OT:RR:BSTC:CCR H253872 DAC
Marcela B. Stras
Cozen O’Connor
The Army and Navy Club Building
1627 I Street, NW, Suite 1100
Washington, DC 20006
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1);
HTSUS subheading 9803.00.50; CHEP Intercontinental Containers Ltd. (“CHEP”); plastic crates, automotive crates.
Dear Ms. Stras:
This is in response to your March 20, 2014, ruling request on behalf of your client CHEP Intercontinental Containers Ltd. (“CHEP”). In your letter, you request a ruling concerning whether certain plastic crates qualify as instruments of international traffic (IIT) and are therefore, classifiable under subheading 9803.00.50 of the Harmonized Tariff Schedule of the United States (HTSUS). Our decision follows.
FACTS
The following facts are recited from your ruling request, from your email of May 30, 2014, and from relevant information published by CHEP on the internet. The subject plastic crates are primarily used for transportation by the automotive industry, but they are also used to carry bulk foods, grains, cereals, nuts and light manufacturing parts. The CHEP IcoQube™ is composed of a pallet at the base, a sleeve (which makes up the sides), and a lid as a top to the container, and you state that all of these components are used together as a single container unit that are collapsible, reusable and recyclable. The CHEP IcoQube™ is a specific packaging solution designed for intercontinental transport. It comes in four foldable sizes specifically designed to maximize sea container capacity. The IcoQube has a four-way access system for forklift trucks, two folding lids for simple filling and emptying and is RFID compatible.
There are four variations of the CHEP IcoQube with the similar construction and slightly different dimensions and capacities. The four IcoQube models are designated as IcoQube 1, 2, 3, and 4. The dimensions of the IcoQube 1 are (length by width by height) 1145 x 980 x 1107 mm. The IcoQube 1 has a capacity of .96 cubic meters and a load capacity of 400 kilograms (kgs). The IcoQube 1 weighs 29.3 kgs without merchandise inside. The dimensions of the IcoQube 2 are (length by width by height) 1150 x 975 x 476 mm. The IcoQube 2 has a capacity of .58 cubic meters and a load capacity of 300 kgs. The IcoQube 2 weighs 24.7 kgs without merchandise inside. The dimensions of the IcoQube 3 are (length by width by height) 975 x 770 x 476 mm. The IcoQube 3 has a capacity of .38 cubic meters and a load capacity of 250 kgs. The IcoQube 3 weighs 16.5 kgs without merchandise inside. The dimensions of the IcoQube 4 are (length by width by height) 1150 x 975 x 845 mm. The IcoQube 4 has a capacity of .69 cubic meters and a load capacity of 300 kgs. The IcoQube 4 weighs 25.7 kgs without merchandise inside. You state the subject plastic crates are principally produced in Europe. You further state the subject plastic crates will not enter the domestic commerce of the United States and that they are tracked with linear barcodes and two-dimensional data matrix barcodes.
You state that the empty plastic crates are shipped to CHEP service centers in the United States from CHEP overseas locations. When the United States CHEP service center receives the crates they are shipped to an automotive component supplier in the U.S. who loads the containers with merchandise and ships them to a foreign automotive manufacturer. The foreign automotive manufacturer empties the containers, which are then collected by CHEP and sent to the closest CHEP overseas service center for inspection and cleaning. This process is a recurring cycle and is repeated continuously. You state that the subject plastic crates will be used primarily between Ohio in the United States and the United Kingdom in Europe, with possible service expansion into other areas. You state there are thousands of automotive crates currently in use in international commerce and they are utilized repeatedly for the life of the container, which is estimated to be approximately seven years. The expected lifespan of each crate is for each to be used repeatedly twenty-one times over a period of seven years. Below are images of the subject plastic crates.
CHEP Plastic Crate: IcoQube
Plastic Crate Lid
Plastic Crate Sleeve
Plastic Crate Pallet
ISSUE
Whether the subject plastic crates are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
LAW AND ANALYSIS
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 Customs and Border Protection (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.
Subheading 9803.00.50, 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 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.
We note that it is well-settled that CBP has consistently designated certain containers designed to hold automotive parts can qualify as “instruments of international traffic.” See, HQ 115959 (July 7, 2003), collapsible steel crates used to transport automotive parts imported into the United States can be designated as “instruments of international traffic.”; HQ 112303 (Aug. 14, 1992), collapsible steel packing crates to import automobile components are “instruments of international traffic”; HQ 109665 (Sept. 12, 1988), collapsible wire mesh containers, made of iron or steel, used for the ocean freight shipment of automotive spare parts are “instruments of international traffic”; HQ 111163 (Mar. 26, 1991), collapsible steel packing crates for shipments of automobile components from Japan for assembly in the United States are “instruments of international traffic.”
In HQ 114506 (Oct. 29, 1998), CBP determined that collapsible plastic containers used to ship various small automobile replacement parts from Japan to the United States met the requirements necessary for designation as “instruments of international traffic.” See HQ 112534 (Jan. 25, 1993), holding that reusable plastic boxes used to import automobile component parts qualified as “instruments of international traffic”; HQ 116555 (Oct. 25, 2005), designation of plastic tote bins used to transport automotive parts as “instruments of international traffic”. See also HQ H024922, (Apr. 30, 2008); HQ H025196 (May 15, 2008); HQ H036108 (Aug. 27, 2008); H218556 (May 24, 2012); HQ H252710 (May 19, 2014).
Based upon review of the submission and information provided, the subject plastic automotive crates are containers that are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. The subject plastic crates are made of sufficiently durable plastic that allows them to be used repeatedly to transport merchandise in international traffic. They have a useful life of approximately seven years and since thousands of such crates are currently in international commerce, they will be used in significant numbers in international traffic. Based on the foregoing, the subject plastic crates are designated as IITs; therefore, they will qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and HTSUS subheading 9803.00.50.
HOLDING
The subject plastic crates are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Sincerely,
Lisa L. Burley
Chief/Supervisory Attorney-Advisor
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection