OT:RR:BSTC:CCR H321597 JLE
Lydia Moya
VP Customs Brokerage
JF Hillebrand USA, Inc.
2147 Route 27
Edison, New Jersey 08817
RE: Instruments of International Traffic; 19 U.S.C. § 1332(a); §§ 10.41a(a)(1), 10a(a)(2); JF Hillebrand USA Inc.; polypropylene insulation liners; accessories
Dear Ms. Moya:
This is in response to your October 20, 2021, ruling request on behalf of JF Hillebrand USA, Inc. In your request you inquire whether certain container insulators qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1332(a). Our ruling is set forth below.
Facts
The following facts are from your ruling request and supplements thereto. The subject items are insulation liners called VinLiners, a multipurpose protection system, designed and produced to cater to the needs of the beverage industry. Specifically, these liners are used for the exportation of California beverages to places with varying climates. The subject VinLiners reduce the effects that thermal shocks, potential cross contamination, odors, and humidity infiltration may cause to sensitive cargos in transit. They consist of an aluminum coated woven polypropylene fabric. Some VinLiner options provide a flooring option made from a reinforced polypropylene material. The liner is secured to dry containers or over pallets, using C-mouth clips, tensioning cords, hooks and a “lock.”
The VinLiners are manufactured in South Africa. They are installed to containers in Oakland, California. The subject VinLiners are “a one-way device.” They are used in approximately 600 exports a year. They also have a lifespan for up to three years provided the liner is properly stored.
Issues
Whether the subject VinLiners qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Whether the subject VinLiners qualify for consideration as accessories to IITs within the meaning of 19 C.F.R. § 10.41a(a)(2).
Law and Analysis
Per 19 C.F.R. § 141.4(a), “all 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 (“IIT”). 19 C.F.R. § 141.4(b)(3).
Subheading 9803.00.0, 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). 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 used as a container or holder must be: (1) substantial, (2) suitable for and capable of repeated use, and (3) used in significant numbers in international traffic. See HQ H291037 (Jan. 9, 2018); 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).
CBP has previously declared an IIT made from polypropylene as substantial. See HQ 114238 (Sep. 20, 1998). The VinLiners are substantial insomuch they are made of aluminum coated woven polypropylene fabric and have a lifespan of three to five years. However, inasmuch as you state that they are not suitable for or capable of repeated use, despite the significant number used in international traffic, the subject VinLiner does not qualify for consideration as an IIT.
ISSUE 2
Insofar as the subject VinLiners are used with and specifically designed for use with shipping containers, we also consider whether they may be classified as accessories to IITs under 19 C.F.R. §10.41a(a)(2) or (a)(3). CBP has consistently held that shipping containers are “containers” and IITs. See, e.g., HQ H251366 (June 4, 2014) (finding that reefer shipping containers are IITs); HQ H044900 (Dec. 18, 2008) (holding that “it is well settled that intermodal cargo containers qualify as ‘instruments of international traffic.’”); HQ 113003 (Jan. 27, 1994)(holding that intermodal cargo containers qualify for treatment as IITs); HQ 116684 (Aug. 17, 2006) and HQ W116719 (Nov. 30, 2006) (holding that intermodal containers are IITs).
Pursuant to 19 C.F.R. § 10.41a(a)(3), an IIT “includes the normal accessories and equipment imported with any such instrument which is a ‘container’ as defined in Article 1 of the Customs Convention on Containers.” See 19 C.F.R. § 10.41a(a)(3). (Emphasis added) Although shipping containers fall within the definition of containers under the Convention, because the subject VinLiners are not imported in the containers for which they will be used and are only used as a one-way device, they cannot qualify as accessories to IITs under 19 C.F.R. § 10.41a(a)(3).
Pursuant to 19 C.F.R. § 10.41a(a)(2),
(2) Repair components, accessories, and equipment for any container of foreign production which is an instrument of international traffic may be entered or withdrawn from warehouse for consumption without the deposit of duty if the person making the entry or withdrawal from warehouse files a declaration that the repair component was imported to be used in the repair of a container of foreign production which is an instrument of international traffic, or that the accessory or equipment is for a container of foreign production which is an instrument of international traffic. The Center director must be satisfied that the importer of the repair component, accessory, or equipment had the declared intention at the time of importation.
As discussed above, CBP has previously designated shipping containers as being IITs. In the present case, the subject VinLiners are used to maintain an ideal temperature for the products. CBP has designated items with similar purposes as accessories of IITs. See HQ 116575 (Jan. 16, 2006) (holding that a shock/climate measuring device attached to intermodal containers was an accessory to an IIT under 19 C.F.R. § 10.41a(a)(2)). However, HQ 116684 (Aug. 17, 2006) found that accessories to IIT are “substantial, suitable for and capable of repeated use with intermodal containers which are IITs and will serve as accessories or equipment for such containers.” As discussed above, inasmuch as you have stated that the subject VinLiners are substantial but are not suitable for, or capable of, repeated use, they cannot be classified as an accessory to IITs.
Holding
The subject VinLiners are not IITS within the meaning of 19 U.S.C. § 1322(a) and § 10.41a(a)(1), because they are not suitable for and capable of repeated use.
Additionally, the subject VinLiners are not accessories to IITs within the meaning of 19 C.F.R. § 10.41a(a)(2) or 19 C.F.R. § 10.41a(a)(3), because they are not suitable for and capable of repeated use.
Sincerely yours,
W. Richmond Beevers. Chief
Cargo Security, Carriers, and Restricted
Merchandise Branch
Office of International Trade, Regulations
and Rulings
U.S. Customs and Border Protection