OT:RR:BSTC:CCR H262230 DAC
Craig A. Lewis, Esq.
Hogan Lovells US LLP
555 13th Street, NW
Washington DC 20004-1109
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1);
HTSUS subheading 9803.00.50; Cold Box Express LLC (“CBE”); “Cold Box Mobile Refrigerated and Climate Controlled Transport Containers.”
Dear Mr. Lewis:
This is in response to your February 24, 2015, ruling request for Cold Box Express, LLC (“CBE”). In your letter, you request a ruling concerning whether certain transport devices, also identified by CBE as the “Cold Box Mobile Refrigerated and Climate Controlled Transport Containers,” qualify as instruments of international traffic (IIT) and are therefore, classifiable under subheading 9803.00.50 of the Harmonized Tariff Schedule of the United States (HTSUS). Our decision follows.
FACTS
The following facts are from your ruling request. You claim that the subject transport devices, (known as the “Cold Box Mobile Refrigerated and Climate Controlled Transport Containers”), manufactured by CBE are made in the United States. You describe the CBE transport devices as being constructed of an aluminum base, aluminum inner container and aluminum external framework that are used as transport devices to maintain cargo at specific controlled temperatures. The inner frame of these devices is surrounded with multiple layers of foam insulation and vacuum insulated panels. These insulated panels are sandwiched between the outer frame and inner container. There are two models of the CBE transport devices that both have the same exterior dimensions (82” H x 49.1 W x 80” L) and differ only in the interior dimensions. The two different CBE transport devices container interior dimensions are 52.5” H x 43.6” W x 50.1” L, and 61.1” H x 43.6” W x 50.1” L, respectively. The 52.5” height model has space on the bottom of the container occupied by a battery power system used to provide temperature control. The CBE transport devices may be used to various transport products that include, but are not limited to, pharmaceuticals, food products, art and specialty chemicals. The CBE transport devices weigh approximately 1800 pounds and are capable of holding another 2000 pounds of payload inside. The CBE transport devices have an estimated fifteen (15) year lifespan for each unit. The CBE transport devices are also intended to be offered for use by other shippers on a daily rental basis or on a month to month lease basis, and longer leases are available. You state that the subject articles are made entirely within the United States, in Alabama. You also state that the subject CBE transport devices are currently used in international traffic between the United States and Canada, and that the devices are planned to also be used in international traffic between the United States and Mexico in the future. You further state that the subject devices are currently used in domestic traffic and will continue to be used in domestic traffic within the United States. You also state that each of the subject CBE transport devices has a unique serial number that appears both on a metal plate and printed on each device, which allows CBE to keep track of which containers are used in international traffic and which are used in domestic traffic. The approximate quantity of such CBE transport devices that are shipped in international traffic is currently approximately fifty (50) units transporting an estimated 1000 shipments per year. It is intended and expected that during calendar year 2015 an additional 130 units will be added and during 2016 another 300 units will be added to the operational inventory in international traffic.
You state that the CBE transport devices use an efficient compression cooling system powered by a rechargeable absorbed glass mat (AGM) lead acid battery that are permanently installed into the CBE transport devices themselves. You further state that the batteries can operate for up to 150 hours on a charge, and may be recharged in eight to twelve hours. Additionally, the CBE transport devices may be plugged into a power outlet to provide continuous temperature control. The range of temperatures available to the CBE transport devices is from -18 degrees Celsius to 49 degrees Celsius. The CBE transport devices are also installed with global positioning system (GPS) location devices.
Below are images you provided in your submission of the subject CBE transport devices.
Image of “Cold Box Mobile Refrigerated and Climate Controlled Transport Container.”
Images of “Cold Box Mobile Refrigerated and Climate Controlled Transport Containers.”
Illustrations of “Cold Box Mobile Refrigerated and Climate Controlled Transport Containers.”
ISSUE
Whether the subject Cold Box Mobile Refrigerated and Climate Controlled Transport devices are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
LAW AND ANALYSIS
Pursuant to 19 U.S.C. § 1322(a), IITs 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 relevant Customs and Border Protection (CBP) regulations implementing that statute are found at 19 C.F.R. § 10.41a(a)(1) which provides 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.
19 C.F.R. § 10.41a(a)(1)(emphasis added).
Such instruments may be released without entry or the payment of duty, subject to the provisions of this section.
Subheading 9803.00.50, HTSUS provides for the duty-free treatment of:
Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing merchandise), 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 added). 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.
Pursuant to 19 C.F.R. § 10.41a(a)(1), “[t]he Commissioner of Customs [currently 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.” See 19 C.F.R. § 10.41a(a). We note that in regards to temperature controlled cargo containers, in HQ H225100 (Sept. 17, 2012), CBP held that, “[t]he temperature-controlled cargo containers described above qualify as IITs within the meaning of 19 U.S.C. §1322(a) and 19 CFR § 10.41a;” see also HQ H167475 (July 20, 2011) holding that temperature control containers are IITs; HQ H218509 (July 30, 2012) holding that temperature control containers are IITs. In regards to reusable shipping containers, in HQ H218556 (May 24, 2012), CBP held that, “[t]he Front Opening Shipping Boxes or “FOSB” boxes, as well as the SKY Cubes and Hybox containers … qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a.”
Based upon review of the submission and information provided, the subject CBE transport devices, also known as “Cold Box Mobile Refrigerated and Climate Controlled Transport Containers,” are containers that are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. They have a useful life that permits repeated use cycles and fifty such units are to be used in international traffic, with more to be added to the operational inventory. Based on the foregoing, the subject “Cold Box Mobile Refrigerated and Climate Controlled Transport Containers,” are designated as IITs; therefore, they will qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and HTSUS subheading 9803.00.50.
HOLDING
The subject Cold Box Mobile Refrigerated and Climate Controlled Transport Containers are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection