BOR-4-07 RR:IT:EC 116575 CK
Michael E. Murphy
Baker & McKenzie LLP
815 Connecticut Avenue, NW
Washington, DC 20006-4078
RE: Reusable pallets and containers; Instruments of International Traffic; Shock/climate measuring device; Accessories to instruments of international traffic; 19 CFR §10.41a; 19 U.S.C. §1322(a)
Dear Mr. Murphy:
This is in response to your ruling request dated November 9, 2005 on behalf of your client, ASML US, Inc. You request a ruling designating certain reusuable pallets and containers as instruments of international traffic and a shock/climate measuring device installed inside such containers as accessories thereto under 19 U.S.C. §1322(a) and 19 CFR §10.41a.
FACTS:
ASML US, Inc. (“ASML”) develops, manufactures, markets, and services advanced semiconductor manufacturing systems. Its products include photolithography (commonly referred to as “lithography”) systems. ASML is the market leader and largest manufacturer of lithography systems that map semiconductor circuitry on silicon wafers. ASML sells its products to integrated circuit manufacturers worldwide.
These lithography systems imported into the United States by ASML are generally valued at several million dollars and are sensitive to movement, vibration, temperature, humidity, etc. To ensure the products are not damaged during transport, the related manufacturer, ASML N.V., places the systems on specially-designed pallets. The pallets consist of a steel platform base set upon coil springs with brackets and other metal fasteners to hold the system in place. The pallet is then placed inside a container that was specifically designed to accommodate the pallets. Pictures of the pallets and containers were included with the ruling request. Each pallet and container is serially numbered and will be reused over several years. ASML uses hundreds of these pallets and containers.
ASML equips its intermodal containers with at least one shock/climate measuring device. The shock/climate measuring device records mechanical shocks, temperature, humidity, etc. over an extended period of time. Included with the ruling request is additional information on these shock/climate measuring devices. The shock/climate measuring devices will not be permanently installed components of the containers. They can be removed and used in other containers. ASML uses hundreds of these shock/climate measuring devices.
ISSUE:
Whether certain pallets and containers qualify as instruments of international traffic and shock/climate measuring devices installed inside such containers qualify as accessories thereto under 19 U.S.C. §1322(a) and 19 CFR §10.41a.
LAW AND ANALYSIS:
Title 19, United States Code, section 1322(a) (19 U.S.C. 1322(a)), provides in pertinent part that “[v]ehicles and other instruments of international traffic…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….” The CBP regulations issued under the authority of section 322(a) are contained in section 10.41a (19 CFR 10.41a). Section 10.41a(a)(1) specifically designates lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments of international traffic.
Section 10.41a(a)(1) also authorizes the Commissioner of CBP to designate other items as instruments of international traffic. Once designated as instruments of international traffic, these items may be released without entry or the payment of duty, subject to the provisions of section 10.41a.
To qualify as an “instrument of international traffic” (IIT) within the meaning of 19 U.S.C. section 1322(a) and the regulation promulgated pursuant thereto (19 CFR 10.41 et seq.), an article must be used as a container or holder. The article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. (See, subheading 9803.00.50, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), and former Headnote 6(b)(ii), Tariff Schedule of the United States (TSUS), as well as Headquarters Decisions 104766; 108084; 108658; 109665; and 109702).
The concept of reuse contemplated above is for commercial shipping or transportation purposes, and not incidental or fugitive uses. Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at 99. See Holly Stores, Inc. v. United States, 697 F.2d 1387 (Federal Circuit, 1982).
We note that CBP has previously ruled on the IIT status of articles of similar size, construction, and usage. In HQ 116047, dated December 1, 2003, CBP held that collapsible steel racks that hold automobile transmissions within ocean containers are IITs. In HQ 115503, dated May 30, 2000, we held that hard plastic boxes used to ship integrated circuit wafers qualified as IITs. In HQ 114506, dated October 29, 1998, it was determined that containers made of plastic known as totes that were used to ship various small automobile replacement parts from Japan to the United States met the requirements necessary for designation as IITs. In HQ 112534, dated January 25, 1993, it was held that reusable plastic boxes designed to transport automotive strut components qualified as IITs.
Furthermore, we have held that articles, which consist of pallets and tops, plastic outer rings, plastic and cardboard pads, and form trays used to transport ceramic logs qualify as IITs when these parts were assembled together. See, HQ 115108, dated August 24, 2000. In HQ 116240, dated July 23, 2004, CBP held that both circuit die steel film trays and plastic cases holding those trays qualify as IITs. Finally, most recently CBP held that stainless steel totes (IBCs), carbon steel IMO 1 skid tanks, and carbon steel cylinders used to ship chemicals all qualified as IITs. See, HQ 116534, dated December 5, 2005.
In this case, the specialized pallets and containers will be reused over several years. Both items are presented as substantial in nature and durable. You state the pallets and containers are serially numbered, and your client is using hundreds of them in international trade. Based on this information and the pictures submitted, we conclude that the specialized pallets and containers meet the requisite criteria to qualify as IITs pursuant to 19 U.S.C. § 1322(a).
As to the shock/climate measuring devices, you seek to have these declared accessories to IITs.
Paragraph (a)(2) of section 10.41a (19 CFR 10.41a(a)(2)) provides the following:
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 entry or withdrawal from warehouse files a declaration ...that the accessory or equipment is for a container of foreign production which is an instrument of international traffic. The port director must be satisfied that the importer of the repair component, accessory or equipment had the declared intention at the time of importation.
We find the information that you have provided demonstrates that the subject merchandise is designed for, and will be used with, intermodal containers and serve as accessories to them. Therefore, based on such information, we find that the shock/climate measuring devices are accessories of IITs of foreign production, and are eligible for duty-free treatment pursuant to the provisions of 19 U.S.C. § 1322, subheading 9803.00.50, HTSUSA, and 19 CFR § 10.41a. We note that entry of this merchandise is required under 19 CFR § 10.41a(a)(2). See also, HQ 114446, dated October 20, 1998 and HQ 116513, dated August 8, 2005.
HOLDING:
The specialized pallets and containers described above qualify as IITs and the shock/climate measuring devices installed inside such containers also described above qualify as accessories thereto within the meaning of 19 U.S.C. §1322(a) and 19 CFR § 10.41a.
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers & Immigration Branch