BOR-4-07 RR:IT:EC 115974 CK
Traci L. Grever, Esq.
Crowell Moring LLP
1001 Pennsylvania Ave, NW Washington, DC 20004-2595
RE: Thermal blankets as instruments of international traffic; 19 CFR §10.41a;
19 U.S.C. §1322(a)
Dear Ms. Grever:
This is in response to your ruling request on behalf of your client, AstraZeneca Pharmaceuticals LP (“AstraZeneca”) dated April 16, 2003. You request a ruling designating AstraZeneca’s thermal blankets as instruments of international traffic.
FACTS:
AstraZeneca imports pharmaceutical preparations that are packaged in either vials or pre-filled syringes. These vials and syringes are packed in trays and then placed in shipping boxes, which are then stacked on wooden pallets for transport. The pharmaceutical preparations are highly susceptible to changes in temperature, and must remain within a specific Fahrenheit range or they will decompose. To maintain the quality of the pharmaceutical preparations during transport AstraZeneca will utilize various temperature management systems: temperature controlled ocean containers, in flight temperature managed cargo holds, and local temperature controlled trucking. However, there will be points during the transportation when the pharmaceutical preparations will be exposed to ambient temperatures, such as the loading or offloading of a plane. In those situations and in the case of a temperature control malfunction AstraZeneca will use an insulated covering, known as a thermal blanket, to protect the pharmaceutical preparations during transport.
The thermal blanket is made of a three-layer material: a reflective layer, fiber filler, and a PVC outer layer. The blanket covers the entire shipment of pharmaceutical preparations with three panels- a bottom, a top, and a side panel that wraps around all four sides. To prepare a shipment, the bottom panel is placed on a standard wooden pallet and the shipping boxes containing the product are stacked on top. Cardboard edges bracket the top of the stack and the stack is wrapped in plastic wrap. The bottom of the thermal blanket is attached to the pallet by wrapping the ends around the bottom of the box and securing them with velcro, and the stack is then strapped to the pallet. The side panel is then wrapped around the stack and fastened at one corner via velcro and built-in fasteners. The top panel is fastened down and additional plastic sheeting keeps the thermal blanket clean. The covered pharmaceutical preparations are then strapped to the wooden pallet. The wooden pallets are then either moved in temperature controlled ocean containers, or moved in temperature controlled trucks to an airline for transportation. All freight carriers are required to set temperatures to predetermined specific ranges. Again, the thermal blankets will insulate the pharmaceutical preparations from excessive temperature exposure during transition from one temperature managed system to another or if one of those systems should malfunction.
The thermal blankets were custom made, and hundreds were ordered. Each blanket costs many hundreds of dollars and has a useful life of about three years. All blanket components have serial numbers that will be listed on the transport documentation accompanying the shipments. AstraZeneca plans on weekly shipments, each with its own thermal blankets, through various ports, and will return the empty units for use with other shipments.
ISSUE:
Whether the thermal blankets 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).
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.
To qualify as an "instrument of international traffic" (IIT) 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).
CBP has previously held that flexible intermediate bulk containers (FIBC) used to transport dry beans to the United States qualify as IITs. See, HQ 115754, dated August 19, 2002; HQ 114863, dated January 12, 2000; and HQ 113531, dated August 31, 1995.
CBP has also held that similar containers to the FIBC, polypropylene bags, qualify as IITs. See, e.g., Treasury Decision (T.D.) 76-171; HQ 109696, dated September 12, 1988; HQ 113220, dated September 28, 1994; HQ 113470, dated April 25, 1995; HQ 113916, dated July 2, 1997; HQ 114418, dated September 23, 1998; and HQ 114238, dated October 23, 1998.
In HQ 115503, dated May 30, 2000, CBP held that hard plastic boxes used to ship integrated circuit wafers qualified as IITs. In HQ 114506, dated October 29, 1998, CBP determined that containers made of plastic known as totes that were used to ship various small automobile replacement parts from Japan to United States met the requirements necessary for designation as instruments of international traffic. In HQ 112534, dated January 25, 1993, CBP found that reusable plastic boxes designed to transport automotive strut components qualified as instruments of international traffic.
Most important to the subject case, CBP has held that articles which consist of pallets and tops, plastic outer rings, plastic and cardboard pads, and form trays used to transport ceramic logs qualified as IITs when these parts were assembled together. See, HQ 115108, dated August 24, 2000. Consequently, since the blankets in this case form a cube encompassing the pharmaceutical preparations, with the cube consisting of three panels- a bottom, a top, and a side panel that wraps around all four sides which keep the pharmaceutical preparations cushioned and temperature controlled, they possess the requisite criteria as described above to qualify as IITs pursuant to 19 U.S.C. § 1322(a).
HOLDING:
The thermal blankets described above qualify as instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and may be released pursuant to 19 CFR § 10.41a.
Sincerely,
Glen E. Vereb
Chief
Entry Procedures and Carriers Branch