BOR-4-07-R:IT:C 115754 GEV
P. Michael Lawrentz
President and Managing Director
Lawgix International, Inc.
824B U.S. Highway 42 N
Ashland, Ohio 44805
RE: Instruments of International Traffic; Flexible Intermediate Bulk Containers;
Subheading 9803.00.50, HTSUSA; 19 U.S.C. § 1322
Dear Mr. Lawrentz:
This is in response to your letter dated July 10, 2002, requesting a ruling that certain Flexible Intermediate Bulk Containers (FIBCs) are duty-free under subheading 9803.00.50, HTSUSA. Our ruling is set forth below.
FACTS:
Lawgix International, Inc., (“Lawgix”) will purchase FIBCs from Sanjut, a company located in Istanbul, Turkey, and store them in/near Ashland, Ohio. The FIBCs will be used continuously for the transportation of edible beans from the U.S. and Canada to the U.K.
Upon direction of the canner(s) in the U.K., Lawgix will ship a specified number of these FIBCs to a shipper/processor in the Michigan, Wisconsin, or the Ontario or Manitoba, Canada regions where the FIBCs will be filled with edible beans and exported to the U.K. Upon receipt of shipment, the FIBCs will be emptied and then collected for shipment back to the U.S. entering through Cleveland, Ohio. Lawgix will then clean and inspect the FIBCs in order to ready them for reuse. These FIBCs will be distributed in like manner to the shipper/processors to be filled with beans to be exported to the U.K. again. High density polyethylene “Slip Trays” will also be used under each bag for reuse in like manner. The cycle will continue to repeat itself. - 2 -
Included with your letter of July 10 is the following documentation: a list of canners in the U.K. (Exhibit A); a list of shippers/processors in Michigan, Wisconsin, and Canada (Exhibit B); specifications for four multi-use, 2-ton FIBCs (Exhibit C); a photograph of the FIBCs in question (Exhibit D); and a flow chart showing the recycling of these FIBCs for continued reuse (Exhibit E).
In regard to the specifications provided in Exhibit C, we note that among other things there will be four sizes of the FIBCs (43”x43”x80”, 42"x42"x82", 40”x40”x78”, and 38"x38"x82"), and all four models will be made of uncoated, woven, polypropylene, white opaque fabric sewn with polypropylene thread. Furthermore, all four models will have a safe working load of 4400 lbs. There will be approximately 18,000 FIBCs in use in any given year.
ISSUE:
Whether the FIBCs described above may be designated as instruments of international traffic within the meaning of 19 U.S.C.
§ 1322(a) and § 10.41a, Customs Regulations (19 CFR § 10.41a), and therefore classifiable under subheading 9803.00.50, HTSUSA..
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 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 § 10.41a.
- 3 -
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). Customs rulings on this matter have held that single use is not sufficient; reuse means more than twice (Headquarter rulings 105567 and 108658).
Upon reviewing your request and supporting documentation, we are of the opinion that the requisite criteria for designation of the subject FIBCs as instruments of international traffic have been met. In addition, Customs has previously ruled that certain articles of a similar use and construction as those FIBCs currently under consideration qualify as instruments of international traffic pursuant to 19 U.S.C.
§ 1322(a) and §10.41a, Customs Regulations (see Customs ruling letter 113531, dated August 31, 1995).
HOLDING:
The FIBCs described above are designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and
§ 10.41a, Customs Regulations (19 CFR §10.41a), and are therefore classifiable under subheading 9803.00.50, HTSUSA.
Sincerely,
Jeremy Baskin
Acting Chief
Entry Procedures and Carriers Branch