BOR-07-OT:RR:BSTC:CCR H272023 DAC
Anthony M. Troia
Livingston International Professional Services, Inc.
20700 Civic Center Dr., Suite 500
Southfield, MI 48076
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1),(2); HTSUS subheading 9803.00.50; Thompsons USA (“Thompsons”); Flexible Intermediate Bulk Containers (“FIBCs”) and Ratchet Strap Assemblies (“ratchet straps”).
Dear Mr. Troia:
This is in response to your December 14, 2015, ruling request to the National Commodity Specialist Division (“NCSD”) on behalf of Thompsons USA (“Thompsons”), which we received on January 12, 2016. The NCSD forwarded your request to this office for our direct response to you. In your submission, you request a ruling concerning whether certain transport devices, identified by Thompsons as Flexible Intermediate Bulk Containers (“FIBCs”) and Ratchet Strap Assemblies (“ratchet straps”), qualify as instruments of international traffic (IIT) and accessories of instruments of international traffic 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 and the exhibits attached. The subject articles are known as FIBCs and ratchet straps. The FIBCs are originally manufactured in India, and the ratchet straps are originally manufactured in China. The FIBCs and ratchet straps are both acquired by Thompsons USA from a logistics company located in Ontario, Canada. The FIBCs and ratchet straps are used by Thompsons USA to transport bulk grain, to include edible beans, within the FIBCs, which are secured within shipping containers. The FIBCs resemble tall, large capacity bags that close at the top. The ratchet straps are used to secure the FIBCs to the shipping container to prevent movement of the FIBCs, prevent shifting of the contents and prevent damage to the cargo. The FIBCs are made of uncoated blue polypropylene. The subject FIBCs are identified as “Style Q-bag Squareform,” with specification code BF210HNZ300. The approximate quantity of FIBCs that are shipped in international traffic is currently approximately 12,000 units in circulation per year. The FIBCs, when filled with cargo, such as edible beans, have dimensions of 105 x 105 x 211cm (L x W x H). The FIBCs weight load capacity is 2100 kilograms (kgs). The FIBCs have an estimated six to eight year lifespan for each unit.
The ratchet straps are made of a red polyester belt strap that is two inches wide, and a steel S hook device that attaches to the belt and enables the belt to be tightened and secured. The subject ratchet straps are identified as “Lift Sling Model 2905-7642-HD-RED Ratchet Strap Assembly.” The subject FIBCs and ratchet straps are currently used in international traffic between the United States, Canada, and the United Kingdom, and they are not being used in domestic traffic within the United States. The approximate quantity of ratchet straps that are shipped in international traffic is currently approximately 1,200 units in circulation per year. The ratchet straps have a working load limit capacity of 500 kgs. The ratchet straps have an estimated minimum six year lifespan for each unit.
Below are images you provided of the subject FIBCs and ratchet straps.
FIBC Ratchet straps attached to FIBCs
Ratchet strap
ISSUES
Whether the subject FIBCs are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Whether the subject ratchet straps are accessories of IITs within the meaning of 19 C.F.R. § 10.41a(a)(2).
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.
ISSUE 1
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 FIBCs, in HQ 115754 (Aug. 19, 2002), CBP held that, “[t]he FIBCs described above are designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and § 10.41a,…;” see also HQ 111429 (Mar. 20, 1991) holding that the heavy duty polypropylene bags are IITs; HQ 113407 (Apr. 25, 1995) holding that the woven polypropylene bags are IITs; HQ 113531 (Aug. 31, 1995) holding that FIBCs are IITs; HQ 113916 (July 2, 1997) holding that the polypropylene bags are IITs.
Based upon review of the submission and information provided, the subject FIBCs are containers that are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. The articles have an estimated useful life of six to eight years and approximately 12,000 units are to be used in international traffic. Based on the foregoing, the subject FIBCs 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.
ISSUE 2
Pursuant to 19 C.F.R. § 10.41a(a)(2), “[r]epair components, accessories, and equipment 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 the 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, or that the accessory or equipment is for 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, accessory, or equipment had the declared intention at the time of importation.”
19 C.F.R. § 10.41a(a)(2)(emphasis added).
The subject ratchet straps are devices that are instrumental in use along with the FIBCs for the transportation of merchandise. In regards to ratchet straps, in HQ H162376 (July 20, 2011), CBP held that, “[t]he straps with ratchet closures described above may be entered duty-free as accessories of instruments of international traffic within the meaning of 19 CFR § 10.41a(a)(2).” Based on the foregoing, the subject ratchet straps are designated as accessories of IITs; therefore they may be entered duty-free as accessories of instruments of international traffic within the meaning of 19 CFR § 10.41a(a)(2).
HOLDING
The subject Flexible Intermediate Bulk Containers (“FIBCs”) are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
The subject Ratchet Strap Assemblies (“ratchet straps”) are accessories of IITs within the meaning of 19 C.F.R. § 10.41a(a)(2).
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