BOR-07-OT:RR:BSTC:CCR H285811 SWM
Ms. Danielle Sebring
JTEKT North America
29570 Clemens Road
Westlake, Ohio 44145
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. §§ 10.41a(a)(1); HTSUS subheading 9803.00.50; JTEKT; Uni-Pak Shipping Systems; Collapsible boxes; plastic bins.
Dear Ms. Sebring:
This is in response to your May 1, 2017, ruling request on behalf of JTEKT Automotive Tennesee – Vonore, L.L.C. (“JTEKT”). In your submission, you request a ruling concerning whether certain reusable plastic boxes/bins, trays, Uni-Pak plastic pallets and sleeve packs (together, the “subject articles”), 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 from your May 1, 2017 ruling request and your May 31, 2017, June 27, 2017, July 6, 2017, and July 21, 2017 e-mails. The subject articles are various plastic boxes, bins, and a shipping system composed of trays, Uni-Pak sleeves, and plastic pallets, owned by JTEKT and used to ship automotive components, steering systems, and bearings from JTEKT’s parent company in Japan to its plant located in Vonore, Tennessee. The specific articles encompassed by this ruling include four sizes of collapsible boxes with a life expectancy of three to five years (the “Collapsible Boxes”); and three types of solid polypropylene bins and boxes with a life expectancy of five to seven years (the “Bins”). The Collapsible Boxes and Bins are used to ship automobile parts.
In addition to the Collapsible Boxes and Bins, JTEKT uses a shipping system to transport other automobile parts. The shipping system is composed of multiple parts that can be separated and collapsed for return to Japan. The shipping system is composed of two types of plastic trays with life expectancies of three to five years that are used to hold and protect parts that are loaded into Uni-Pak Sleeves and then stacked on a plastic pallet with a plastic cover (the “Plastic Trays”); two types of plastic Uni-Pak pallets and tops which consist of twin-sheet thermo-formed plastic and have a life expectancy of ten years (the “Pallets” and “Tops”); and six sizes of Uni-Pak sleeves comprised of heavy duty triple-wall corrugated sleeve with life expectancies of approximately two years or 50 to 100 uses (the “Sleeves”) (when assembled, the “shipping system”). You provided us with specifications for each subject article.
Once each shipment reaches Tennessee, it is unpacked and all subject articles are moved to a staging area in the plant to be held for return to Japan. Components of the shipping system are broken down into individual parts for return to Japan. All of the subject articles are returned back to Japan in sea containers weekly. None of the subject articles will remain in the United States. On average, you anticipate that the Collapsible Boxes and Bins will circulate through the transportation cycle every ten to twelve weeks. Approximately 68 shipping systems travel from Japan to Tennessee each month and there are approximately 60,000 shipping systems in total. Usually, all components of the shipping system are broken down and shipped from Japan to Tennessee at the same time - the week they arrive in the U.S. Occasionally, you anticipate that shipping system components may remain in the U.S. for an additional week before return to Japan, depending on the volume of different parts to be returned and the most efficient use of space in each ocean container.
The Bins are each marked with the JTEKT logo and a bin type number. The Pallets are stamped with a serial number. The subject articles are tracked from Japan, however not in the United States. There are varying quantities of each type of article, ranging from 500 each (some of the shipping system components), to 3,800 (one type of the Collapsible Boxes).
Below are a sampling of the images you provided.
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ISSUE
Whether the subject Collapsible Boxes and Bins are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Whether the subject shipping systems 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 C.F.R. § 141.4(a), “[a]ll merchandise imported into the United States is required to be entered, unless specifically excepted.” The four exceptions to the requirement of entry are listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic. 19 C.F.R. § 141.4(b)(3).
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.
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 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.
To qualify for entry-free and duty-free treatment as IITs under the aforementioned statutory and regulatory authority, the article must be a substantial container or holder. As stated above, CBP is authorized to designate as an IIT such additional articles not specifically noted in 19 C.F.R. § 10.41a(a)(1). Historically, CBP has held in its published decisions that in order to qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), an article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See HQ H016491 (Oct. 1, 2007); HQ 114150 (Dec. 12, 1997); HQ 107545 (May 7, 1985); Treas. Dec. 71-159, Cust. B. & Dec. 296 (June 18, 1971); 99 Treas. Dec. 533, No. 56247 (Aug. 26, 1964).
The Collapsible Boxes and Bins
CBP has consistently held that collapsible plastic containers used to ship automobile parts are IITs. See HQ H252710 (May 19, 2014) (plastic pallets); HQ 116555 (Oct. 25, 2005) (plastic tote bins); HQ H071856 (Sept. 14, 2009) (plastic bins); HQ 112534 (Jan. 25, 1993) (reusable plastic boxes). Based upon a review of the information you submitted, the Collapsible Boxes and Bins are IITs in that they are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. The Collapsible Boxes and Bins are substantial in that they are made of sufficiently durable plastic and have life expectancies from three to seven years. They are capable of and suitable for reuse in that the Collapsible Boxes and Bins will travel through the transportation cycle every ten to twelve weeks for the duration of their respective life expectancies. They are used in significant numbers in international commerce in that there are 5,960 Collapsible Boxes and 420 Bins. Based on the foregoing, the Collapsible Boxes and Bins 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 subheading 9803.00.50 HTSUS.
The Uni-Pak Shipping Systems
Further, CBP has held that specific packaging solutions similar to the Uni-Pak shipping system in the present case, are IITs. In HQ H218556 (May 24, 2012), CBP held that all the parts of a shipping system composed of a specially designed plastic box holding computer chips, that was then sealed with a protective covering and placed into a second plastic and foam container and secured by a plastic shell constituted IITs. HQ H218556 relied in part on HQ H115108 (Aug. 24, 2000), in which CBP held that shipping hampers designed to protect ceramic logs during transit were IITs. The hampers were composed of a plastic bottom pallet, a plastic outer ring, which formed the sides, a plastic pad on top of the bottom pallet, a tray used to stack the logs within the hamper, and a plastic top pallet serving as a cover or lid were IITs. Similarly, in HQ H253872 (Aug. 1, 2014), CBP held that the shipping system at issue, composed of a pallet at the base, a sleeve making up the sides, and a lid as a top to the container qualified as IITs.
Based upon a review of the information you submitted, the shipping systems are IITs in that they are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. They are substantial in that they are made of sufficiently durable plastic and the component parts have life expectancies from two to ten years. They are used in significant numbers in international commerce, and suitable for and capable of reuse in that there are approximately 60,000 shipping systems in total and approximately 68 shipping systems will travel through the transportation cycle each month for the duration of their life expectancies. Based on the foregoing, the shipping systems 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 subheading 9803.00.50 HTSUS.
HOLDING
The subject Collapsible Boxes and Bins are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
The subject shipping systems 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