VES-3-17 OT: RR: BSTC: CCR H240539 RES
Katharine Kormienko
FTZ Administrator
Sumitomo Machinery of America
4200 Holland Drive
Chesapeake, VA 23323
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 CFR § 10.41a; Substantial Containers or Holders; Harmonized Tariff Schedule of the United States Annotated (HTSUSA) subheading 9803.00.50; Collapsible Wire Containers.
Dear Ms. Kormienko:
This is in reference to your request submitted on February 1, 2013, for a ruling on behalf of your client, Sumitomo Machinery of America (“Sumitomo”), in which you inquire whether collapsible wire containers qualify as “instruments of international traffic” (IITs) within the meaning of 19 U.S.C. § 1322(a) and 19 CFR 10.41a and may be released without entry or the payment of duty. The ruling request also inquires whether the collapsible wire containers are classifiable under subheading 9803.00.50, Harmonized Tariff Schedule of the United States (HTSUS), as substantial containers or holders.
FACTS:
The following facts are from your February 1, 2013, submission, and follow up emails, which include pictures of the subject articles. The articles are described as collapsible wire containers, made of carbon steel that are used to hold merchandise inside shipping containers. They come in three different sizes and weigh empty between 35 to 55 kilograms. The cargo carrying capacity of the wire containers is either 500, 1000, or 1500 kilograms and the volume is either .24, .42, or .78 cubic meters. When the wire containers are expanded out the merchandise is placed inside them. Depending on the size of the racks and weight of the merchandise, the wire containers, when loaded with merchandise can be stacked two to three wire containers high inside a shipping container. You state that the wire containers are owned by your client and will only be used for the transportation or transfer of Sumitomo’s products in international traffic and will not be held in the United States but rather the empty wire containers are collapsed, consolidated from the facilities, and bundled for export back to Japan to be reused for subsequent importations. The pictures you provided demonstrate how merchandise is placed in the wire containers (Figure 1) and how the collapsed wire containers are bundle for exportation (Figure 2). You state that Sumitomo has over 15,000 of these wire containers in continual repeated use in the importation of its merchandise and that they have a lifespan of at least a couple of years of use.
Figure 1 Figure 2
ISSUES:
Whether the collapsible wire containers described above may be designated as instruments of international traffic pursuant to 19 U.S.C. § 1322(a) and 19 CFR 10.41a.
Whether the collapsible wire containers described above are classifiable under subheading 9803.00.50, HTSUSA, as accessories for shipping containers or holders.
LAW AND ANALYSIS:
Before we address whether the collapsible wire containers are classifiable under subheading 9803.00.50, we must determine if they may be designated as instruments of international traffic. Pursuant to 19 U.S.C. § 1322(a), instruments of international traffic (also referred to herein as “IITs”) are excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. Pursuant to 19 CFR 10.41a(a)(1), the Commissioner of Customs and Border Protection (CBP) is authorized to designate as IITs such additional articles not specifically noted in that section. Once designated as such, the instruments may be release without entry or payment of duty.
To qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 CFR 10.41a(a)(1), an article must be used as a container or holder or as a normal accessory of such a container or holder. The article also must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See Headquarters Ruling (HQ) 104766 and HQ 108084. The concept of reuse contemplated above is for commercial shipping or transportation purposes, and not incidental or fugitive uses. See United States Trade Commission, Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at 99; Holly Stores, Inc. v. United States, 697 F.2d 1387 (Fed. Cir. 1982). CBP has consistently held that single use is not sufficient; reuse means more than twice. See HQ 105567 and HQ 108658.
In addition, if an article is determined to be an instrument of international traffic, then it is classifiable under subheading 9803.00.50, HTSUSA, which provides:
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.
The collapsible wire containers at issue here serve as holders or containers of merchandise, which are placed inside the expanded wire containers when shipped. In previous determinations, CBP has ruled that certain articles of similar nature and function as the collapsible wire containers under consideration here qualify as accessories of instruments of international traffic within the meaning of 19 CFR § 10.41a(a)(2). In HQ 113687, dated February 27, 197, CBP ruled that collapsible metal containers that were used in the importation of auto parts in which the merchandise was placed inside containers during shipping and which were (the containers) reused repeatedly for subsequent importations qualified as instruments of international trade. See also, HQ 115959, dated July 7, 2003 (collapsible metal crates); and HQ 116375, dated January 25, 2005 (collapsible steel and plastic crates).
Furthermore, the wire containers are substantial, as they are made of carbon steel; are suitable and capable for repeated use as the importer has indicated that they are exported and reused for subsequent importations of merchandise and have a lifespan of at least two years; and the wire containers are used in significant numbers in international trade.
Therefore, the collapsible wire containers are instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a(a). Accordingly, because we have determined that the articles at issue here qualify as instruments of international traffic, they are also classifiable under subheading 9803.00.50, HTSUSA.
HOLDING:
The subject collapsible wire containers described above are designated instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a and they may be released without entry or the payment of duty under subheading 9803.00.50, HTSUSA.
Sincerely,
George Frederick McCray
Supervisory Attorney-Advisor/Chief
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations & Rulings