BOR-4-07-RR-BSTC:CCI H079697 GOB
Margaret R. Polito, Esq.
Neville Peterson LLP
17 State Street, 19th Floor
New York, NY 10004
RE: Instruments of international traffic; 19 U.S.C. 1322; 19 CFR 10.41a; Hangers
Dear Ms. Polito:
This is in response to your letter of October 7, 2009 on behalf of Target Corporation (“Target”), in which you request a ruling that certain garment hangers be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. You have provided samples of the hangers at issue. Our ruling is set forth below.
FACTS:
Target is one of the United States’ largest mass market retailers. It has entered into a program with its vendors under which it will import garments shipped on recyclable hangers. The “garments on hangers” will be shipped from vendors to Target distribution centers throughout the United States and then to Target’s retail stores. Upon sale of the garments, the hangers will be placed in a bin at the point of sale for recycling. Target will collect the hangers and ship them to Braiform Industries (“Braiform”) for reuse. Braiform is the manufacturer and recycler of the hangers.
Target’s request involves the following 30 hanger styles – CT-10, CT-12, CT-15, CT-17, CT-19, CPT-15, CPT-17, CPT-19, CPT-10, HTK-17, R-719, R-716, CJT-3936, CJT-1344, CJT-634, CJT-638, CJT-645, CJT-650, CPC-8, CPC-10, CPC-12, CPC-14, CFC-288, CLC-8, CLC-12, LV-105, LV-95, K-75, K-95, and K-120.
You state that the hangers are built from sturdy plastic and are capable of reuse. Each style of hanger features sturdy plastic hooks. Certain hangers have notches for placing thin-shouldered garments or grippers to hold lower body garments. Some of the hangers feature a flat top, where size information can be appended. Target estimates that each hanger will be reused four times.
Target states that there are vast numbers of the subject hangers in use, e.g., in the millions or hundreds of thousands for many of the types of hangers at issue. Braiform estimates that it recycles more than 200 million hangers annually through this program.
ISSUE:
Whether the subject items may be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a.
LAW AND ANALYSIS:
Title 19, United States Code, section 1322(a) (19 U.S.C. § 1322(a)) provides in pertinent part, that “[v]ehicles and other instruments of international traffic … shall be excepted from the application of the customs laws to such extent and subject to such terms and conditions as may be prescribed in regulations or instructions …”
The Customs and Border Protection (“CBP”) Regulations issued under the authority of 19 U.S.C. § 1322(a) are contained in 19 CFR § 10.41 et seq. Section 10.41a(a)(1), CBP Regulations (19 CFR § 10.41a(a)(1)) designates lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments for international traffic.
Section 10.41a(a)(1), CBP Regulations (19 CFR § 10.41a(a)(1)) also authorizes the Commissioner of CBP to designate as instruments of international traffic such additional articles or classes of articles as he shall find should be so designated. Instruments so designated may be released without entry or the payment of duty, subject to the provisions of 19 CFR § 10.41a.
To qualify as an instrument of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a, an article must be used as a container or holder. Further, the article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See, e.g., Headquarters rulings (“HQ”) 108084, 108658, 109665, and 109702.
In Holly Stores, Inc. v. U.S., 697 F.2d 1387, 1388 (Fed. Cir. 1982), aff’g 534 F. Supp. 818 (Ct. Int’l Trade 1981), the court stated with respect to former General Headnote 6(b):
“Reuse” in this context has been consistently interpreted to
mean practical, commercial reuse, not incidental reuse.
Fontana Hollywood Corp. v. United States, 64 Cust. Ct. 204,
C.D. 3981 (1970), relying on Tariff Classification Study,
Seventh Supplemental Report (Aug 14, 1963) at 99.
The court in Holly Stores rejected the concept of reuse with respect to the hangers at issue there based upon the lower court’s finding that only about one percent of the hangers were reused in any manner at all, and that those uses were noncommercial. The court did accept the facts that the hangers were of fairly durable construction and that it would be physically possible to reuse them.
Within the context of 19 CFR § 10.41a and instruments of international traffic, we have held that “repeated use” means “more than twice.” See, e.g., HQ 108658, dated November 21, 1986.
Our examination of the hangers submitted as samples reveals that they are of relatively durable construction. We therefore conclude that they are physically capable of, and suitable for, reuse or repetitive use. The hangers are of a type such that they will be used numerous times in very significant numbers in international traffic.
The reuse which Target describes and proposes is a “commercial reuse,” i.e., the hangers will continue to be used in the commercial transportation of garments.
CBP has previously ruled on the instruments of international traffic status of hangers of similar material and purpose. In HQ 115684, dated August 5, 2002, CBP held that plastic garment hangers with wire swivel hooks that are used to package garments for exportation to the U.S. are substantial, suitable for repeated use, used in significant numbers in international traffic, and therefore qualify as instruments of international traffic. Furthermore, CBP has previously held that hangers that are part of a hanger recovery program qualify as instruments of international traffic. See HQ 114360, dated June 18, 1998, which involved used, clear plastic garment hangers that were acquired in the U.S. from clothing retailers, sorted, sanitized, packaged, and exported to garment manufacturers worldwide and then were used in the packaging of garments to be exported to the U.S. See also HQ H042107, dated November 24, 2008, where CBP held that plastic garment hangers used in a hanger recovery program qualify as instruments of international traffic and HQ H050604, dated March 18, 2009, where CBP held that plastic garment hangers qualify as instruments of international traffic.
After a review of the information and sample hangers submitted, we determine that the subject hangers are used as holders, are substantial, are suitable for and capable of repeated use, and are used in significant numbers in international traffic. Thus, they meet the criteria for designation as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1) and are so designated. Because the subject items are designated as instruments of international traffic, they are not subject to entry or the payment of duty pursuant to the aforementioned statutory and regulatory authority. We note, however, that if the subject hangers are diverted from international traffic, they will cease to be considered instruments of international traffic and will therefore not receive the treatment accorded to such articles.
HOLDING:
The subject hangers are hereby designated as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR § 10.41a(a)(1).
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers and Immigration Branch