BOR-7-07-CO:R:IT:C 111655 MLR
R. W. Yager
Special Operations
Norman G. Jensen, Inc.
P.O. Box 1450
Blaine, WA 98230
RE: Instruments of International Traffic; Plastic Pails;
19 U.S.C. 1322
Dear Mr. Yager:
This is in reference to your letter dated April 15, 1991,
on behalf of Leo's Floral and Trucking, requesting a ruling that
certain plastic pails are instruments of international traffic.
Our ruling is set forth below.
FACTS:
United Flower Growers conducts flower auctions in Burnaby,
B.C., Canada, and maintains approximately 10,000 plastic pails.
Leo's Floral and Trucking, of Richmond, B.C., Canada, uses these
Canadian-made plastic pails to truck cut flowers about three
times a week from Canada to the United States. Most of the pails
are round and have a holding capacity of either 5 U.S. gallons, 2
U.S. gallons, or 6 liters; the square pails hold 4 U.S. gallons.
All pails are labeled with the United Flower Growers's symbol and
either with the words: "Return for Refund" or "Return for
Deposit." The flowers are delivered to various florists in the
United States in these pails which are suitable for many years of
repetitive use. When empty, the pails are collected on a
subsequent run, returned to the United Flower Growers in Canada,
and reused to transport flowers to the United States. The
United Flower Growers may require a cash deposit for the pails,
which is refunded when they are returned; if a cash deposit is
not required, the same number of pails as delivered is to be
returned.
ISSUE:
1. Whether reusable, plastic pails used to import cut
flowers from Canada may be designated as instruments of
international traffic within the meaning of 19 U.S.C. 1322(a) and
section 10.41a, Customs Regulations (19 CFR 10.41a).
LAW AND ANALYSIS:
Title 19, United States Code, section 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
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.ic.
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 pails under consideration are
capable of being used as a container or holder, that they are
substantial, suitable for and capable of repeated use, and that
they will be used in significant numbers in international
traffic. In addition, Customs has previously ruled that plastic
baskets of similar use and construction, as those under
consideration, qualify as instruments of international traffic
pursuant to 19 U.S.C. 1322(a) and section 10.41a, Customs
Regulations (see Treasury Decision 74-296, and Customs Ruling
105049).
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. In
addition, pursuant to section 177.9(c) of the Customs
Regulations, a ruling letter is subject to modification or
revocation without notice to any person, except the person to
whom the letter is addressed. Accordingly, no other person
should rely on this ruling or assume that the principles of this
ruling will be applied in connection with any transaction other
than the one described in this letter.
HOLDING:
Reusable, plastic pails used to import cut flowers from
Canada are designated as instruments of international traffic
within the meaning of 19 U.S.C. 1322(a) and section 10.41a,
Customs Regulations (19 CFR 10.41a).
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch