BOR-4-07-OT:RR:BSTC:CCI H042107 JLB
Mr. James L. Sawyer
Drinker Biddle & Reath, LLP
191 North Wacker Drive
Suite 3700
Chicago, Illinois 60606-1698
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a
Dear Mr. Sawyer:
This is in response to your correspondence of October 17, 2008, on behalf of The Mainetti Group, in which you requested a ruling to classify plastic garment hangers as “instruments of international traffic” pursuant to 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. Our ruling on your request follows.
FACTS
The Mainetti Group sells new or used plastic garment hangers to garment factories to be used in the packing, shipping and transportation of future apparel to retail stores. The plastic garment hangers are primarily composed of molded plastic, and include both top hanger and bottom hanger styles. The top hanger style generally incorporates a drop at the lower middle portion through which a bottom hanger may be secured to facilitate the hanging of two-piece garments, as well as molded slots to allow for the placement of a garment with shoulder straps. The bottom hanger style is also made of clear plastic and incorporates a pinch grip to secure shorts, pants or skirts. The plastic garment hangers are manufactured in various locations throughout the world including China, Mexico, Guatemala, and the United States.
Additionally, the Mainetti Group has initiated a hanger recovery program in which, subsequent to the hangers’ use in retail operations, the hangers will be collected, and if identified for reuse, cleaned, packed, coded and exported. Hundreds of thousands of the subject plastic garment hangers, both those identified for reuse and newly manufactured hangers, are sold to garment vendors in China and other countries to be used to transport garments for importation to the United States. The estimated useful life of the subject hangers is between five and eight cycles and a single hanger will likely be used with various garments during its useful life. Through its recycling and sorting operations abroad, The Mainetti Group is able to segregate, as needed, new and recycled hangers when sold to a foreign garment manufacturer.
ISSUE
Whether the plastic garment hangers described above qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a?
LAW AND ANALYSIS
Pursuant to 19 U.S.C. § 1322(a), “vehicles and other instruments of international traffic, of any class specified by the Secretary of [Homeland Security], 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…” Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics are explicitly classified as “instruments of international traffic.” 19 C.F.R. § 10.41a(a)(1). Additionally, the Commissioner of U.S. Customs and Border Protection (“CBP”) is authorized to designate other items besides those mentioned as “instruments of international traffic.” Once designated as such, the instruments may be released without entry or payment of duty.
To qualify as an “instrument of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a, 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 Headquarters Ruling Letter 109665, dated September 12, 1988; Headquarters Ruling Letter 109634, dated August 11, 1988; see also Headquarters Ruling Letter 113687, dated February 27, 1997. The concept of reuse contemplated above is for commercial shipping or transportation purposes, and not incidental or fugitive uses. See Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at 99; see also Holly Stores, Inc. v. United States, 697 F.2d 1387, 1388 (Federal Cir., 1982). Reuse has been held to mean using the containers more than twice. See Headquarters Ruling Letter 112627, dated May 18, 1993; Headquarters Ruling Letter 111073, dated August 16, 1990; Headquarters Ruling Letter 116032, dated October 30, 2003.
It is well settled that plastic garment hangers can qualify as “instruments of international traffic.” In Holly Stores, Inc. v. United States, 697 F.2d 1387 (Fed. Circuit 1982), the court classified plastic garment hangers as shipping holders fit to ship clothes on, and stated that such hangers were of considerable durability to constitute “instruments of international traffic.” The only reason that the court found that the hangers did not constitute “instruments of international traffic” was because only about one percent of the hangers were reused in any manner at all, and those uses were noncommercial; thus the court concluded that the hangers were "not designed for, or capable of, reuse." We note that CBP has previously ruled on the “instruments of international traffic” status of hangers of similar material and purpose. In Headquarters Ruling Letter 115684, dated August 5, 2002, CBP held that plastic garment hangers with wire swivel hooks that are used to package garments for exportation to the U.S. are substantial, suitable for repeated use, used in significant numbers in international traffic and therefore, qualify as “instruments of international traffic.” Furthermore, CBP has previously held that hangers that are part of a hanger recovery program similar to the one initiated by The Mainetti Group constitute “instruments of international traffic.” See Headquarters Ruling Letter 114360, dated June 18, 1998 (used clear plastic garment hangers that were acquired in the U.S. from clothing retailers, sorted, sanitized, packaged and exported to garment manufacturers worldwide and then were used in the packaging of garments to be exported to the U.S. constitute “instruments of international traffic”).
Upon reviewing the request, the subject plastic garment hangers appear to be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. Furthermore, CBP has previously ruled that items of similar use and construction as those presently under consideration qualify as “instruments of international traffic” pursuant to 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. Accordingly, the plastic garment hangers qualify as “instruments of international traffic.” The instruments may be released without entry or payment of duty and are eligible for treatment under subheading 9803.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”).
HOLDING
The plastic garment hangers described above qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a and may be released without entry or the payment of duty.
Sincerely,
Glen E. Vereb, Chief
Cargo Security, Carriers and Immigration Branch