OT:RR:BSTC:CCR H339996 JLE
William S. Davis III
Agent
Host Agency LLC
150 W. Main Street
Suite 1840
Norfolk, VA 23510
RE: Instruments of International Traffic; 19 U.S.C. 1332(a); 19 C.F.R. 10.41a(a)(1), 10.41a(a)(2); cargo support structures
Dear Mr. Davis:
This is in response to your June 17, 2024, ruling request on behalf of Host Agency LLC, jointly with OLDENDORFF CARRIERS Gmbh & Co. KG., In your request you inquire whether certain wind-energy cargo support structures 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. The subject items are cargo support structures designed to hold various wind-energy components. The components are secured on deck by the subject items to support the lashing and safe ocean carriage of the wind components. Another key function of the subject structures is to provide a level surface to place the racks containing the various wind-energy components. The racks are not part of the subject cargo support structures. The design of the cargo support structures is compatible with standard freight containers used on international liner services.
The subject cargo support structures are manufactured in India. They are exclusively designed for OLDENDORFF CARRIERS' use. Currently, there are five sets comprised of forty to fifty structures. Each set is expected to complete two or four voyages per year. The structures have an expected lifespan of 10 voyages. The structures have serial numbered tags affixed to the frames. This ruling is limited the blue support structures seen below.
Issue
Whether the subject cargo support structures qualify for consideration as IIT within the meaning of 19 U.S.C. 1322(a) and 19 C.F.R. 10.41a(a)(1).
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[1] 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).[2]
You specifically refer to previous CBP rulings H266222, H290636, and H266817 as examples of similar devices that have been classified as IITs. However, these previously determined devices are distinctly different from the present subject devices. In ruling H266222, the wind turbine component is directly attached to the holding device. See HQ H266222 (Oct. 7, 2015). CBP determined the device was an IIT. Id. In ruling H290636 there are two devices that directly hold the wind component parts. See HQ H290636 (dated Oct. 13, 2017). CBP determined these holding sets were IITs. Id. In ruling H266817 the device directly attached to the wind component part. See HQ H266817 (Oct. 7, 2015). CBP determined these devices were IITs. Id. These previously determined IITs are fundamentally different than the subject devices in this ruling. Here, the subject devices do not directly hold the wind turbine components. Instead, they attach to the holders of the components to provide stability during the voyage. Due to the subject devices not acting as direct holders for the wind turbine components, they do not quality for consideration as an IIT.
However, the subject devices are used with and specifically designed for use with shipping containers and holders of the wind turbine components, we also consider whether they may be classified as accessories to IITs under 19 C.F.R. 10.41a(a)(2) or (a)(3). CBP has consistently held that shipping containers are "containers" and IITs. See, e.g., HQ H251366 (June 4, 2014) (finding that reefer shipping containers are IITs); HQ H044900 (Dec. 18, 2008) (holding that "it is well settled that intermodal cargo containers qualify as 'instruments of international traffic.'"); HQ 113003 (Jan. 27, 1994)(holding that intermodal cargo containers qualify for treatment as IITs); HQ 116684 (Aug. 17, 2006) and HQ W116719 (Nov. 30, 2006) (holding that intermodal containers are IITs).[3] CBP has also found that devices that are directly connected to wind turbines components are considered IITs. See H266222, H290636, and H266817.
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." See 19 C.F.R. 10.41a(a)(3). (Emphasis added)
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.
As discussed above, CBP has previously designated shipping containers and holders of wind-energy components as being IITs. In the present case, the subject devices are used to secure the wind-energy components to the transporting vessel's deck and maintain stability during the voyage. As shown in the provided photographs, these components directly attached the holding devices. The device is then secured to these subject cargo support structures. The subject devices are substantial as they are made from steel. They are capable of repeated use and are used in significant numbers of international traffic. For reasons discussed above, subject cargo support structures qualify to be classified as an accessory to IITs.
Holding
The subject cargo support structures are not IITS within the meaning of 19 U.S.C. 1322(a) and 10.41a(a)(1), because they are not holders.
However, the subject cargo support structures are accessories to IITs within the meaning of 19 C.F.R. 10.41a(a)(2) or 19 C.F.R. 10.41a(a)(3).
Sincerely yours,
W. Richmond Beevers. Chief
Cargo Security, Carriers, and Restricted
Merchandise Branch
Office of International Trade, Regulations
and Rulings
U.S. Customs and Border Protection
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[1] Customs revenue functions have been delegated to the Secretary of Homeland Security by the Secretary of Treasury, with exceptions herein not applicable, under the authority of the Homeland Security Act of 2002, Pub. L. 107-296. See Treas. Dep't Order 100-16 (May 15, 2003).
[2] The requirement that an article be "substantial" is not only a threshold requirement under 9803.00.50, but also a requirement for an article to be an instrument of international traffic pursuant to CBP decisions. The origin for the criterion found in CBP decisions that an article be "substantial" is found in Schedule 8, Item 808.00 of the Tariff Schedule of the United States (1963)(TSUS), the predecessor provision to 9803.00.50, HTSUS. Likewise, the criterion that an article be "suitable for and capable of repeated use" is found in Schedule 8, Item 808.00, TSUS, Headnote 6(b)(ii)(stating that the article must be capable of "reuse"). Although the requirement that an article be capable of reuse is no longer under subheading 9803.00.50, HTSUS (the successor provision to Item 808.00, TSUS), to receive duty-free treatment thereunder nevertheless, "reuse" is still required, pursuant to CBP decisions, for an article to be considered an instrument of international traffic.
[3] See also The Customs Convention on Containers, which defines the term "container" as an:
. . . article of transport equipment (lift-van, movable tank or other similar structure):
(i) fully or partially enclosed to constitute a compartment intended for containing goods;
(ii) of a permanent character and accordingly strong enough to be suitable for repeated use;
(iii) specially designed to facilitate the carriage of goods, by one or more modes of transport, without intermediate reloading;
(iv) designed for ready handling, particularly when being transferred from one mode of transport to another;
(v) designed to be easy to fill and to empty; and
(vi) having an internal volume of one cubic metre or more;
The term "container" shall include the accessories and equipment of the container, appropriate for the type concerned, provided that such accessories and equipment are carried with the container. The term "container" shall not include vehicles, accessories or spare parts of vehicles, or packaging. Demountable bodies, are to be treated as containers.
Customs Convention on Containers, 1972, Ch. 1, Art. 1(c), et seq.
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