CLA-2 CO:R:C:F 956547 ALS
Mr. Frank Parker, Jr.
Parker and Co.
U.S. Customs Broker
P.O. Box 271
Brownsville, TX 78521
RE: Reusable Plastic Shipping Containers from Mexico; Article 509, NAFTA
Dear Mr. Parker:
This is in reference to your request of May 4, 1994, concerning
classification, value and entry aspects of importing the subject items. This
response will be limited to the classification of the shipping containers.
FACTS:
The subject containers are in the form of plastic open shipping tubs and
pallets in different sizes which are manufactured in Mexico. The containers are
made from sheets of plastic manufactured in the United States which are thermo-
formed in molds in Mexico. The containers are used to transport raw materials
and finished products between the plants in Mexico and the U.S. The pallets and
tubs are substantial, suitable for and capable of repeated use, and used in
significant numbers in international traffic. The plastic containers have been
designated as instruments of international traffic and are presently released
without entry or the payment of duty, subject to the relative provisions of the
Customs Regulations.
ISSUE:
What is the classification of the tubs and pallets use in the international
transportation of raw materials and finished products?
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LAW AND ANALYSIS:
Classification of merchandise under the Harmonized Tariff Schedule of the
United States Annotated (HTSUSA) is governed by the General Rules of
Interpretation (GRI's) taken in order.
GRI 1 provides that the classification is determined first in accordance with
the terms of the headings and any relative section and chapter notes. If GRI
1 fails to classify the goods and if the headings and legal notes do not
otherwise require, the remaining GRI's are applied, taken in order.
In considering the classification of the subject shipping tubs and pallets
we noted that they, although differing in shape, perform a similar function.
They facilitate the shipment of merchandise or materials between different
locations. We note that the tubs and pallets are substantial, suitable for and
capable of repeated use, and are used in significant numbers in international
traffic. Further, the articles have been designated as instruments of
international traffic and may be released without entry or the payment of duty
pursuant to the provisions of section 10.41a, Customs Regulations (19 CFR
10.41a).
The ruling request states that these items have been entered free of duty
pursuant to NAFTA under subheading 3923.10.0000, HTSUSA. The provision covers
boxes, cases, crates and similar articles of plastics designed for the conveyance
or packing of goods. We agree that both the tubs and pallets are used for
conveyance purposes and that the tubs would be classifiable in such subheading.
However, pallets of plastics, as we noted in Headquarters Ruling Letter (HRL)
955283, issued March 17, 1994, are not classifiable under that provision. That
ruling held that plastic pallets are classifiable under the provision for other
articles of plastics used for the conveyance or packing of goods.
Both of the subject products are fabricated in Mexico from plastic sheeting
produced in the United States.
HOLDING:
Open tubs of plastics used to facilitate the transportation of products
between various locations are classifiable in subheading 3923.10.0000, HTSUSA,
and are subject to a general rate of duty of 3 percent ad valorem.
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Pallets of plastics used to facilitate the transportation of products
between various locations are classifiable in subheading 3923.90.0000, HTSUSA,
and are subject to a general rate of duty of 3 percent ad valorem.
Since the finished products are fabricated in Mexico from sheets which
are manufactured in the United States and are considered originating materials,
they are eligible for preferential treatment under NAFTA pursuant to General Note
12(b)(iii), HTSUSA. Such merchandise, produced in Mexico, is eligible for a free
special rate of duty.
Sincerely,
John Durant, Director
Commercial Rulings Division