Entry of Certain Radar and Photographic Equipment installed on Aircraft

HQ H313856 November 16, 2023 13-139 CBP:OT:RR:ER H313856 JCO Paul Gagnon Peregrine Aerial Surveys, Inc. #201-1255 Townline Road Abbotsford, BC V2T 6E1 Canada RE: Entry of Certain Radar and Photographic Equipment installed on Aircraft Dear Mr. Gagnon, This is in response to your August 9, 2020, ruling request, forwarded to us by the National Commodity Specialist Division, regarding the applicability of a carnet to certain radar and photographic equipment installed on aircraft. FACTS: Your company provides aerial surveying services. For at least the past 8 years, Peregrine has been the owner-operator of Canadian-registered planes, specially modified with a LiDAR high-definition photographic survey equipment apparatus (“LiDAR”). LiDAR, an apparent abbreviation of “Light Detection and Ranging,” is a technology that is similar to radar but uses light or laser beams instead of radio waves. See N252838 (May 21, 2014). Peregrine describes one LiDAR system on its website as: “specifically engineered for airborne applications.” When making entry of its planes, Peregrine has never entered the LiDAR into the U.S. separately from Peregrine’s planes. In its request, Peregrine claims to have operated in the U.S. first under the North American Free Trade Agreement (“NAFTA”) and now the United States-Mexico-Canada Agreement (“USMCA”). Peregrine has described its planes’ entry into the United States thusly: 1) Several hours before a flight, Peregine files an Electronic Advance Passenger Information System (“eAPIS”) passenger manifest; 2) Peregrine files an international flight plan with NavCanada;  3) Peregrine calls CBP personnel at port of entry Bellingham International Airport, Bellingham, Washington (“Bellingham”) to discuss Peregrine’s intentions with its plane; 4) A Peregrine plane leaves Abbotsford, Canada (“Abbotsford”) and parks at CBP’s clearing spot at Bellingham; 5) CBP personnel electronically sweep the plane; 6) Peregrine pilot presents CBP with the appropriate travel documents, including passports, aircraft documentation, USMCA documentation and contracts; 7) after being released from customs, Peregrine’s plane flies to the job site at a location(s) within the United States and performs aerial surveying; and 8) Peregrine’s plane returns to Abbotsford. Job times consist of varying lengths; some are a single day, while others may take weeks. In the past, Peregrine self-installed the German-origin LiDAR on its plane’s hulls in Canada. In doing so, Peregrine removed the original passenger seats (excluding the pilot’s) and a large, original portion of the hull of each plane in order to insert and then bolt in the LiDAR. The frame of the plane was also strengthened to support the LiDAR, which weighs between 200 and 300 pounds. Peregrine states that if the LiDAR were to be removed there would be a minimum 22-inch hole in the hull of each of its aircraft. While the LiDAR is ultimately removable from the plane, Peregrine has no intention of removing the equipment. Peregrine states its planes would be useless to Peregrine’s business without the equipment. On August 8, 2020, CBP personnel at Bellingham informed Peregrine that Peregrine needed an A.T.A. carnet for the LiDAR. ISSUES: Whether an A.T.A. carnet is necessary for the LiDAR? Whether Peregrine’s planes are “private aircraft” pursuant to 19 C.F.R. § 122.26? LAW AND ANALYSIS: The basic statute concerning the entry of merchandise is found in section 484, Tariff Act of 1930, as amended (19 U.S.C. § 1484). Generally, all aircraft coming into the U.S. from a foreign area must make entry under 19 CFR 122, Subpart E. Exceptions are provided for public and private aircraft, civilian-crewed aircraft chartered by the U.S. Department of Defense (DOD) to transport only cargo that is the property of DOD, and aircraft traveling from airport to airport in the United States under 19 CFR 122, Subpart I, which covers procedures for residue cargo and stopover passengers. See 19 CFR 122.41. Pursuant to 19 CFR 122.26, private aircraft are not required to formally enter. Instead of filing an entry summary, private aircraft are required to have manifest data for each individual onboard and departure information submitted to CBP no later than 60 minutes prior to departure. See 19 C.F.R. §§ 122.22, 122.26-27. A “private aircraft” is any aircraft engaged in a personal or business flight to or from the U.S. which is not: (1) Carrying passengers and/or cargo for commercial purposes; (2) Leaving the U.S. carrying neither passengers nor cargo in order to lade passengers and/or cargo in a foreign area for commercial purposes; or (3) Returning to the U.S. carrying neither passengers nor cargo in ballast after leaving with passengers and/or cargo for commercial purposes. 19 C.F.R. § 122.1(h). From Peregrine’s description in the ruling request of its entry process of the aircraft before and upon arrival in the U.S., i.e., submitting the passenger manifest and notice of arrival at least 60 minutes before arrival in the U.S. pursuant to 19 C.F.R.§ 122.22(b)(1)-(3) and b(4), respectively, it is clear that Bellingham was treating Peregrine’s aircraft as “private.” We discuss below the applicability of a carnet for the LIDAR as well as whether that treatment should continue. A. Carnet Applicability Pursuant to 19 U.S.C. § 1401(c), the word “merchandise” means goods, wares, and chattels of every description and includes merchandise the importation of which is prohibited, and monetary instruments as defined in 31 U.S.C. § 5312. It is well settled that “merchandise” does not include the equipment of a vessel so long as it is used by that vessel, and that such articles have been defined as those which are “necessary and appropriate for the navigation, operation or maintenance of the vessel and for the comfort and safety of the persons on board.” See HQ 114298 (July 7, 1998), quoting Treasury Decision 49815(4) (Mar. 13, 1939). However, 19 U.S.C. § 1446 provides that any equipment landed and delivered from a vessel arriving in the United States from a foreign port shall be considered and treated as imported merchandise. Conversely, any equipment retained onboard is not dutiable. See id. Additionally, civil aircraft must comply with the laws and regulations relating to the entry and clearance of vessels made applicable by regulation to aircraft. See 19 U.S.C. § 1644. Therefore, 19 U.S.C. § 1446 is applicable to aircraft arriving in the United States from any foreign area. See also 19 C.F.R. § 122.47(d). As Peregrine’s aircraft arrives in the U.S. from a foreign area, 19 U.S.C. § 1446 will apply to Peregrine’s aircraft. See 19 U.S.C. § 1644. A carnet is a type of CBP document that serves simultaneously as a CBP entry document and bond. See 19 C.F.R. § 114.3(a). Therefore, if the LIDAR qualifies as aircraft equipment and is retained onboard and not landed and delivered, a carnet would be inapplicable for the LIDAR as no duty would attach, and therefore, no bond would be required. See 19 C.F.R. § 114.0. in other words, the LIDAR would not be treated as imported merchandise. See 19 U.S.C. § 1446. Here, the purpose of Peregrine’s aircraft’s is to perform photographic survey operations. Peregrine’s aircraft’s operations are completed using LiDAR equipment. Therefore, it is our position that the LiDAR is to be considered aircraft equipment. See 19 U.S.C. §§ 1446, 1644. As stated in the facts, the LIDAR is not landed nor is it delivered to a U.S. location. Therefore, the LIDAR as non-landed and non-delivered aircraft equipment is not imported merchandise and is non-dutiable. See 19 U.S.C. § 1446. A carnet for the LIDAR is therefore inapplicable. See 19 C.F.R. § 114.0. B. “Commercial Cargo” and “Private Aircraft” Consideration As above, if Peregrine’s aircraft carries commercial cargo, it cannot be considered “private aircraft.” 19 C.F.R. § 122.1(h). Therefore, if the LIDAR, as “equipment” pursuant to 19 U.S.C. § 1446, is also commercial cargo, then Peregrine’s aircraft will not be considered “private aircraft.” Id. 19 C.F.R. § 24.24(b)(2) concerns the payment of the harbor maintenance fee (“HMF”) for vessels and defines commercial cargo as: “[M]erchandise transported on a commercial vessel and passengers transported for compensation or hire. Whenever the term “cargo” is used, it means merchandise, but not passengers.” 19 C.F.R. § 24.24(c)(1) exempts “vessel equipment” from the HMF and, therefore, from consideration as commercial cargo. Accordingly, pursuant to 19 U.S.C. § 1644, the understanding of vessel equipment as exempt from the HMF, and therefore, from consideration as commercial cargo, extends to aircraft equipment. As the LIDAR is aircraft equipment, it also cannot qualify as commercial cargo. See C.F.R. § 24.24(c)(1); see also 19 U.S.C. § 1644, 19 C.F.R. § 122.2. Furthermore, as stated in the facts, Peregrine’s aircraft do not carry passengers. Therefore, as Peregrine’s aircraft does not carry passengers or cargo for commercial reasons, Peregrine’s aircraft may continue to be considered as “private” pursuant to 19 C.F.R. § 122.26. See also 19 C.F.R. § 122.1(h). HOLDING: Peregrine’s LIDAR is the legitimate equipment of Peregrine’s aircraft and will not be landed or delivered. Therefore, no duty nor entry requirements will attach to the LIDAR, making a carnet inapplicable. Additionally, Peregrine’s aircraft with the LIDAR installed are to be considered “private aircraft” pursuant to 19 C.F.R. § 122.26. Formal entry of Peregrine’s aircraft is not required. Sincerely, Monika Brenner, Interim Chief Entry Process and Duty Refunds Branch