BOR-4-07:OT:RR:BSTC:CCI H141176 WRB
Tracey T. Gonzalez, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP
399 Park Avenue
25TH Floor
New York, NY 10022–4877
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); subheading 9803.00.50, Harmonized Tariff Schedule of the United States Annotated (2010); “SeaPodd” Container Bottle Combination.
Dear Ms. Gonzalez:
This letter is in response to your correspondence of December 10, 2010, in which you request a ruling on behalf of your client, Hoyer Global (USA), Inc. In your request, you inquire whether certain container bottle combinations, as described below, qualify for designation as instruments of international traffic under 19 U.S.C. § 1322(a) and 19 CFR § 10.41a, and, therefore, whether, they may be released without entry or the payment of duty under subheading 9803.50.00, HTSUS. Your request was forwarded to this office from the National Commodity Specialist Division for review. Our ruling is set forth below.
FACTS:
The following facts are from your December 10, 2010, letter, as well as your supplementary submission of February 9, 2011, which include pictures of the subject articles. The articles in question are described as “bottle containers” or “container bottle combinations” and their components used by Hoyer Global (USA), Inc. (“Hoyer”), for shipping various bulk liquids. The container bottle combination sought to be designated as IIT by Hoyer is described as a bulk liquid transport system, which consists of a specialized 20-foot ISO shipping container modified with a manhole for top loading and cleaning, and a molded thermoplastic tank rigidly configured for holding bulk liquids, viscous products, or dry flowable cargo. The tank is capable of standing alone for storing the cargo, or the tank can be loaded into a standard dry box container to convert the dry box container into a bulk liquid transport container.
The bottle containers will be marketed under the trademarked names “SeaPodd” and “CBC - Container Bottle Combination.” These containers are similar to Intermediate Bulk Containers (“IBC”) or totes, which are used to transport bulk liquids, viscous products, or dry flowables. While IBC totes come in various sizes, the bottle containers at issue are much larger, and may be used for both non-viscous liquids and viscous liquids with additional cleaning. Constructed of high-density polyethylene, the containers utilize a unique design which makes them similar to “flexi bags” used for transporting bulk liquids inside dry transport containers. Photographs of the container bottle combination are appended below:
The containers will leave the United States filled with non-hazardous liquids such as oils, glycols, and brake fluids, and be returned to the U.S. empty, but not yet cleaned. The containers will be cleaned in the U.S., then refilled and reused. Hoyer expects that by early 2011, approximately 100 of the containers described above will be in circulation, imported and exported primarily through the Gulf of Mexico ports of Houston and New Orleans. The containers will be reused approximately six to eight times per year.
ISSUE:
Whether the container bottle combinations as described above may be designated as instruments of international traffic (IIT) within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1). 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 § 1322(a) are contained in section 10.41 et seq. (19 CFR § 10.41a). To qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and the regulations 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 Harmonized Tariff Schedule of the United States
(“HTSUS”) subheading 9803.00.50; Tariff Schedule of the United States Headnote 6(b)(ii). See also CBP Rulings HQ 104766 and HQ 108084. 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, e.g., CBP Rulings HQ 105567 and HQ 108658.
Subheading 9803.50.00, HTSUS (2010) provides, in pertinent part, for the duty free treatment of:
Substantial containers and holders, if products of the United States . . . , 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 supplied).
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.
You assert that the subject articles are instruments of international traffic. 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. The Customs and Border Protection (CBP) regulations, promulgated under the authority of 19 U.S.C. § 1322(a), provide 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. Such instruments may be released without entry or the payment of duty, subject to the provisions of this section. 19 C.F.R. § 10.41a(a)(1)(emphasis added).
To qualify for entry-free and duty-free treatment as instruments of international traffic 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 instruments of international traffic 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 instrument of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), a container or holder 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).
