BOR-4-07:OT:RR:BSTC:CCI H217477 ALS

Ms. Kim Shultz
Manager of Customs Compliance
Dick’s Sporting Goods
345 Court Street
Coraopolis, Pennsylvania 15108

RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 CFR 10.41a; Substantial Containers or Holders; Harmonized Tariff Schedule of the United States Annotated (HTSUSA) subheading 9803.00.50; HTSUS, U.S. Note 1(a), Chapter 98, Subchapter III; HTSUSA, General Rule of Interpretation [GRI] 5(b); Plastic Garment Hangers

Dear Ms. Shultz:

This is in reference to your request for a ruling, dated April 16, 2012, in which you inquire whether or not several styles of garment hangers qualify as “instruments of international traffic” (IITs) within the meaning of 19 U.S.C. § 1322(a) and 19 CFR 10.41a and may be released without entry or the payment of duty. The ruling request also inquires whether or not the hangers are classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheading 9803.00.50 as substantial containers or holders.

FACTS

You state that you use Voluntary Interindustry Commerce Standards (VICS) black clothing hangers with metal hooks made of polypropylene or polystyrene. You estimate the useful life of the subject hangers is five cycles and approximately 3.3 million hangers are used annually. The hangers at issue are styles 484, 485, 489, HNT2, 3315, 3316, 3328, 3329, 6008, 6010, 6012, 6208, 6210, 6212, 7010, and 7012. A sample of each hanger has been submitted along with the request, with the exception of styles 489 and HNT2. You have provided style 498 (hereinafter referred to as “new 498”) as a sample for both style 489 and style HNT2, stating that “[new] 498 is the same as 489 & HNT2. Each hanger vendor uses [a] different reference for it.” The hangers are made of “the new black polypropylene or polystyrene material,” and are manufactured in various countries, including China, Indonesia, and Vietnam. All the hangers consist of a two part unit; the body of each hanger is made of the black polypropylene or polystyrene material, with metal hooks on top to complete the hanger. Styles 484, 485, new 498, 3315, 3316, 3328, and 3329 each have indented grooves on each side of the hanger to allow garments with straps to be placed inside them. Styles 6008, 6010, 6012, 6208, 6212, 7010, and 7012 each have spring-loaded metal grips attached to each end of the hanger body. You have submitted a photocopied brochure showing pictures and descriptions of the styles at issue. The brochure includes images of styles 489 and HNT2 showing that they are similar in shape and/or construction to new 498 in that they have indented grooves on each side of the hanger.

ISSUES:

Whether the plastic garment hangers described above may be designated as instruments of international traffic pursuant to 19 U.S.C. § 1322(a) and 19 CFR 10.41a.

Whether the plastic hangers described above may be imported as substantial containers or holders under HTSUSA subheading 9803.00.50, subject to the normally applicable merchandise entry requirements.

LAW AND ANALYSIS:

Before we address the whether or not the subject hangers are eligible to be entered under subheading 9803.00.50, we must determine if they may be designated as instruments of international traffic. Pursuant to 19 U.S.C. § 1322(a), instruments of international traffic (also referred to herein as “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. Pursuant to 19 CFR 10.41a(a)(1), the Commissioner of Customs and Border Protection (CBP) is authorized to designate as IITs such additional articles not specifically noted in that section. Once designated as such, the instruments may be released without entry or payment of duty.

To qualify as an IIT 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 Harmonized Tariff Schedule of the United States Annotated subheading 9803.00.50 and CBP Ruling HQ 112303 (August 14, 1992).

With regard to the plastic garment hangers at issue, we have ruled on articles of similar construction and purpose, as you note in your submission. In CBP Ruling HQ H183436 (January 19, 2012), we held that VICS black clothing hangers with metal hooks made of polypropylene or polystyrene qualified as IITs. That ruling cited Holly Stores, Inc. v. United States, 697 F.2d 1387 (Fed. Cir. 1982), which held that the concept of reuse referred to in numerous CBP rulings means the article is used for commercial shipping and transportation purposes, not non-commercial or fugitive uses. We further defined the concept of reuse in CBP Ruling HQ 116032 (October 30, 2003), in which we held that “reuse” in this context means using more than twice. See also CBP Ruling HQ H042107 (November 24, 2008). In this case, you state that the plastic garment hangers will be collected from retail stores after shipment for reuse. We note that the subject hangers are of similar design and construction as those we ruled upon in H050604 (March 18, 2009), and we also note the following:

General Rule of Interpretation [GRI] 5(b), HTSUSA, provides: Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

CBP has previously ruled that certain garment hangers are suitable for repetitive use as contemplated by GRI 5(b). See CBP Ruling HQ H117917 (October 13, 2010), citing several previous rulings. CBP has in fact ruled such for most of the hangers at issue. See CBP Ruling NY J88934 (October 31, 2003) [styles 484 and 3328]; CBP Ruling NY J88944 (October 31, 2003) [styles 6012, 6212, and 484]; CBP Ruling NY J88936 (October 31, 2003) [style 3329]; CBP Ruling NY J88941 (October 31, 2003) [style 3315]; CBP Ruling HQ H117917, supra [styles 485, 3316, and 7012]; CBP Ruling HQ 964365 (June 28, 2001) [styles 6008, 6010, 6012, 6014, 6208, 6210, 6212, and 6214].

CBP has not ruled upon styles 489 and HNT2 in this context. Given that CBP has previously ruled that styles 484, 485, 3315, 3316, 3328, 3329, 6008, 6010, 6012, 6208, 6212, 7010, and 7012 are suitable for repetitive use as contemplated by GRI 5(b), we find that those hangers are physically capable of, and suitable for, reuse or repetitive use.

Given such, we find that our analysis in H050604, H042107, and HQ 116032 applies to styles 484, 485, 3315, 3316, 3328, 3329, 6008, 6010, 6012, 6208, 6212, 7010, and 7012 as well. Consequently, we find that styles 484, 485, 3315, 3316, 3328, 3329, 6008, 6010, 6012, 6208, 6212, 7010, and 7012 are substantial, suitable for and capable of repeated use, and are used in significant numbers in international traffic within the meaning of HTSUS subheading 9803.00.50. Therefore, styles 484, 485, 3315, 3316, 3328, 3329, 6008, 6010, 6012, 6208, 6212, 7010, and 7012 qualify as IITs pursuant to 19 U.S.C. § 1322(a) and 19 CFR 10.41a(a)(1).

You contend that CBP Ruling NY J86669 (August 8, 2003), in which CBP found no evidence that style 498 [hereinafter “old 498”] was substantial, suitable for and capable of repeated use, is not applicable to styles 489 and HNT2 because these two styles are made of different material than old 498 was at the time CBP issued NY J86669. In J86669, CBP made the following determination: Hanger style 498 is of flimsier construction than the hangers of HQ 964963, 964964 and 964948. This office has no evidence that hangers of this construction are suitable for commercial reuse, and you have not submitted any information or documentation substantiating commercial reuse of this particular style or of styles of similar construction. If you have such evidence, you may resubmit your request with supporting documentation. Such documentation must include information demonstrating the number of times such hangers are reused for the commercial shipment of garments. Hangers that are not suitable for reuse in a commercial sense are classifiable with the garments with which they are imported.

Upon physical examination of the submitted sample of new 498, we find it to be of flimsier construction than similarly-shaped styles that we have previously found to be of substantial construction and suitable for reuse. In particular, it is noticeably thinner and can be bent more easily. There is no evidence that the difference in material between old 498 as it was ruled upon in J86669 and new 498 as submitted as a sample to us in the present case makes the style any more substantial or suitable for reuse. Thus, to the extent that you state that the subject styles 489 and HNT2 are the “same as” new 498, with each individual hanger vendor’s reference being the only difference, we find that styles 489 and HNT2 are not of substantial construction and are not suitable for reuse within the meaning of HTSUS subheading 9803.00.50. Therefore, styles 489 and HNT2 do not qualify as IITs pursuant to 19 U.S.C. § 1322(a) and 19 CFR 10.41a(a)(1).

(2) Subheading 9803.00.50 of the HTSUSA provides for the duty-free treatment of the following:

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…

Subheading 9803.00.50 is the only subheading in Subchapter III, Chapter 98, HTSUSA. U.S. Note 1(a) to Subchapter III, Chapter 98, provides, in pertinent part: This subchapter covers only the following: (a) Substantial containers or holders which are subject to tariff treatment as imported articles and are:

Imported empty and not within the purview of a provision which specifically exempts them from duty; or Imported containing or holding articles, and which are not of a kind normally sold therewith or are entered separately therefrom; ...

With regard to the subject hangers’ eligibility for duty-free entry under subheading 9803.00.50 as substantial containers or holders, we find the following. CBP has previously ruled that clear plastic garment hangers of similar construction are substantial holders within the meaning of subheading 9803.00.50 and therefore are eligible to be entered under 9803.00.50. CBP Ruling HQ H117917, supra; CBP Ruling HQ 114360 (June 18, 1998). Our previous rulings H117917 and 114630 are applicable in this case. Thus, the subject hangers are eligible for entry under HTSUSA subheading 9803.00.50, with the noted exceptions of styles 489 and HNT2.

HOLDING:

The subject plastic garment hangers as described above are hereby designated as IITs pursuant to 19 U.S.C. § 1322(a) and 19 CFR 10.41a(a)(1), with noted exceptions.

The subject plastic garment hangers as described above are eligible for entry under HTSUSA subheading 9803.00.50 to the extent that they are used repeatedly in accordance with GRI 5(b), HTSUSA, and pertinent CBP rulings, with noted exceptions.

Sincerely,

George Frederick McCray
Supervisory Attorney-Advisor/Chief
Cargo Security, Carriers, and Restricted Merchandise Branch
Office of International Trade, Regulations & Rulings
U.S. Customs and Border Protection