BOR-4-07-RR:IT:EC 113694 GEV
Paul Shaw
Re-Source America Inc.
2267 Highway 70 West
Mebane, North Carolina 27302
RE: Instruments of International Traffic; Plastic Shipping
Totes; 19 U.S.C. 1322
Dear Mr. Shaw:
This is in response to your letter dated June 28, 1996, to
Roger J. Silvestri, Director, National Commodity Specialist
Division, U.S. Customs Service, New York, N.Y., requesting a
ruling that certain plastic shipping totes are instruments of
international traffic. Your letter was forwarded to this office
for direct response. Our ruling in this matter is set forth
below.
FACTS:
Re-Source America, Inc., proposes to import plastic shipping
totes from international customers of the Telecommunications
Products Division of Corning, Incorporated ("Corning"), located
at 310 North College Road in Wilmington, North Carolina. The
subject totes will be used by Corning to ship optical fiber both
domestically and overseas. The totes have been designed with the
intent of being returned to Corning via Re-Source America's
reuse/refurbishment process for the recurring shipment of optical
fiber to overseas locations. They consist of re-usable plastic
spools and covers and include two identical halves of 0.15" thick
polypropylene with sliding latches to hold the halves together
during shipment and storage. There will be approximately 25,000
- 30,000 of these totes in use with approximately 30% of them
overseas at any given time.
In support of your ruling request you have submitted the
following: a sample of one of the subject totes; a Re-Source
America brochure; domestic return instructions; photographs of
the totes; and information from Corning regarding its packaging
and recycling program.
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ISSUE:
Whether the plastic shipping totes under consideration, used
to ship optical fiber, may be designated as instruments of
international traffic within the meaning of 19 U.S.C. 1322(a)
and
10.41a, Customs Regulations (19 CFR 10.41a).
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
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
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 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
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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.
Upon reviewing this request and the accompanying
documentation, we are of the opinion that the above-discussed
requirements have been met. We further note that Customs has
previously ruled that certain spools and covers of a similar use
and construction as those under consideration qualify as
instruments of international traffic pursuant to 19 U.S.C.
1322(a) and 10.41a, Customs Regulations (see T.D.s 71-159 and
75-212). More importantly, in Headquarters Ruling 112836, dated
October 7, 1993, we held that plastic spools transported in
corrugated cardboard cartons for use by Corning in shipping glass
fiber overseas were instruments of international traffic. In
that case, as in the case currently under review, Re-Source
America was the entity controlling the international movement of
the merchandise on behalf of Corning. The only distinction
between these two cases is that in the present case plastic
covers are being used as the outer container whereas in the prior
case corrugated cardboard cartons were so used.
HOLDING:
The plastic shipping totes under consideration, used to ship
optical fiber, are designated as instruments of international
traffic within the meaning of 19 U.S.C. 1322(a) and 10.41a,
Customs Regulations (19 CFR 10.41a).
Sincerely,
Chief
Entry and Carrier Rulings Branch
cc: Chief, Glass and Metals Branch
New York Seaport