BOR-7-07-CO:R:P:C 111703 GEV
Mr. Max Wang
ClearFreight
Post Office Box 92963
Los Angeles, California 90009
RE: Instruments of International Traffic; Shipping modules;
19 U.S.C. 1322
Dear Mr. Wang:
This is in response to your letter dated May 15, 1991, on
behalf of Arvin Sango, Inc. requesting a ruling that certain
collapsible containers are instruments of international traffic.
Our ruling is set forth below.
FACTS:
Arvin Sango, Inc., ("Arvin") of Madison, Indiana, uses
Japanese-built, collapsible, steel containers when importing
automobile parts from Japan. These containers, imported through
the Port of Los Angeles/Long Beach, are used to transport
automobile parts inside an ocean container. The automobile parts
arrive at Arvin's plant in Madison, Indiana, inside these
collapsible containers which are suitable for long term and
repetitive use. These containers are accumulated until a
sufficient number of them is collected to fill up an ocean
container at which time they are shipped back to Japan and re-
used to transport automobile parts to the United States.
ISSUE:
Whether reusable, collapsible, steel containers used to
import certain automobile parts from Japan may be designated as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and section 10.41a, Customs Regulations (19 CFR
10.41a).
- 2 -
LAW AND ANALYSIS:
Title 19, United States Code, section 1322(a) (19 U.S.C.
1322(a)), provides that "[v]ehicles and other instruments of
international traffic, of any class specified by the Secretary of
the Treasury, 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 of the Treasury."
The Customs Regulations issued under the authority of
section 322(a) are contained in section 10.41a (19 CFR 10.41a).
Section 10.41a(a)(1) specifically designates lift vans, cargo
vans, shipping tanks, skids, pallets, caul boards, and cores for
textile fabrics as instruments of international traffic.
Section 10.41a(a)(1) also authorizes the Commissioner of
Customs to designate other items as instruments of international
traffic in decisions to be published in the weekly Customs
Bulletin. Once designated as instruments of international
traffic, these items may be released without entry or the payment
of duty, subject to the provisions of section 10.41a.
To qualify as an "instrument of international traffic"
within the meaning of 19 U.S.C. 1322(a) and the regulation
promulgated pursuant thereto (19 CFR 10.41a et seq.), 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 subheading
9803.00.50, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA), and former Headnote 6(b)(ii), Tariff
Schedules of the United States (HTSUS), as well as Headquarters
Decisions 104766; 108084; 108658; 109665; and 109702).
The concept of reuse contemplated above is for commercial
shipping or transportation purposes, and not incidental or
fugitive uses. Tariff Classification Study, Sixth Supplemental
Report (May 23, 1963) at 99. See Holly Stores, Inc. v. United
States, 697 F.2d 1387 (Federal Circuit, 1982).
In Holly Stores, supra, the court determined that "reuse" in
the context of former General Headnote 6(b)(ii) "has been
consistently interpreted to mean practical, commercial reuse, not
incidental reuse." (Emphasis added). In that case, articles of
clothing were shipped into this country on wire or plastic coat
hangers. Evidence showed that the hangers were designed to be,
and were of fairly durable construction and that it would be
physically possible to reuse them. However, the court found that
only about one percent of the hangers were reused in any way at
all, and that those uses were of a noncommercial nature. The
court held that the uses of these hangers beyond shipping them
once from overseas to the United States were purely incidental,
- 3 -
and concluded that the hangers were "not designed for, or
capable of, reuse". Subsequent Customs rulings on this matter
have held that single use is not sufficient; reuse means more
than twice (Headquarter rulings 105567 and 108658). Furthermore,
it is our position that the burden of proof to establish reuse is
on the applicant, even though the applicant may not be the party
reusing the instrument.
Upon reviewing the information provided, we are of the
opinion the above requirements have been met. In addition,
Customs has previously ruled that steel racks and plastic boxes
of a similar use and construction as those under consideration
qualify as instruments of international traffic pursuant to 19
U.S.C. 1322(a) and section 10.41a, Customs Regulations (see
T.D.'s 70-236, 74-195, 76-203, 77-284, and 78-19, and Customs
Ruling 111073).
HOLDING:
Reusable, collapsible, steel shipping containers used to
import certain automobile parts from Japan are designated as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and section 10.41a, Customs Regulations (19 CFR
10.41a).
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch