BOR-07-OT:RR:BSTC:CCR H276370 DAC
Lars-Erik A. Hjelm
Akin Gump Strauss Hauer & Feld LLP
1333 New Hampshire Ave. NW
Washington D.C. 20036-1564
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1),(2); HTSUS subheading 9803.00.50; Janssen Biotech, Inc. (“Janssen”); ThermoSafe Unit and interior components.
Dear Mr. Hjelm:
This is in response to your May 16, 2016, ruling request on behalf of Janssen Biotech, Inc. (“Janssen”), which we received on June 7, 2016. In your submission, you request a ruling concerning whether certain transport devices, identified by Janssen as ThermoSafe Units and its interior components, qualify as instruments of international traffic (IIT) and accessories of instruments of international traffic 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 and the exhibits attached. The subject articles are known as ThermoSafe Units and the accompanying interior components for such units. The ThermoSafe Units are originally manufactured in Beecher, Illinois, within the United States. The ThermoSafe Units are used by Janssen to transport products that must have a temperature controlled environment, to include bulk pharmaceutical ingredients, excipients, reagents, and mixtures in a frozen or cooled state. The ThermoSafe Units resemble cabinets with shelves and a door. The subject interior components include carboy shelving, dry ice trays and partitions made from 14 gauge 304 stainless steel. The ThermoSafe Unit’s outer shell is made of molded polyethylene and three inch thick polyurethane walls, with a one piece door also made of molded polyethylene and three inch thick polyurethane. The ThermoSafe Units have exterior dimensions of 39 x 38.5 x 59.5 inches (L x W x H). Janssen currently has one hundred seventy-five (175) ThermoSafe Units in inventory that are each expected to be used between three and five times per year. The estimated useful life of the ThermoSafe Units is fifteen years.
The ThermoSafe Units interior shelving may be adjusted to accommodate transporting merchandise of various sizes. The ThermoSafe Unit uses approximately 300 pounds of dry ice per shipment and can hold up to twelve ten liter bottles. The subject ThermoSafe Units each have individual serial number plates that are used for Janssen Biotech to track the individual units within the international transportation cycle. The subject ThermoSafe Units are to be used in international traffic between the United States, Ireland, The Netherlands, Singapore, and Switzerland, and Janssen Biotech facilities located in Malvern, Pennsylvania; St. Louis, Missouri; McPherson, Kansas; Morrisville, North Carolina; Blommington, Indiana; and Gurabo, Puerto Rico.
Below are images you provided of the subject ThermoSafe Unit.
ThermoSafe Unit with shipment inside.
ThermoSafe Unit (door closed). ThermoSafe Unit (door open).
Interior of ThermoSafe Unit. Interior Components - Dry Ice Tray.
Interior Components – Carboy Tray. ThermoSafe Unit Serial Number Plate.
ISSUES
Whether the subject ThermoSafe Units are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Whether the subject ThermoSafe Unit interior components are accessories of IITs within the meaning of 19 C.F.R. § 10.41a(a)(2).
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.
ISSUE 1
Pursuant to 19 C.F.R. § 10.41a(a)(1), “[t]he Commissioner of Customs [currently 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.” See 19 C.F.R. § 10.41a(a). We note that in regards to temperature controlled transportation units, in HQ H253807 (June 27, 2014), CBP held that, “[t]he subject GTC4L, GTC12L, GTC28L, GTC56L boxes are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), and [t]he subject VIP-tainers are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1);” see also HQ H218509 (July 30, 2012) holding that “[t]he subject “ITS-RSC” temperature control containers, … are hereby designated as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1).” See H167475 (July 20, 2011).
Based upon review of the submission and information provided, the subject ThermoSafe Units are containers that are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. The articles have an estimated useful life of fifteen years and approximately 175 units are to be used in international traffic. Based on the foregoing, the subject ThermoSafe Units are designated as 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.
ISSUE 2
Pursuant to 19 C.F.R. § 10.41a(a)(2), “[r]epair components, accessories, and equipment for any container of foreign production which is an instrument of international traffic may be entered or withdrawn from warehouse for consumption without the deposit of duty if the person making the entry or withdrawal from warehouse files a declaration that the repair component was imported to be used in the repair of a container of foreign production which is an instrument of international traffic, or that the accessory or equipment is for a container of foreign production which is an instrument of international traffic. The port director must be satisfied that the importer of the repair component, accessory, or equipment had the declared intention at the time of importation.”
19 C.F.R. § 10.41a(a)(2)(emphasis added).
The subject ThermoSafe Unit interior components are devices that are instrumental in use along with the ThermoSafe Units for the transportation of merchandise. In regards to such interior components, in HQ H218509 (July 30, 2012), CBP held that, “[t]he accompanying articles designated as the R36 Freeze Rack and the Thermal Regulating Unit (TRU) are integral to maintaining the desired temperature control of such containers and are accordingly designated as ‘accessories’ of ‘instruments of international traffic.’” Based on the foregoing, the subject interior components are designated as accessories of IITs; therefore they may be entered duty-free as accessories of instruments of international traffic within the meaning of 19 CFR § 10.41a(a)(2).
HOLDING
The subject ThermoSafe Units are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
The subject ThermoSafe Unit interior components are accessories of IITs within the meaning of 19 C.F.R. § 10.41a(a)(2).
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of Trade, Regulations and Rulings
U.S. Customs and Border Protection