BOR-07-OT:RR:BSTC:CCR H316377 TNA
Mr. Ryan Pratt, LCB
Specialist Manager Master Data
Customs & Export Control
BMW Consolidation Services Co., LLC
1400 Highway 101 South
Greer, SC 29651
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; BMW Consolidated Services Co., LLC; Wiring Harness Sleeves
Dear Mr. Pratt:
This is in response to your ruling request submitted on January 19, 2021, on behalf of BMW Consolidated Services Co., LLC and your February 3, 2021 and February 9, 2021 emails containing further information requested by this office. In your January 19, 2021 request, you inquire whether wiring harness sleeve holders qualify as “Instruments of International Traffic” (“IITs”) within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Our ruling is set forth below.
FACTS
The subject merchandise consists of wiring harness sleeves holders that are specially designed for certain wiring harnesses in specific models of BMWs. These sleeves are used to protect the wiring harnesses from damage as the vehicle is being transported. Each sleeve is composed of woven polyester. Each sleeve has a zippered opening for ease of use and to securely enclose the wiring harness while in transport. The lifespan of each sleeve holder is five to seven years. BMW exports approximately 10,000 of these sleeves a month, and they are reused more than 20 times before they are replaced.
The subject sleeve holders are manufactured in China. BMW sources them from [] in Mexico, who sells them to BMW’s wiring harness supplier, [], which is located in []. [] places wiring harnesses into the sleeves and ships both the sleeves and the harnesses to BMW’s Spartanburg, South Carolina, location. The wiring harnesses and wiring harness sleeves are then exported to foreign markets [].
The automobile body, the wiring harness, and various other vehicle parts are transported in 40-foot containers to the foreign market on a monthly basis. Some containers that BMW ships hold the automobile bodies; others hold separate containers of parts. The parts are then assembled into the automobile body when the manufacturer at the foreign port receives the containers.
Below are images of the subject wiring harness sleeve holders:
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ISSUE
Whether the subject wiring harness sleeve holders qualify as accessories to “Instruments of International Traffic” (“IITs”) within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a?
LAW AND ANALYSIS
Pursuant to 19 C.F.R. § 141.4(a), “[a]ll merchandise imported into the United States is required to be entered, unless specifically excepted.” The four exceptions to the requirement of entry are listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic. 19 C.F.R. § 141.4(b)(3).
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 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 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.
To qualify for entry-free and duty-free treatment as IITs 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 an IIT 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 IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), an article 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 HQ H282408 (Apr. 12, 2017), CBP examined whether certain locking fixtures could be classified as IITs. Those locking fixtures attached to the cargo for stabilization during transport rather than attaching to any of the pallets, intermodal containers, or cases used to transport the cargo. As a result, the locking fixtures were found not to be IITs because they did not hold or contain the cargo. Similarly, in HQ H286142 (July 6, 2017) the engine hooks at issue were attached to the engines they helped transport, but they did not hold or contain those engines. Instead, those hooks were essentially tools necessary to lift and move the automobile engines. As a result, CBP found that these hooks were not IITs because they were not substantial holders or containers. In HQ H303169 (Apr. 26, 2019), certain rail car shell coverings at issue were used to protect the subject rail car shells during transportation and during loading and unloading onto vessels. There, CBP found that the coverings were not IITs because they did not serve as, and were not used as, containers or holders for the rail car shells.
In the present case, the subject sleeves do not hold or contain merchandise. Instead, they are designed to protect a specific part of BMW’s vehicles while those vehicles are in transit. In addition, these sleeves cover those specific parts as they are shipped inside of shipping containers. Shipping containers themselves have long been held to be IITs. See, e.g., HQ H044900 (Dec. 18, 2008)(“it is well settled that intermodal cargo containers qualify as ‘instruments of international traffic.’”); see also HQ 113003 (Jan. 27, 1994); HQ 116684 (Aug. 17, 2006) and HQ W116719 (Nov. 30, 2006); HQ 113135 (June 21, 1994); HQ H251366 (June 4, 2014). However, the sleeves at issue in the present case do not hold or contain the merchandise- the shipping container does that while these sleeves, and the wiring harnesses they protect, are being transported. As such, the subject sleeves are akin to the rail car coverings of HQ H303169. Therefore, the subject sleeves do not meet the definition of IITs.
In its ruling request, BMW cited a number of prior CBP rulings in support of its argument that the subject sleeves are IITs. However, these rulings classify their merchandise as IITs because they were capable of holding or containing merchandise, and met the other requirements of being IITs. See, e.g., HQ 115816 (Dec. 2, 2002); HQ 111429 (March 20, 1991). This is in direct contrast to the wiring harness sleeves at issue here. As a result, we find that the rulings cited by BMW are not controlling in this case.
HOLDING
The subject wiring harness sleeves are not IITs within the meaning of 19 U.S.C. § 1322(a) or 19 C.F.R. § 10.41a(a)(1).
Sincerely,
Austen M. Walsh, Acting Chief
Cargo Security, Carriers and Restricted Merchandise Branch
Office of Trade, Regulations and Rulings
U.S. Customs and Border Protection