In previous determinations, CBP has ruled that certain articles of similar nature, use and construction as those presently under consideration qualify as instruments of international traffic pursuant to 19 U.S.C. § 1322(a) and 19 CFR § 10.41a, as discussed below:
Regarding the modified shipping containers, Title 19, United States Code, section 1322(a), provides, “Vehicles 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 regulation or instructions of the Secretary of the Treasury.” 19 U.S.C. 1322(a). The Customs regulations issued under the authority of this section are contained in 19 C.F.R. 10.41a (1992). The regulations specifically designate lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments of international traffic. 19 C.F.R. 10.41a(a)(1). Accordingly, the modified shipping containers are already of a class of goods designated as IITs by that regulation. As the modifications to the containers are minimal, consisting of installing the manhole and drain cut-out, they do not change the containers’ essential character. Consequently, we find that the subject modified shipping containers qualify as IITs pursuant to 19 U.S.C. § 1322(a).
Regarding the molded thermoplastic tank or bottle; if the subject tanks are considered shipping tanks by 19 CFR § 10.41a, they are already of a class of goods designated as IITs by that regulation. If not, upon review of the request and accompanying documentation, we are of the opinion that the tanks in question are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. In CBP Ruling HQ 114733 (November 17, 1999) we determined that “semi-bulk tanks” constructed of stainless steel, or stainless steel with polypropylene internal tanks used to transport liquid chemicals for water management/boiler treatment compounds in plants and water treatment facilities could be designated as instruments of international traffic; similarly, in CBP Ruling HQ 116534 (December 5, 2005), we ruled that stainless steel totes (IBC’s), carbon steel IMO 1 skid tanks and carbon steel cylinders to ship chemicals could be designated as instruments of international traffic. Consequently, we find that the subject tanks qualify as IITs pursuant to 19 U.S.C. § 1322(a).
Regarding the bulk liquid transport system, consisting of the molded thermoplastic tank or bottle, the modified shipping container, and associated equipment; in CBP Ruling HQ 112134 (September 17, 1992), we determined that flex tanks used for the transportation of liquid commodities and transportation and storage of grain, chilled beef, cocoa butter, etc., consisting of a steel frame, a polyvinyl chloride plastic outer surface, and a disposable polyethylene plastic inner bag, could be designated as instruments of international traffic. Consequently, we find that the subject bulk liquid transport system qualifies as IITs pursuant to 19 U.S.C. § 1322(a).
Upon reviewing the present matter, we are of the opinion, based on the information provided by Hoyer, that the requisite criteria for designation of the subject the bulk liquid transport system as instruments of international traffic have been met. The bulk liquid transport system, consisting of the molded thermoplastic tank or bottle, the modified shipping container, and associated equipment, is used to transport bulk liquids, viscous products, or dry flowables, in international trade. The containers will leave the United States filled with non-hazardous liquids such as oils, glycols, and brake fluids, and be returned to the U.S. empty, but not cleaned. The containers will be cleaned in the U.S., then refilled and reused. Hoyer expects that by early 2011, approximately 100 of the containers described above will be in circulation. The containers will be reused approximately six to eight times per year. Accordingly, the bulk liquid transport system meets the requisite criteria to qualify as IIT pursuant to 19 U.S.C. § 1322(a) and 19 CFR § 10.41a.
HOLDING:
The specialized 20-foot ISO shipping containers are IIT, and may be released without entry or the payment of duty under subheading 9803.50.00, HTSUS, pursuant to the provisions of 19 CFR § 10.41a(a)(1).
The molded thermoplastic tanks or bottles are IIT, and may be released without entry or the payment of duty under subheading 9803.50.00, HTSUS, pursuant to the provisions of 19 CFR § 10.41a(a)(1).
The bulk liquid transport system, consisting of the molded thermoplastic tank or bottle, the modified shipping container, and associated equipment, is IIT, and may be released without entry or the payment of duty under subheading 9803.50.00, HTSUS, pursuant to the provisions of 19 CFR § 10.41a(a)(1).
Should you have any questions regarding this matter, please contact W. Richmond Beevers, of my staff, at (202) 325-0084.
Sincerely,
George Frederick McCray
Supervisory Attorney-Advisor/Chief
Cargo Security, Carriers and Immigration Branch
Office of International Trade, Regulations & Rulings
U.S. Customs and Border Protection