BOR-4-07:RR:IT:EC 116032 TLS
Mr. Jack Trickett
envir0pak, Inc.
2699 Pontius Road
Hartville, Ohio 44632
RE: Instruments of International Traffic; 19 U.S.C. §1322(a); 19 CFR 10.41a(a)(1); Flexible Intermediate Bulk Containers; Harmonized Tariff Schedule of the United States Annotated (HTSUSA) heading 9803.00.50.
Dear Mr. Trickett:
This is in response to your letter, dated July 30, 2003, requesting a ruling concerning whether certain Flexible Intermediate Bulk Containers (FIBCs) qualify as instruments of international traffic (IIT) under 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1) and therefore qualify for duty-free treatment under subheading 9803.00.50, HTSUSA.
FACTS:
Envir0pak, Inc. manufactures and sells FIBCs under the trade name “Slip-Tray.” The Slip-Tray is made of virgin or recycled polymeric material and is formed into a pallet base.( The pallet bases are designed according to customers’ specifications and are not built to any one standard size. The Slip-Tray is marketed as an alternative to wood, plastic, or metal pallet bases. The Slip-Tray is used either for a single trip and then recycled, or for multiple trips until damaged, and then recycled. Approximately 50,000 will be used in year 2003.
ISSUE:
Whether the Slip-Tray may be designated as an instrument of international traffic under 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1).
LAW AND ANALYSIS:
Pursuant to 19 U.S.C. §1322(a), instruments of international traffic shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. Pursuant to 19 CFR 10.41a(a)(1), the Commissioner of Customs and Border Protection (CBP) is authorized to designate as instruments of international traffic such additional articles not specifically noted in that section. Such instruments may be released without entry or payment of duty.
To qualify as an instrument of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1), an article must be used as a container or holder. The article also must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See HTSUSA subheading 9803.00.50 and HQ 112303 (August 14, 1992).
The concept of reuse contemplated above is for commercial shipping or transportation purposes, and not incidental or fugitive uses. Customs Ruling HQ 113531 (August 31, 1995), citing Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at 99, and Holly Stores, Inc. v. United States, 697 F.2d 1387 (Fed. Cir. 1982). In Holly Stores, 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.” 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, and concluded that the hangers were “not designed for, or capable of, reuse.” Holly Stores, supra. See also HQ 113531, supra. As further noted in HQ 113531, subsequent Customs rulings have held that single use is not sufficient and that “reuse” means more than twice. See, e.g., Customs rulings HQ 105567 and HQ 108658. We emphasize 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 your request and supporting documentation, we find that those Slip-Trays that will be used multiple times meet the requirements of an instrument of international traffic. Conversely, those Slip-Trays that will be used for a single shipment and then destroyed and recycled do not meet the requirements of an IIT.
HOLDING:
The Slip-Trays, as described above, are hereby designated as instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and pursuant to 19 CFR 10.41a(a)(1) when used for multiple shipments (i.e., more than twice) in the commercial context.
The Slip-Trays that will be used for a single shipment, whether commercial or not, do not meet the requirements for instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1).
Sincerely,
Glen E. Vereb
Chief
Entry Procedures and Carriers Branch