BOR-4-07 RR:BSTC:CCI 116641 CK
Nicholas C. Bougopoulos
Program Dirextor, E-IRO
Hitachi Global Storage Technologies, Inc.
5600 Cottle Road
San Jose, CA 95193
RE: Plastic Cassettes as Instruments of International Traffic; 19 CFR §10.41a; 19 U.S.C. §1322(a)
Dear Mr. Bougopoulos:
This is in response to your ruling request dated January 13, 2005, to the Port Director of San Francisco. Your ruling request was forwarded to this office for response. You seek a ruling designating certain plastic cassettes as instruments of international traffic.
FACTS:
Hitachi Global Storage Technologies, Inc. (“GST”) located in San Jose, California, is a hard disk drive manufacturer that regularly ships disks in reusuable plastic cassettes. Finished disks are placed into the cassette body, one disk per slot, for a total 25 disks per cassette. The two cassette sizes (65 mm and 95 mm) used by Hitachi GST are manufactured in the United States and Malaysia and are used to transport disks to Thailand and China.
Each month approximately 92,000 sixty-five millimeter cassettes and approximately 30,000 ninety-five millimeter cassettes are in circulation. The full disk cassettes are emptied at the destination country and returned empty to Hitachi GST in San Jose, CA. The empty disk cassettes are washed and prepared for the next export cycle.
The cassettes consist of three pieces; a top piece, a bottom piece, and a middle piece or body which holds the disk. The top and bottom pieces are made of polypropylene and the middle piece is made of polycarbonate. Each piece of the container is individually and permanently marked with the country of origin and do not contain any serialized number or any other identifiable marking. In addition, a temporary serial number label is affixed to the cassettes prior to export for disk tracking purposes. The label remains on the cassette upon its return to the United States and is removed as part of the cassette cleaning process.
The expected lifespan of the cassettes depends upon the material used for the cassette body. Two types of polycarbonate (PCR) are used for the bodies to meet the requirements of specific disk media products. Natural PCR, which has a typical life span of 6-8 years, is what has been used for the older existing products. Conductive PCR, which has a typical lifespan of 18-24 months, is being used for the new products and will be used for all future products as well. Either cassette body uses the same polypropylene (PP) cover set. The covers have an expected lifespan of 6-8 years and will outlast the newer conductive PCR cassette bodies.
The total number of containers that will be used each year is approximately 1.5 million with 1.1 million in 65 mm size and .4 million in the 95 mm size.
ISSUE:
Whether the plastic cassettes described above may be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and § 10.41a, CBP Regulations (19 CFR § 10.41a).
LAW AND ANALYSIS:
Title 19, United States Code, § 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 or instructions …." The Customs and Border Protection (CBP) Regulations issued under the authority of § 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.
Section 10.41a(a)(1) also authorizes the Commissioner of CBP to designate other items as instruments of international traffic. Once designated as instruments of international traffic, these items may be released without entry or the payment of duty, subject to the provisions of § 10.41a.
To qualify as an "instrument of international traffic" (IIT) within the meaning of 19 U.S.C. § 1322(a) and the regulations 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).
We note that CBP has previously ruled on the IIT status of articles of similar size, construction, and usage. In HQ 115503, dated May 30, 2000, we held that hard plastic boxes used to ship integrated circuit wafers qualified as IITs. We have held that articles, which consist of pallets and tops, plastic outer rings, plastic and cardboard pads, and form trays used to transport ceramic logs qualify as IITs when these parts were assembled together. See, HQ 115108, dated August 24, 2000. In HQ 116240, dated July 23, 2004, CBP held that both circuit die steel film trays and plastic cases holding those trays qualify as IITs. Finally, most recently CBP held that specialized pallets and containers used to ship lithography systems qualified as IITs. See, HQ 116575, dated January 26, 2006.
In this case, the plastic cassettes which contain or hold disks have a useful life, depending on the construction materials, of between 18-24 months and 6-8 years. There should be over 100,000 in circulation each month, and 1.5 million cassettes used in international trade over the course of a year. Based on the above-described criteria and the designs submitted showing the cassettes are substantial and durable the cassettes possess the requisite criteria to qualify as IITs pursuant to 19 U.S.C. § 1322(a).
HOLDING:
The plastic cassettes described above qualify as instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and may be released pursuant to 19 CFR § 10.41a.
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers & Immigration