BOR-4-07-OT:RR:BSTC:CCI H044900 JLB
Mr. Herbert J. Lynch
Sullivan & Lynch, P.C.
56 Roland Street, Suite 303
Boston, Massachusetts 02129-1223
RE: Instruments of International Traffic; Accessories; Equipment; PT100-C Tracker; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a
Dear Mr. Lynch:
This is in response to your correspondence of November 14, 2008, on behalf of Bose Corporation, in which you requested a ruling that PT100-C tracking devices are 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
Bose Corporation designs and manufactures highly acclaimed audio products. The corporation markets these audio products throughout the world and has manufacturing facilities in the United States, Canada, Ireland and Mexico. Due to the nature of its products, including high-end consumer electronics, Bose Corporation must constantly combat the possibility of container intrusion and theft. Thus, Bose Corporation wishes to use an enhanced container-security monitoring and tracking device developed by Sendum Corporation of Burnaby, British Columbia. Sendum’s Tracker PT100-C is a small wireless tracking device which utilizes GPS satellite technology. It does not have an external antenna and can be easily installed and hidden in a container. The device is rugged, portable and capable of repeated use. Bose Corporation intends to install and hide the PT100-C Tracker in intermodal containers carrying Bose Corporation’s goods into the United States from facilities in Mexico, Canada and Ireland. The Bose Corporation will then be able to track and monitor the movement of the container to ensure against intrusion. Once the container arrives safely at its destination, the tracking device is removed and installed in other Bose Corporation containers in international traffic. The tracker will be used in significant numbers in international traffic. On the Mexico-United States border alone, the Bose Corporation averages approximately five to eight intermodal container entries per day.
ISSUE
Whether the PT100-C tracking devices 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.” This includes “the normal accessories and equipment imported with any such instrument which is a container as defined in Article 1 of the Customs Convention on Containers.” 19 C.F.R. § 10.41a(a)(3). 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 116032, dated October 30, 2003; Headquarters Ruling Letter 116391, dated February 16, 2005; Headquarters Ruling Letter 115754, dated August 19, 2002.
In regard to the containers in which the PT100-C tracking devices will be installed, it is well settled that intermodal cargo containers qualify as “instruments of international traffic.” See, e.g., Headquarters Ruling Letter 113003, dated January 27, 1994 (intermodal cargo containers qualify as “instruments of
international traffic”); Headquarters Ruling Letter 116684, dated August 17, 2006 (CBP specifically held that intermodal shipping containers are “instruments of international traffic”). Accordingly, these containers are “instruments of international traffic” pursuant to 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a and therefore may be released without entry or payment of duty.
With respect to the PT100-C tracking devices themselves which are not containers, we note that accessories and equipment for instruments of international traffic containers are addressed in 19 C.F.R. § 10.41a(a)(3) which provides:
“As used in this section, ‘instruments of international traffic’ includes the normal accessories and equipment imported with any such instrument which is a ‘container’ as defined in Article 1 of the Customs Convention on Containers.”
The Customs Convention on Containers defines the term “container” as an:
…..article of transport equipment (lift-van, movable tank or other similar structure):
(i) fully or partially enclosed to constitute a compartment intended for containing goods;
(ii) of a permanent character and accordingly strong enough to be suitable for repeated use;
(iii) specially designed to facilitate the carriage of goods, by one or more modes of transport, without intermediate reloading;
(iv) designed for ready handling, particularly when being transferred from one mode of transport to another;
(v) designed to be easy to fill and to empty; and
(vi) having an internal volume of one cubic metre or more;
the term “container” shall include the accessories and equipment of the container, appropriate for the type concerned, provided that such accessories and equipment are carried with the container. The term “container” shall not include vehicles, accessories or spare parts of vehicles, or packaging. Demountable bodies, are to be treated as containers;
Customs Convention on Containers, 1972, Ch. 1, Art. 1(c), et seq.
It is readily apparent that the intermodal cargo containers in question qualify as “containers” as defined in the Customs Convention on Containers. The cargo containers are enclosed, of a permanent character, designed to facilitate the
carriage of goods and ready handling of such goods, designed to be easily filled and emptied and have an internal volume of one cubic metre or more. In fact, CBP has previously held that intermodal cargo containers qualify as “containers” under the Convention. See Headquarters Ruling Letter 116684, dated August 17, 2006. Consequently, the provisions of 19 C.F.R. § 10.41a(a)(3) are applicable in this case.
In determining whether the PT100-C Tracker is an accessory or equipment for an instrument of international traffic pursuant to 19 C.F.R. § 10.41a(a)(3) and therefore entitled to treatment under 19 C.F.R. § 10.41a(a)(1), the following factors must be met: the product must be substantial; suitable for and capable of repeated use with containers that are instruments of international traffic; used in significant numbers in international traffic; and imported with containers that qualify as instruments of international traffic. See, e.g., Headquarters Ruling Letter H004789, dated January 12, 2007; Headquarters Ruling Letter W116719, dated November 30, 2006; Headquarters Ruling Letter 116288, dated August 12, 2004.
Upon reviewing the request, the PT100-C tracking devices appear to be substantial, suitable for and capable of repeated use with the cargo containers, and used in significant numbers in international traffic. The PT100-C Tracker is rugged, portable and imported with the subject intermodal cargo containers. Once a container arrives safely at its destination, the tracking device is removed and re-installed in another Bose Corporation container in international traffic. Along the Mexico-United States border alone, the Bose Corporation averages approximately five to eight intermodal container entries a day, therefore, the PT100-C tracking devices are used in significant numbers in international traffic.
In the present case, we find that the PT100-C tracking devices are accessories or equipment of intermodal cargo containers that are instruments of international traffic. We note CBP previously concluded tracking devices such as acceleration-measuring devices, container security units, and tamper-resistant embedded controllers constitute accessories or equipment within the meaning of 19 C.F.R. § 10.41a(a)(3). See Headquarters Ruling Letter H005096, dated March 12, 2007 (a Tamper-Resistant Embedded Controller (“TREC”), which is an enhanced container-security, monitoring and tracking device that is mounted in intermodal containers to collect and report data such as the status, condition and location of the container and its contents, may not be designated as an “instrument of international traffic” under 19 C.F.R. § 10.41a(a)(1) in and of itself because it is not a substantial container or holder of merchandise but it may be designated an accessory to an instrument of international traffic container under 19 C.F.R. § 10.41a(a)(3) and thereby entitled to treatment as such under 19 C.F.R. § 10.41a(a)(1)); Headquarters Ruling Letter H016914, dated December 11, 2007 (tracking devices affixed to intermodal flat racks to import low-enriched uranium from Europe to the United States are accessories to instruments of international traffic); see also Headquarters Ruling Letter 116684, dated August 17, 2006 (tamper-resistant embedded controllers are accessories or equipment to intermodal cargo containers and qualify as “instruments of international traffic”); Headquarters Ruling Letter 116575, dated January 26, 2006 (shock/climate measuring devices were designated accessories of instruments of international traffic for intermodal containers given that they were designed for and will be used with the containers).
Accordingly, as discussed above, the PT100-C tracking devices constitute accessories or equipment of instruments of international traffic pursuant to 19 C.F.R. § 10.41a(a)(3) and are therefore designated as instruments of international traffic pursuant to 19 C.F.R. § 10.41a(a)(1). In those instances where the subject tracking devices are imported separately from the containers, entry of the devices, together with a declaration of intent to this effect, would be required in accordance with 19 C.F.R. § 10.41a(a)(2).
HOLDINGS
The PT100-C tracking devices 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.
Sincerely,
Glen E. Vereb, Chief
Cargo Security, Carriers and Immigration Branch