BOR-07-OT:RR:BSTC:CCR H290636 ASZ
Jon R. Weiner
U.S. & Canada Monitoring Leader
GE Global Operations
191 Rosa Parks Street
Cincinnati, Ohio 45202
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; GE Renewables North America, LLC; wind turbine blade holder sets; wind turbine tower holder sets.
Dear Mr. Weiner:
This is in response to your May 1, 2017 ruling request on behalf of GE Renewables North America, LLC (GE), which was referred to this branch by the National Commodity Specialist Division of U.S. Customs and Border Protection (CBP) for our direct response to you. In your submission, you request a ruling concerning whether certain wind turbine blade holder and tower holder sets 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 May 1, 2017 ruling request and September 29, 2017 e-mail to this office. GE imports blades and towers for wind turbines and uses two types of holders to transport these components.
Blade Holder Sets
Blades are imported into the United States for installation at various wind farm locations. The blades are attached to a blade holder set during transportation. After the transportation is complete, the blade holder sets are returned to overseas blade manufacturers in China, Vietnam, India, and Brazil for reassembly and reuse. A blade holder set is comprised of following components:
(1) GE Root: A welded steel frame that attaches to the blade hub via the Root pedal.
(2) GE Root pedal: A steel adaptor used to bolt the Root to the blade hub.
(3) X-brace: Steel beams that attach diagonally across the root for strength and support.
(4) GE Tip (stand): Steel frames that support and hold the blade tip.
(5) Leading edge protector: Fiberglass sleeves that protect the blade edges.
The blade holder sets are composed of steel, welded steel, and fiberglass. They are used approximately three to five times a year on a rotation schedule and have an estimated life expectancy of four years. GE has approximately 10,000 sets in circulation. The blade holder sets are serialized, and GE indicates that the holder sets will not enter domestic commerce. You provided this office with the specifications of the blade holder sets.
Below are images you provided of the assembled blade holder sets in use.
Tower Holder Sets
Towers are imported into the United States for installation at various wind farm locations. The towers are attached to a tower holder set during transportation. After the transportation is complete, the tower holder sets are returned to overseas tower manufacturers in South Korea for reassembly and reuse. Tower holder sets are comprised of boots, which are steel cradles that hold the tower sections, and steel beams, which are used to connect the boots.
The subject tower holder sets are composed of steel and welded steel. They are used approximately three to five times a year on a rotation schedule and have an estimated life expectancy of four years. GE has approximately 400 sets in circulation. The tower holder sets are serialized, and GE indicates that the holder sets will not enter domestic commerce. You provided this office with the specifications of the tower holder sets.
Below are images you provided of the assembled tower holder sets in use.
ISSUES
Whether the subject blade holder sets are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Whether the subject tower holder sets are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
LAW AND ANALYSIS
Per 19 C.F.R. § 141.4(a), “all merchandise imported into the United States is required to be entered, unless specifically excepted.” The four exceptions to the requirement of entry are listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic. 19 C.F.R. § 141.4(b)(3).
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 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 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.
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).
Issue 1 – Blade Holder Sets as IITs under 19 C.F.R. § 10.41a(a)(1)
The blade holder sets are substantial inasmuch as they are made of steel, welded steel, and fiberglass and have a life expectancy of four years. Further, the subject blade holder sets are suitable for and capable of repeated use insofar as they will be used three to five times a year. 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; Holly Stores, Inc. v. United States, 697 F.2d 1387 (Fed. Cir. 1982). CBP has consistently held that single use is not sufficient; reuse means more than twice. See HQ 105567 and HQ 108658. The blade holder sets are used in significant numbers in international traffic inasmuch as approximately 10,000 sets will be in circulation.
CBP has held that steel “blade fixtures” used to transport wind turbine blades qualify as instruments of international traffic. See HQ H266424 (Oct. 7, 2015). Based on the foregoing, the subject blade holder sets 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 subheading 9803.00.50 HTSUS.
Issue 2 – Tower Holder Sets as IITs under 19 C.F.R. § 10.41a(a)(1)
The tower holder sets are substantial inasmuch as they are made of steel and welded steel and have a life expectancy of four years. Further, the subject tower holder sets are suitable for and capable of repeated use insofar as they will be used three to five times a year. 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; Holly Stores, Inc. v. United States, 697 F.2d 1387 (Fed. Cir. 1982). CBP has consistently held that single use is not sufficient; reuse means more than twice. See HQ 105567 and HQ 108658. The tower holder sets are used in significant numbers in international traffic inasmuch as approximately 400 sets will be in circulation. Based on the foregoing, the subject tower holder sets 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 subheading 9803.00.50 HTSUS.
HOLDING
The subject blade holder sets are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
The subject tower holder sets 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