BOR-7-07-CO:R:IT:C 113157 GEV
Bruce N. Shulman, Esq.
Stein Shostak Shostak & O'Hara
1620 L Street, N.W.
Washington, D.C. 20036-5605
RE: Instruments of International Traffic; Skids; Totes;
19 U.S.C. 1322
Dear Mr. Shulman:
This is in response to your letter dated June 6, 1994,
requesting that certain skids, and plastic and metal totes which
your client uses to ship industrial control components, be
designated as instruments of international traffic pursuant to 19
U.S.C. 1322 and 19 CFR 10.41a. Our ruling on this matter is
set forth below.
FACTS:
Allen-Bradley Company ("Allen-Bradley") of Milwaukee,
Wisconsin, uses certain skids, and plastic and metal totes to
ship industrial control component parts, consisting of screws,
nuts, washers, spacers and miscellaneous fabricated components
made in its Milwaukee facility, to its subsidiary plants in
Mexico and Canada. The subsidiaries use these components to
build various subassemblies used in Allen-Bradley's industrial
control products.
These completed subassemblies are then re-packaged in these
various shipping containers and returned to Milwaukee, where they
are incorporated into Allen-Bradley's industrial control
products.
The skids, which have welded steel frames with hardwood
panels inserted therein, measure 36" long, 30" wide, and 7" high.
The metal totes measure approximately 19 1/2" long and 11 1/2"
wide, and come in three different heights: 4 1/8"; 6", and;
7 15/16". The plastic totes measure approximately 20" long, 11"
wide, and 5 1/2" high.
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Further in regard to the plastic totes, it is stated that
although they were originally manufactured in Canada, they are
currently being manufactured in the United States. However, the
original mold, which references the origin of the totes as being
Canadian, is still being used.
Thousands of the aforementioned skids and totes have been
produced and are currently in use. Approximately 100 skids per
week are shipped between the United States, Canada and Mexico,
with each skid containing 50 totes. Copies of drawings and
specifications for these articles were enclosed with the ruling
request.
ISSUE:
Whether the skids and totes under consideration which are
used to ship industrial control components are instruments of
international traffic within the meaning of 19 U.S.C. 1322(a)
and 10.41a, Customs Regulations (19 CFR 10.41a).
LAW AND ANALYSIS:
Title 19, United States Code, 1322(a) (19 U.S.C.
1322(a)), provides that "[v]ehicles and other instruments of
international traffic, of any class specified by the Secretary of
the Treasury, 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."
The Customs Regulations issued under the authority of
322(a) are contained in 10.41a (19 CFR 10.41a). Section
10.41a(a)(1) specifically designates lift vans, cargo vans,
shipping tanks, skids, pallets, caul boards, and cores for
textile fabrics as instruments of international traffic.
Section 10.41a(a)(1) also authorizes the Commissioner of
Customs to designate other items as instruments of international
traffic in decisions to be published in the weekly Customs
Bulletin. Once designated as instruments of international
traffic, these items may be released without entry or the payment
of duty, subject to the provisions of 10.41a.
To qualify as an "instrument of international traffic"
within the meaning of 19 U.S.C. 1322(a) and the regulation
promulgated pursuant thereto (19 CFR 10.41a et seq.), an
article must be used as a container or holder. The article must
be substantial, suitable for and capable of repeated use, and
used in significant numbers in international traffic. (See - 3 -
subheading 9803.00.50, Harmonized Tariff Schedule of the United
States Annotated (HTSUSA), and former Headnote 6(b)(ii), Tariff
Schedules of the United States (HTSUS), as well as Headquarters
Decisions 104766; 108084; 108658; 109665; and 109702).
The concept of reuse contemplated above is for commercial
shipping or transportation purposes, and not incidental or
fugitive uses. Tariff Classification Study, Sixth Supplemental
Report (May 23, 1963) at 99. See Holly Stores, Inc. v. United
States, 697 F.2d 1387 (Federal Circuit, 1982).
In Holly Stores, supra, the court determined that "reuse" in
the context of former General Headnote 6(b)(ii) "has been
consistently interpreted to mean practical, commercial reuse, not
incidental reuse." (Emphasis added). In that case, articles of
clothing were shipped into this country on wire or plastic coat
hangers. Evidence showed that the hangers were designed to be,
and were of fairly durable construction and that it would be
physically possible to reuse them. However, the court found that
only about one percent of the hangers were reused in any way at
all, and that those uses were of a noncommercial nature. The
court held that the uses of these hangers beyond shipping them
once from overseas to the United States were purely incidental,
and concluded that the hangers were "not designed for, or capable
of, reuse". Subsequent Customs rulings on this matter have held
that single use is not sufficient; reuse means more than twice
(Headquarter rulings 105567 and 108658). Furthermore, it is our
position that the burden of proof to establish reuse is on the
applicant, even though the applicant may not be the party reusing
the instrument.
Upon reviewing Allen-Bradley's request and the accompanying
documentation, we have determined that the above requirements for
designation as an instrument of international traffic have been
met with respect to the skids, and plastic and metal totes in
question.
Parenthetically, we note that notwithstanding our above
determination, the plastic totes that are currently manufactured
in the United States yet reference Canada as their country of
origin are incorrectly marked pursuant to 15 U.S.C. 1125. As
products of the United States these articles need no country of
origin designation. Consequently, the "Made in Canada" legend
appearing on them should be removed.
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HOLDING:
The skids, and plastic and metal totes under consideration
which are used to ship industrial control components are
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and 10.41a, Customs Regulations (19 CFR
10.41a).
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch