OT:RR:BSTC:CCR H254052 DAC
Jason Kim
LG Siltron America, Inc.
2540 N. First St., Suite 400
San Jose, CA 95131
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1);
HTSUS subheading 9803.00.50; LG Siltron America, Inc. (“LG”); polypropylene plastic crates, “Hybox” collapsible crates.
Dear Mr. Kim:
This is in response to your April 10, 2014, ruling request on behalf of LG Siltron America, Inc. (“LG”). Your request was referred to this office for determination by the National Commodity Specialist Division for our direct response to you. In your letter, you request a ruling concerning whether a certain collapsible plastic shipping system qualifies as an instrument of international traffic (IIT) and is 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 and from your email of July 1, 2014. The subject collapsible plastic crates are a reusable shipping system primarily used for transportation of silicon wafers. The subject collapsible plastic crate is referred to as a “Hybox” and is composed of a heavy-duty polypropylene. Inside the interior of the Hybox collapsible plastic crate is an internal front opening shipping box system (“FOSB”) consisting of silicon wafer holding plastic cassettes and foam damping inserts. The Hybox and FOSB silicon wafer shipping system consists of several parts that are used together (to include a stable lid, two loading hatches, a pallet surface, wafer cassettes, and foam damping inserts) that must be used together and are returned together as a shipping system. LG imports silicon wafers into the U.S. from its parent company and wafer manufacturer, LG Siltron Inc., in Korea.
The silicon wafers contained in the Hyboxes are shipped from Incheon, Korea and imported into the U.S. through San Francisco and New York to Virginia and Utah. Currently there are about two hundred Hyboxes arriving in the U.S. per month, and it generally takes three to four months to complete a full usage cycle for a Hybox to return to LG for future re-use. The estimated life expectancy of a Hybox is about thirteen (13) complete cycles of silicon wafer transportation usage. The subject Hyboxes are acquired by LG from the German manufacturer WALTHER Faltsysteme.
The exterior dimensions of the Hybox are (length by width by height) 1200 x 1000 x 1080 mm. The Hybox has a capacity of 1.3 cubic meters and a load capacity of 3,000 kgs. The empty Hybox weighs approximately 45 kgs. You state the subject plastic crates are produced in Germany. You further state the subject collapsible plastic crates will not enter the domestic commerce of the United States and that they are tracked with linear barcodes and an alpha-numeric serial number system. Below are images of the subject external Hybox collapsible plastic crates and the interior FOSB silicon wafer shipping components.
Collapsible plastic crate with sides folded
Collapsible plastic crate (“Hybox”)
“Hybox” FOSB interior silicon wafer shipping system
ISSUE
Whether the subject Hybox collapsible plastic crates and FOSB silicon wafer shipping system qualify as 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 CBP has previously considered similar articles designed to hold merchandise for transportation in commerce can qualify as “instruments of international traffic.” In HQ 116641 (June 15, 2006), we examined the use of reusable plastic cassettes for the shipment of finished computer hard disks. The cassette body consisted of three pieces; a top piece and bottom piece consisting of polypropylene, and a middle piece, consisting of polycarbonate, which held the disks. In that matter, finished disks were placed into the cassette body, one disk per slot, for a total 25 disks per cassette. We are of the opinion that the subject front opening shipping boxes, or “FOSB” boxes, are sufficiently similar in function and design to be analogous to the cassettes discussed in HQ 116641.
Similarly, in HQ 115108 (Aug. 24, 2000), we examined shipping hampers designed to protect delicate ceramic logs during transit. The hampers consisted of pallets and tops, plastic outer rings, plastic and cardboard pads, and form trays. The plastic bottom pallet formed the bottom of the hamper; the plastic top pallet formed the cover or lid of the hamper; the plastic outer ring formed the four sides of the hamper and could be folded down for return voyages; the plastic pad was placed on the top of the bottom pallet; the form tray was used to stack the ceramic logs within the hamper; and, the cardboard pad was used between each ceramic log. Likewise, HQ 112503 (Dec. 2, 1992), we examined certain collapsible, hardwood containers utilized for the transport and protection of large rolls of audio and visual magnetic tape. These containers were constructed of hardwood and reinforced steel and/or cast iron panels, and were self-collapsing, able to be folded for efficient storage and transport. We are also of the opinion that the subject Hyboxes and FOSB are similar in function to the articles designated as IITs in ruling HQ 115108 and HQ 112503.
Additionally, most recently, in HQ H218556 (May 24, 2012), CBP examined another similar polypropylene foldable Hybox and FOSB silicon shipping system and held that the Hybox (also referred to as Sky Cubes) and FOSB silicon wafer shipping system were “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. We are of the opinion that the subject Hyboxes and FOSB silicon wafer shipping system is quite similar in function to the articles designated as IITs in ruling HQ 218556.
Based upon review of the submission and information provided, the subject Hybox plastic collapsible crates and FOSB silicon wafer shipping system 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 thirteen reusable use cycles and hundreds such crates are to be used in international traffic. Furthermore, CBP has previously ruled that items of similar use and construction as the subject merchandise qualify as “instruments of international traffic” pursuant to 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. See HQ H218556 (May 24, 2012). 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 Hybox collapsible plastic crates and FOSB silicon wafer shipping system do qualify as 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