BOR-4-07-RR:IT:EC 115684 LLO
CATEGORY:
Joel Goldman
Uniplast Industries, Inc.
P.O. Box 2367
South Hackensack, New Jersey 07606
RE: Instruments of International Traffic; Plastic Garment Hangers, 19
U.S.C. §1322;19 C.F.R. §10.41a
Dear Mr. Goldman:
We received your request for a ruling to designate specifically described plastic garment hangers as instruments of international traffic under 19 U.S.C. §1322. Our ruling on the matter is set forth below.
FACTS:
You indicate that you intend to sell plastic garment hangers with wire swivel hooks that have been manufactured in China and Turkey to garment factories in the Dominican Republic, Guatemala, and other locations in the Caribbean Basin. You state that in all cases the imported hangers would first be received into the U.S., and U.S. duty would be paid.
You indicate that the hangers described are to be used to package garments which are then exported to the U.S., are suitable for repeated use, and are used in significant numbers in international traffic. You state that these same type hangers are part of a reuse program in the U.S.
ISSUE:
Whether the described plastic garment hangers may be considered instruments of international traffic within the meaning of title 19 U.S.C. §1322 and 19 C.F.R. §10.41a.
LAW AND ANALYSIS:
Title 19 U.S.C. §1322(a), provides that “vehicles and other instruments of international traffic (hereafter IIT), of any class specified by the Secretary of Treasury, shall be granted the customary exceptions from the application of the Customs laws to the extent and subject to such terms and conditions as may be prescribed in regulations or instructions of the Secretary of Treasury.”
The Customs regulations issued under the authority of 19 U.S.C. §1322 are in title 19 C.F.R. §10.41a. Paragraph (a)(1) of section 10.41a designates as IIT certain named articles and states that other articles may be designated as IIT by the Commissioner of Customs in decisions to be published in the weekly Customs Bulletin. Such IIT may be released without entry of the payment of duty, subject to the provisions of section 10.41a
To qualify as an IIT within the meaning of 19 U.S.C. §1322(a), and the regulations issued thereunder an article must meet the following requirements:
-be used as a container or holder;
-substantial;
-suitable for and capable of repeated use;
-and used in significant numbers in international traffic.
In Holly Stores, Inc. v. U.S., 697 F.2d 1387 (Fed. Circuit 1982) the subject merchandise was plastic hangers. The court in Holly Stores characterized the plastic clothes hangers as “shipping holders.” Thus, as characterized by the Holly Stores case, the subject merchandise can be classified as holders therein meeting the first prerequisite for being classified as an instrument of international traffic. The second prerequisite an item must meet to be classified as an instrument of international traffic is that it be substantial. In this case, the hangers act as a holder fit to ship clothes on and are constructed durably enough to support a garment, evidencing substantiality. The third prerequisite requires that the prospective instrument of international traffic be suitable for and capable of repeated use. In Holly Stores the court determined that “reuse” has been consistently interpreted to mean “practical, commercial reuse not incidental reuses.” Subsequent Customs rulings on this matter have held that a single use is not sufficient to constitute the “repeated use” requirement necessary to be deemed an instrument of international traffic; repeated use means more than two uses. The plastic garment hangers are suitable for and capable of repeated use, and according to the facts provided are part of a reuse program in the U.S.
The last prerequisite requires the subject merchandise to be used in significant numbers. In this case, no numbers were provided or evidence given to demonstrate the amount of hangers that are expected to be used in the flow of international traffic. As few as eight pieces of merchandise (HQ 111933) have been deemed significant enough in number to constitute instruments of international traffic. Assuming the hangers will be used in significant numbers, which is asserted in the request, the subject merchandise also meets the final prerequisite. Consequently, we find that the subject plastic garment hangers qualify as instruments of international traffic, pursuant to 19 U.S.C. §1322(a).
Since the plastic garment hangers will be designated as instruments of international traffic, they are not considered imported into the U.S., and are therefore not subject to the country of origin marking requirements of 19 U.S.C. §1304. It should be noted that if the plastic garment hangers are diverted from international traffic and are used domestically, they will cease to be considered instruments of international traffic.
HOLDING:
The subject plastic garment hangers used to transport garments are designated as instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 C.F.R. §10.41a.
Sincerely,
Jeremy Baskin
Acting Chief
Entry Procedures and Carriers Branch