BOR-7-07-CO:R:IT:P 111196 BEW
Mr. Walter M. Cline
J. Cortina, Inc.
Post Office Box 603
Tampa, Florida 33601
RE: Designation of Plastic Reels as Instruments of International
Traffic
Dear Mr. Cline:
This is in reference to your letters of July 24, 1990, and
March 21, 1991, in which you asked that we designate certain
plastic reels as instruments of international traffic (IIT).
FACTS:
You state that you intend to use the plastic reels for the
transportation of monofilament fishing line. You state that
after receipt in the United States and repackaging of the
monofilament line, the empty reels are returned to Japan for
refilling and reshipping to the U.S. You state that the reels
have no use other than as a conveyance for the monofilament.
You state the reels are plastic, 5 1/2 inches in outer diameter,
8 inches in length, and have a core diameter of 2 1/2 inches.
You state that the reels for which IIT status is
requested will be used a minimum of 10 to 15 times before they
become unfit for further use. You state that the will be
imported primarily at ports in the Southern U.S. area, and that
the required bond will be submitted.
ISSUE:
Whether the described plastic reels used for the
transportation of monofilament fishing line may be treated as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and section 10.41a of the Customs Regulations (19
CFR 10.41a).
LAW AND ANALYSIS:
Section 322(a), Tariff Act of 1930, as amended (19 U.S.C.
1322(a)), provides that "[v]ehicles and other IIT, of any class
specified by the Secretary of the Treasury, shall be granted the
customary exceptions from the application of the customs laws to
the 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
section 322(a) are in section 10.41a (19 CFR 10.41a). Paragraph
(a)(l) of section 10.41a designates as IIT lift vans, cargo vans,
shipping tanks and certain other named articles and states that
other articles may be designated as IIT by the Commissioner of
Customs in decisions to be published in the weekly Customs
Bulletin. 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.
Section 10.41a(a)(1) also authorizes the Commissioner of
Customs to designate other items as instruments of international
traffic in decisions to be published in the weekly Customs
Bulletin. 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"
within the meaning of 19 U.S.C. 1322(a) and the regulation
promulgated pursuant thereto (19 CFR 10.41a 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
Schedules of the United States (HTSUS), 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).
In Holly Stores, supra, the court determined that "reuse" in
the context of former General Headnote 6(b)(ii) "has been
consistently interpreted to mean practical, commercial reuse, not
incidental reuse." (Emphasis added). In that case, articles of
clothing were shipped into this country on wire or plastic coat
hangers. Evidence showed that the hangers were designed to be,
and were of fairly durable construction and that it would be
physically possible to reuse them. However, the court found that
only about one percent of the hangers were reused in any way at
all, and that those uses were of a noncommercial nature. The
court held that the uses of these hangers beyond shipping them
once from overseas to the United States were purely incidental,
and concluded that the hangers were "not designed for, or
capable of, reuse". Subsequent Customs rulings on this matter
have held that single use is not sufficient; reuse means more
than twice (Headquarter rulings 105567 and 108658). Furthermore,
it is our position that the burden of proof to establish reuse is
on the applicant, even though the applicant may not be the party
reusing the instrument.
We find that the plastic reels under consideration are used
as containers or holders, that they are substantial, suitable for
and capable of repeated use, and that they will be used in
significant numbers in international traffic. We further find
that the reels under consideration are similar to the holders
designed to hold two or more pounds of yarn or thread, made of
wood, base metal, or a combination thereof, known as spools,
bobbins, cops and pins, used for the transportation of yarn and
thread which were designated as IIT's in Treasury Decision 56543.
The designation of a container or holder as an IIT becomes
effective only when used as such upon its arrival in this country
in foreign trade, either empty or with merchandise. If the
holder or container is brought into the country by a party other
than the one who is using it as an IIT, it is subject to entry as
imported merchandise. The principal on the IIT bond is the party
who is using the holder or container as an IIT.
HOLDING:
The plastic reels under consideration qualify for treatment
as instruments of international traffic and may be released under
the procedures set forth in section 10.41a, Customs Regulations.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch