BOR-7-07-CO:R:IT:C 113339 GEV
Shannon Bastien
Emery Customs Brokers
9700 Highway 78
Ladson, South Carolina 29456
RE: Instruments of International Traffic; Containers; Repair Components; Bond Requirements;
19 U.S.C. 1322, 1623; 19 CFR 10.41a, 113.62
Dear Ms. Bastien:
This is in reference to your letter dated February 2, 1995, to the U.S. Customs Service in
Charleston, South Carolina, requesting a ruling on behalf of a potential client. Your ruling
request was forwarded to this office for direct response.
FACTS:
Charleston Container Shops, Inc. imports from Singapore and Switzerland various parts
for the repair and maintenance of refrigerated containers. These parts include, but are not limited
to, coils for refrigeration units, door assemblies, seals, and relays. The original containers, which
are purchased from a manufacturer in Singapore, are instruments of international traffic for which
a bond has been filed. They are then leased to various steamship lines, the leasing agent being
Charleston Container Shops, Inc.
ISSUES:
1. Whether parts used for the repair and maintenance of foreign-manufactured containers
which are instruments of international traffic are dutiable.
2. Whether a bond filed with Customs covering foreign-manufactured containers which
are instruments of international traffic also covers parts used for their repair and maintenance.
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LAW AND ANALYSIS:
Title 19, United States Code, 1322(a) (19 U.S.C. 1322(a)), provides that "[v]ehicles
and other instruments of international traffic, of any class specified by the Secretary of the
Treasury, shall be excepted from the application of the customs laws to such extent and subject to
such terms and conditions as may be prescribed in regulations or instructions of the Secretary of
the Treasury."
The Customs Regulations issued under the authority of 19 U.S.C. 1322(a) are contained
in 10.41a, Customs Regulations (19 CFR 10.41a). Section 10.41a(a)(2) provides as follows:
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of international traffic may be entered or withdrawn from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 deposit of duty if
the person making the entry or withdrawal from ware-
house 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 district director must be satisfied that the
importer of the repair component, accessory, or equip-
ment had the declared intention at the time of importation.
In regard to the dutiability of the repair and maintenance parts in question, they would not
be subject to duty so long as the containers in which they are installed are in fact instruments of
international traffic and the requisite declaration set forth in 10.41a(a)(2), Customs Regulations,
referenced above is met.
With respect to Customs bonding requirements for the subject containers and their repair
parts, such requirements are separate and distinct. Pursuant to 10.41a(c), Customs Regulations,
containers which are instruments of international traffic may be released only after the applicant
for such release has filed a bond on Customs Form 301 containing the bond conditions set forth in
113.66, Customs Regulations. This provision, however, is inapplicable to the repair parts for
such instruments of international traffic which must be covered by a bond containing the basic
importation and entry bond conditions set forth in 113.62, Customs Regulations.
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HOLDINGS:
1. Parts used for the repair and maintenance of foreign-manufactured containers which
are instruments of international traffic are not dutiable pursuant to 10.41a(a)(2), Customs
Regulations.
2. A bond filed with Customs covering foreign-manufactured containers which are
instruments of international traffic must contain the conditions set forth in 113.66, Customs
Regulations, whereas a bond covering the parts used for their repair and manufacture must
contain the conditions set forth in 113.62, Customs Regulations.
Sincerely,
Arthur P. Schifflin
Chief
Carrier Rulings Branch