OT:RR:BSTC:CCR H252710 KLQ
Ms. Sunny Kim
James J. Boyle & Co.
1200 Corporate Center Dr. #350
Monterey Park, CA 91754
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1);
HTSUS subheading 9803.00.50; James J. Boyle & Company; plastic pallets.
Dear Ms. Kim:
This is in response to your March 21, 2014, ruling request which was referred to this branch on April 1, 2014. In your letter, you request a ruling concerning whether certain plastic pallets qualify as instruments of international traffic (IIT) and are therefore, classifiable under subheading 9803.00.50 of the Harmonized Tariff Schedule of the United States (HTSUS). Our decision follows.
FACTS
The following facts are from your ruling request. The subject pallets are made of reinforced plastic and weigh 30 kilograms each. The pallets are used to transport coil. The subject pallets will transport the coil from Japan through New Orleans, Louisiana, for delivery to Chicago, Illinois. In Chicago, the merchandise will be removed from the pallets, and the pallets will be returned to Japan for re-use in future shipments. Below are images of the subject pallets.
ISSUE
Whether the subject plastic pallets are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
LAW AND ANALYSIS
Pursuant to 19 U.S.C. § 1322(a), IITs shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. The relevant Customs and Border Protection (CBP) regulations implementing that statute are found at 19 C.F.R. § 10.41a(a)(1) which provides in pertinent part:
Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics, arriving (whether loaded or empty) in use or to be used in the shipment of merchandise in international traffic are hereby designated as “instruments of international traffic” [. . .] The Commissioner of Customs [now CBP] is authorized to designate as instruments of international traffic […] such additional articles or classes of articles as he shall find should be so designated.
19 C.F.R. § 10.41a(a)(1)(emphasis added).
Such instruments may be released without entry or the payment of duty, subject to the provisions of this section.
Subheading 9803.00.50, HTSUS provides for the duty-free treatment of:
Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing merchandise), or if of foreign production and previously imported and duty (if any) thereon paid, or if of a class specified by the Secretary of the Treasury as instruments of international traffic, repair components for containers of foreign production which are instruments of international traffic, and accessories and equipment for such containers, whether the accessories and equipment are imported with a container to be reexported separately or with another container, or imported separately to be reexported with a container.
(footnote and emphasis added). Subchapter 98 of the HTSUS only applies to:
(a) Substantial containers or holders which are subject to tariff treatment as imported articles and are:
(i) Imported empty and not within the purview of a provision which specifically exempts them from duty; or
(ii) Imported containing or holding articles, and which are not of a kind normally sold therewith or are entered separately therefrom; and
(b) Certain repair components, accessories and equipment.
See U.S. Note 1, et seq., Chapter 98, HTSUS.
Pursuant to 19 C.F.R. § 10.41a(a)(1), pallets are per se IITs. In HQ H119060 (Nov. 9, 2010), CBP held that “pallets have already been designated as an instrument of international traffic by regulation. See 19 C.F.R. § 10.41a(a).” Based on the foregoing, the subject plastic pallets are IITs; therefore, they will qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and HTSUS subheading 9803.00.50.
HOLDING
The subject plastic pallets are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection