BOR-4-07-OT:RR:BSTC:CCR H266817 WRB
Mr. Matthew Clark
Director, Import Services
SEKO Customs Brokerage, Inc.
1100 Arlington Heights Road
Itasca, IL 60143
RE: Instruments of International Traffic; Gamesa Wind US, LLC; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a.
Dear Mr. Clark:
This is in response to your June 12, 2015, ruling request on behalf of your client, Gamesa Wind US, LLC. In your request you inquire whether certain wind turbine nacelle pallets qualify as “Instruments of International Traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. Our ruling is set forth below.
FACTS
The following facts are from your ruling request and supplements thereto. Gamesa Wind US, LLC, (Gamesa) imports wind turbines. Wind turbines are imported disassembled due to the weights and dimensions of the individual components, and are composed of the tower, the nacelle, the hub and the blades.
The nacelle component is shipped individually on a nacelle pallet, composed of one ring and two catamarans. The nacelle is mounted and secured on the nacelle pallet. The nacelle pallets are made of heavy-duty, welded steel, with welded or bolted joints and connections, specifically for transport of the nacelle. The typical life-cycle of a nacelle pallet is estimated to be in excess of 10 years unless it sustains significant unrepairable damage. Gamesa estimates that there are approximately 1000 nacelle pallets in use. Most nacelle pallets are serialized, and Gamesa in the process of serializing the remainder. Serial number data will be noted on shipping documents in the future.
Once imported, the nacelle pallet is used to transport and hold the nacelle until it is installed on the wind turbine unit at various locations in the United States, including, but not limited to, Ohio, North Carolina, New York, and West Virginia. The port of arrival varies depending on the location of the wind farm. Upon unloading, the nacelle pallet is exported to the manufacturer in either China or Spain, where it is re-used to transport more nacelles. The nacelle pallets are depicted in the photographs below, provided by Gamesa.
ISSUE
Whether the nacelle pallets described above qualify as “instruments of international traffic” (IITs) within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a?
LAW AND ANALYSIS
Gamesa asserts that the subject nacelle pallets may be classified under subheading 9803.00.50, Harmonized Tariff Schedule of the United States (HTSUS) because they qualify as IITs.
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. Such instruments may be released without entry or the payment of duty, subject to the provisions of this section.
19 C.F.R. § 10.41a(a)(1)(emphasis added).
To qualify for entry-free and duty-free treatment as IITs under the aforementioned statutory and regulatory authority, the article must be a substantial container or holder. As stated above, CBP is authorized to designate as an IIT such additional articles not specifically noted in 19 C.F.R. § 10.41a(a)(1). Historically, CBP has held in its published decisions that in order to qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), an article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See HQ H016491 (Oct. 1, 2007); HQ 114150 (Dec. 12, 1997); HQ 107545 (May 7, 1985); Treas. Dec. 71-159, Cust. B. & Dec. 296 (June 18, 1971); 99 Treas. Dec. 533, No. 56247 (Aug. 26, 1964). See also HQ H188300 (Jan. 6, 2012)(engine transportation stands for for transportation of aircraft jet engines).
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.
Upon reviewing the present matter, based on the information provided by Gamesa, the requisite criteria for designation of the subject nacelle pallets as instruments of international traffic have been met. As concerns the nacelle pallets described in the FACTS section above, they are substantial inasmuch as they are made of heavy-duty, welded steel, with welded or bolted joints and connections. Further, they are suitable for and capable of repeated use as they have a useful life in excess of 10 years and will be used up to 157 times annually. They are used in significant numbers in international traffic insofar as the current inventory of such nacelle pallets numbers approximately 1000. Based on the foregoing, the nacelle pallets described in the FACTS section above are IITs; therefore, they qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and 9803.00.50, HTSUS.
HOLDING
The subject nacelle pallets, described in the FACTS section above, 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
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection