BOR-7-RR:IT:EC 114506 LLB
Ms. Barbara Dawley
330 Madison Avenue
39th Floor
New York, New York 10017
RE: Instrument of International Traffic; Plastic tote boxes;
Holders for automobile parts; 19 U.S.C. 1322(a); 19 CFR
10.41a
Dear Ms. Dawley:
Reference is made to your letter of October 6, 1998, in
which you request that we rule upon the designation of certain
so-called "orikon tote boxes" as Instruments of International
Traffic. Our ruling follows.
FACTS:
A company known as Denso Sales California, Inc., is an
importer of automotive parts. The company uses four types of
containers known as totes to ship various small automobile
replacement parts from Japan into the United States. The totes
are used in conjunction with components known as plastic slip
sheets and cloth straps. Each fully assembled tote actually
consists of a series of plastic trays into which are placed
automobile parts such as hoses, connectors, and bolt kits. The
trays are stacked either three or four high, and each such stack
is separated from a similarly configured stack by a plastic slip
sheet. The slip sheets are constructed such that the assembled
units may be moved with the use of forklifts. Each stack is
secured and held together as a unit by use of the cloth straps
which are made of nylon and are fitted with metal rings. It is
stated that the totes have a useful life span of some ten years
in use. The tote trays are marked with the company name and an
alpha-numeric designation depending upon which of the four types
it might represent (C-1, C-3, C-4, or C-A). After use in
transporting parts into the United States, the units are broken
down and strapped together as appropriate before being sent back
to Japan empty for further use in importing parts.
ISSUE:
Whether the described articles qualify for designation as
Instruments of International Traffic, thus permitting their
repeated introduction into the United States without the need for
entry and duty payment.
LAW AND ANALYSIS:
Title 19, United States Code, section 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
section 322(a) are contained in section 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 section 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 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).
HOLDING:
Following a thorough consideration of the evidence
presented, as well as an analysis of the law and applicable
precedents, we have determined that the orikon tote boxes
including the associated plastic slip sheets and cloth straps
submitted for our consideration, meet the requirements necessary
for designation as Instruments of International Traffic.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers Branch