BOR-4-07-RR:BSTC:CCI 116622 IDL
Mary Zurovec
Import Compliance
Atlas Freight Systems
3340-B Greens Road, Suite 680
Houston, Texas 77032
Re: Instruments of International Traffic; Repair Components; Subheading 9803.00.50, HTSUSA; 19 U.S.C. § 1322; 19 CFR § 10.41a
Dear Ms. Zurovec:
This is in response to your letter to the National Commodity Specialist Division, U.S. Customs and Border Protection (CBP), dated January 20, 2006, on behalf of Pelican Worldwide, Inc. The letter, which has been forwarded to this office for our review, requests a binding ruling on designation of various repair components as instruments of international traffic. Our ruling on this matter is set forth below.
FACTS:
Pelican Worldwide, Inc., of Houston, Texas (“Pelican”), is a supplier of tank container repair components. The repair components, which Pelican imports from various countries, include Airline Ball Valves, Ball Valves, Butterfly Valves, Cam & Groove Fittings, Catwalk, Cladding Materials, Data Plates, Decals, Dipsticks, Document Holders, Dust Caps, Fittings, Flamescreens, Flanges, Foot Valves, Gaskets, Gauges & Thermometers, Man Lids, Metric Steel, PV Valves, Rupture Disks, and TIR Pins.
The repair components are entered through the port of Houston, Texas, and are then used, as necessary, to repair tank containers. You have provided a catalog, covering the tank container repair components listed above, and a letter from a company that states that it uses Pelican’s repair components to repair its tank containers.
ISSUE:
Whether the subject repair components may be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR
§ 10.41a, CBP regulations (19 CFR 10.41a)?
LAW AND ANALYSIS:
Title 19, United States Code, section 1322(a) (19 U.S.C. 1322(a)), provides in pertinent part that “[v]ehicles and other instruments of international traffic…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….” The CBP regulations issued under the authority of section 1322(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. (emphasis added)
Section 10.41a(a)(1) also authorizes the Commissioner of CBP to designate other items as instruments of international traffic (IIT). Once designated as IITs, these items may be released without entry or the payment of duty, subject to the provisions of section 10.41a.
To qualify as an IIT within the meaning of 19 U.S.C. section 1322(a) and the regulation promulgated pursuant thereto (19 CFR 10.41 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 Schedule of the United States (TSUS), 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).
It is our position that since the subject repair components do not contain or hold transported merchandise, as required, they do not qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and section 10.41a of the CBP Regulations.
Nevertheless, paragraph (a)(2) of section 10.41a (19 CFR 10.41a(a)(2)) provides the following:
Repair components… 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 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…. The port director must be satisfied that the importer of the repair component… had the declared intention at the time of importation. (emphasis added)
In the instant case, Pelican proposes using the subject repair components to repair tank containers. However, section 10.41a(a)(1) specifically designates shipping tanks as IITs. We have stated that the regulations do not require a formal ruling on the designation of any specific container or holder if a container or holder is identical or similar to an article or class of articles already designated as an IIT. HQ 112399 (February 24, 1993). Thus, if tank containers may be properly characterized as "shipping tanks" to the satisfaction of local CBP officials, they would qualify for treatment as IITs under the provisions of section 10.41a(a)(1).
In that event, the importation of the subject repair components for the repairing of tank containers would meet the criteria for repair components for instruments of international traffic of foreign production, and the repair components would be eligible for duty-free treatment pursuant to the provisions of 19 U.S.C. § 1322, subheading 9803.00.50, HTSUSA, and 19 CFR § 10.41a. We note that entry of the repair components would be required under 19 CFR § 10.41a(a)(2).
HOLDING:
The subject repair components may not be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR
§ 10.41a, but may be entered duty-free as repair components for instruments of international traffic within the meaning of 19 CFR § 10.41a(a)(2) if CBP characterizes the tank containers to be identical or similar to “shipping tanks.”
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers and Immigration Branch