary to respond to the specific needs of the pipeline community. Entry procedures for past importations and resolution of all potential claims should also be discussed. Additionally, the User Fee Task Force is contacting importers of natural gas, as reported to the Federal Energy regulatory commission (FERC), to notify them of their responsibilities. We believe that these suggestions will aid you in achieving an increased rate of compliance with Customs regulations.
We will continue to work with the Office of Chief counsel and the Office of Trade, Regulations and Rulings to develop appropriate entry provisions for pipeline operators. In the meantime, if you have any questions involving legal matters, contact your district of regional counsel.