BOR-4-07:R:IT:EC 116058 TLS
Ms. Laurie Peach
National Manager/Trade Services
American Honda Motor Co., Inc.
1919 Torrance Boulevard
Torrance, California 90501-2746
RE: Instruments of International Traffic; 19 U.S.C. §1322(a); 19 CFR 10.41a(a)(1); Steel Crates; Plastic Transmission Totes; Harmonized Tariff Schedule of the United States Annotated (HTSUSA) heading 8609.00.00.
Dear Ms. Peach:
This is in response to your letter, dated September 9, 2003, requesting a ruling concerning whether various types of steel crates, plastic transmission totes, and the parts used to repair the steel crates, qualify as instruments of international traffic under 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1). You also inquire about the proper classification of the steel crates under HTSUSA.
FACTS:
American Honda Motor Co., Inc. (hereafter also referred to as “Honda”) plans to use steel crates and plastic transmission totes as reusable shipping containers to import auto parts through the ports of El Paso, Laredo, Los Angeles/Long Beach, New York, New Jersey, Oakland, Seattle, and Tacoma. The steel crates come in two different types: 1) “large, collapsible steel crates designed to fit into standard ocean shipping containers” (hereafter referred to as “ocean steel crates”); and 2) “large, collapsible steel crates designed for use with 53-foot over-the-road truck trailers” (hereafter referred to as “truck steel crates”).
The ocean steel crates fit two-high in a standard ocean container and when collapsed, 160 will fit into a 40-foot ocean container. The ocean steel crates will be used to transport Honda replacement parts from Europe and Japan to the United States. Upon being unloaded here in the United States, the ocean crates will be sent back to Europe or Japan either empty or filled with exported parts. The ocean crates are collapsible on four sides and have an open top. Their life expectancy is five years and approximately 5,000 ocean crates will be shipped in year 2003.
The truck steel crates will be imported empty and collapsed. They will be used to transport automobile parts between Honda facilities within the United States and from the United States to Honda facilities in Canada and Mexico. Among all of the truck steel crates, 15%-20% will be used for transport to Canada and Mexico and returned from those countries either empty and collapsed or filled with automobile, motorcycle, and power equipments parts. The crates have four collapsible sides and an open top. Their life expectancy is eight years and 17,500 truck crates will be imported from China.
The plastic transmission totes are specifically designed to transport automobile transmissions. They are used to transport remanufactured transmissions to Honda facilities in the United States and then to Honda facilities in Canada and Mexico. Upon being unloaded in Canada and Mexico, the totes are refilled with defective transmission cores and shipped back to the United States. The totes are made of “hard, durable, plastic referred to as high-density polyethylene.” Each tote is designed and shaped to accommodate one transmission. The life expectancy of the totes is about two and a half years, or ten complete trips through the supply chain. Approximately 38,500 totes are anticipated to be imported into the United States in year 2003.
The repair parts for the steel crates (both ocean and truck) are spare parts for minor repairs to shipping containers damaged during transportation. You state that these parts are specifically designed for these steel crates and cannot be used for any other purpose.
ISSUES:
Whether the steel crates, plastic transmission totes, and repair parts for the steel crates may be designated as instruments of international traffic under 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1).
Whether the truck steel crates, as described above, are properly classified under HTSUSA heading 8609.00.00.
LAW AND ANALYSIS:
Pursuant to 19 U.S.C. §1322(a), instruments of international traffic shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. Pursuant to 19 CFR 10.41a(a)(1), the Commissioner of Customs and Border Protection (CBP) is authorized to designate as instruments of international traffic such additional articles not specifically noted in that section. Such instruments may be released without entry or payment of duty.
To qualify as an instrument of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1), an article must be used as a container or holder. The article also must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See HTSUSA subheading 9803.00.50 and HQ 112303 (August 14, 1992). We have previously ruled on the qualifications of collapsible steel crates as instruments of international traffic. See HQ 112303, supra. In 112303, we ruled that collapsible steel packing crates used to import automobile engines qualified as instruments of international traffic. See also HQ 115959 (July 7, 2003).
We find that the collapsible steel crates in this case are of similar design, construction, and use as those crates that were the subject of ruling letters 112303 and 115959, except for those truck steel crates that will be used for transport within the United States after their importation. Thus, all of the ocean steel crates and those truck steel crates used in transport between the United States and Canada and Mexico meet the requirements for instruments of international traffic. The truck steel crates that will not be used for transport between the United States and at least one foreign country on a repeated basis do not meet the requirements for instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1). To the extent that the repair parts as described above cannot by themselves be used as containers or holders, they also do not meet the requirements for instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1).
We have also previously ruled on the use of plastic polyethylene totes as instruments of international traffic. See HQ 114482 (December 18, 1998). In ruling letter 114482, we ruled that totes made of high density polyethylene with a life expectancy of five to seven years met the requirements of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1). We find the plastic transmissions totes in this case to be of similar construction and proposed use. Thus, the totes in this case meet the requirements for instruments of international traffic.
Under General Rule of Interpretation (GRI) 1, HTSUSA, goods are to be classified according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. Though not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUSA. Customs believes the ENs should always be consulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The ENs describe the containers of heading 8609 as “…packing receptacles specially designed and equipped for carriage by one of more modes of transport (e.g., road, rail, water or air).” They are equipped with fittings (hooks, rings, castors, supports, etc.) to facilitate handling and securing on the transporting vehicle, aircraft or vessel. They are thus suitable for the “door-to-door” transport of goods, without intermediate repacking and, being of robust construction, are intended to be used repeatedly. The more usual type, which may be of wood or metal, consists of a large box equipped with doors, or with removable sides.
In HQ 954927 (September 22, 1993), so-called pancake containers, substantially similar to the steel crates in issue here, were found to be classifiable in heading 8609.00.00, HTSUSA. While the frame of the containers was equipped with holes at the bottom and pins at the top for stacking during transportation, they also had lifting channels to facilitate use by forklift trucks. The channels could also be used for tie-down purposes during transportation [aboard trucks, ships, etc.]. Cited with approval in HQ 954927 was Plus Computing Machines, Inc., v. United States, 44 CCPA 160, 167, C.A.D. 655 (1957), in which the expression “specially constructed” for a particular purpose was interpreted to mean that the purpose in question need not be the sole one served by the article and may not even be the principal one. It means merely that the article includes particular features which adapt it for that purpose. See also HQ 951388 (September 29, 1992).
The collapsible truck steel crates at issue contain lifting channels which facilitate use by forklift trucks but which also can be used for tie-down purposes during transportation. The crates are “specially constructed” for tariff purposes and are provided for in heading 8609.00.00, HTSUSA.
HOLDING:
The collapsible steel crates for use in ocean transport, and the steel crates for use in truck transport that will be used to transport merchandise between the United States and at least one foreign country on a repeated basis, are hereby designated as instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and pursuant to 19 CFR 10.41a(a)(1).
The steel crates for use in truck transport that will not be used to transport merchandise between the United States and at least one foreign country on a repeated basis do not meet the requirements for instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1).
The repair parts to be used to repair the steel crates used in ocean or truck transport, and not as containers or holders by themselves, do not meet the requirements for instruments of international traffic within the meaning of 19 U.S.C. §1322(a) and 19 CFR 10.41a(a)(1).
The steel crates for use in truck transport, whether or not they qualify as instruments of international traffic, are properly classified under HTSUSA heading 8609.00.00.
Sincerely,
Glen E. Vereb
Chief
Entry Procedures and Carriers Branch