OT:RR:BSTC:CCR H324094 JLE
Paula Connelly
Counsel
100 Trade Center, Ste G-700
Woburn, MA 01801
RE: Instruments of International Traffic; 19 U.S.C. § 1332(a); §§ 10.41a(a)(1), 10a(a)(2); Cold Chains Technology, Inc.; Endeavair and Insulation Panels; Accessories
Dear Ms. Connelly:
This is in response to your March 18, 2022, ruling request on behalf of Cold Chain Technologies, Inc. In your request you inquire whether certain thermal packaging equipment qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1332(a). Our ruling is set forth below.
Facts
The following facts are from your ruling request and supplements thereto. There are two subject items, Cold Chain Technologies, Inc. (“Cold Chain”) Kool Temp Endeavair 1600L Bulk shipping container (“Endeavair” or “subject containers”) and Cold Chain’s Vacuum Insulated Panels (“VIPs”). The subject Endeavairs will be outfitted with VIPs.
The subject Endavairs are leased to customers who will use them in the international shipping of temperature sensitive products, such as: pharmaceutical, biomedical, life-science and food products. Upon arrival at their destination, the product will be unladed, and the container picked up by a third-party company who will return them to a Cold Chain site, generally in the United States or the Netherlands. The subject container will then be cleaned, refurbished, and prepared for the next shipment. The subject containers and subject VIPs will be used in international airfreight. Both will have serial numbers that can be tracked by Cold Chain.
With respect to the subject Endeavairs, the containers are manufactured in the United States. The subject items are 61 inches by 47 inches by 62 inches. The subject Endeavairs provide over 144 hours of temperature control. Currently, there are over 100 Endeavairs in use throughout the world. Each subject Endeavair will be used about 12 times per year with a minimum lifespan of 10 years. The subject Endeavair is photographed below.
With respect to the subject VIP’s, the items are designed to be secured to the interior of an Endeavair container. The subject VIPs are manufactured in China and imported by Cold Chain. The subject VIPs are manufactured specifically for the required size for use within the Endeavair. The subject Endeavair cannot perform the temperature control function without the subject VIPs. Each Endeavair will use approximately 24 subject VIPs that are made from fiberglass, polyethylene, polyurethane, and aluminum. The VIPs have a lifespan of five to 10 years. The VIP is depicted in the photograph below.
Issues
Whether the subject Endeavair qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Whether the subject VIPs qualify for consideration as IITs accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1) or 19 C.F.R. § 10.41a(a)(2).
Law and Analysis
Per 19 C.F.R. § 141.4(a), “all 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 (“IIT”). 19 C.F.R. § 141.4(b)(3).
Subheading 9803.00.0, 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). 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 used as a container or holder must be: (1) substantial, (2) suitable for and capable of repeated use, and (3) used in significant numbers in international traffic. See HQ H291037 (Jan. 9, 2018); 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).
For certain subject items we also consider whether they may be classified as accessories to IITs under 19 C.F.R. §10.41a(a)(2) or (a)(3).
Pursuant to 19 C.F.R. § 10.41a(a)(2),
(2) Repair 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 Center director must be satisfied that the importer of the repair component, accessory, or equipment had the declared intention at the time of importation.
Pursuant to 19 C.F.R. § 10.41a(a)(3), an IIT “includes the normal accessories and equipment imported with any such instrument which is a ‘container’ as defined in Article 1 of the Customs Convention on Containers.” 19 C.F.R. § 10.41a(a)(3).
Additionally, accessories to IIT must be “substantial, suitable for and capable of repeated use with intermodal containers which are IITs and will serve as accessories or equipment for such containers.” HQ 116684 (Aug. 17, 2006).
Endeavairs
U.S. Customs and Border Protection (“CBP”) has previously determined that similar thermal containers qualify for treatment as IIT. See HQ H276370 (Jul. 27, 2016). In HQ H276370, CBP examined thermal controlled containers that used dry ice to maintain temperature and determined the containers alone qualified as an IIT. Id. CBP has held that reusable means using the containers more than twice. See HQ 112627 (May 18, 1993); HQ 111073 (Aug. 16, 1990). CBP has previously determined thermal control containers that are capable of reuse over one hundred times, with approximately 120 containers being used in international traffic and were serialized, qualified for treatment as IIT. H218509 (Jul. 12, 2012)
Based upon review of the submission and information provided, the subject individual Endeavairs are substantial, they are capable of repeated use and over one hundred of subject Endeavairs are to be used in international traffic. Based on the foregoing, the subject Endeavairs are designated as IITs. Therefore, they qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1).
Vacuum Insulation Panels
CBP has previously found that assemblies that “do not hold or contain merchandise independent of the shipping containers in which they are transported” do not qualify as substantial holders or containers. See HQ H319586 (Aug. 26, 2021). As discussed above, the subject VIPs attach to the intermodal container. Therefore, they do not operate independently of the shipping containers in which they are transported and are not IITs pursuant to 19 C.F.R. § 10.41a(a)(1).
In HQ H218509, CBP ruled on thermal shipping containers and their accompanying components used to regulate the temperature. See HQ H218509 (Jul. 30, 2012). CBP determined “the R36 Freeze Rack and the Thermal Regulating Unit (TRU) are integral to maintaining the desired temperature control of such containers and are accordingly designated as ‘accessories’ of ‘instruments of international traffic’ pursuant to 19 C.F.R. § 10.41a(a)(3).”
Based upon review of the submission and information provided, the subject VIPs are accessories insofar they attach to the subject Endeavair, are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. Based on the foregoing, the subject VIPs are designated as accessories of IITs; therefore, they qualify for entry-free and duty-free treatment as accessories IITs pursuant to 19 C.F.R. § 10.41a(a)(3).
Holding
The subject Endeavairs qualify as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
The subject VIPs qualify as accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(2).
Sincerely yours,
W. Richmond Beevers, Chief
Cargo Security, Carriers, and Restricted Merchandise Branch