BOR-4-07-RR:IT:EC 114008 GG
Mr. Chester R. Krayton
Customs Trade Consultants
P.O. Box 626
Manalapan, New Jersey 07726
RE: Instruments of International Traffic; Molded Polyurethane
Trays for Transportation of Brake Drums; Reusable Wooden Tops;
Wooden Pallets; 19 U.S.C. 1322(a); 19 CFR 10.41a
Dear Mr. Krayton:
This is in response to your ruling request, dated June 19,
1997, made on behalf of your client, Dana Corporation ("Dana").
We regret the delay in responding.
FACTS:
Dana imports brake drums from a Canadian supplier. The
brake drums are packed into a molded polyurethane tray. Each
tray holds 18 brake drums. The dimensions of the trays are 45.5"
wide, 54" long, and 2" high. The trays are stocked on wooden
pallets. Each pallet usually holds 10 trays. A reusable wood
top approximately the same size as a tray is placed on the
highest tray stacked on reusable wooden pallets. All three
packing materials are bound together with a steel band.
The cost of the three articles and their approximate life
expectancy are as follows:
Article Cost Life Expectancy
Wood Pallet $15 each 1-2 years
Wood Top $10 each 1-2 years
Polyurethane Tray $15 each 5-7 years
The articles are shipped back to the Canadian supplier for reuse
in packaging the brake drums for export to the United States.
ISSUE:
Whether molded polyurethane trays, wooden tops, and wooden
pallets designed to package brake drums are instruments of
international traffic within the meaning of 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 that "vehicles 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
1322(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 19 CFR 10.41a, 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), as well as Headquarters Ruling Letters (HRL)
113279, dated November 23, 1994; 112327, dated April 2, 1993; and
112503, dated December 2, 1992.
There is ample precedent to support a finding that the
plastic trays are instruments of international traffic. Treasury
Decisions 68-56, 74-281 and 75-265, and HRL's 112393, dated
August 14, 1992, and 112534, dated January 25, 1993, each held
that molded plastic trays designed to transport specific items,
in those cases automotive parts, bread, and berries, met the
criteria to qualify as instruments of international traffic. HRL
112393 is especially applicable because the item in question was
a reusable pallet set made to carry automotive struts. The
pallet set consisted of multiple molded plastic trays, which fit
onto a base pallet and were protected by a cap on top. These
are very similar to the items selected by Dana to transport the
brake drums: molded polyurethane trays, wooden pallets, and a
wooden top. The existence of supporting precedents, and the fact
that the life expectancies of these items indicate repeated use,
satisfies us that they meet the criteria for designation as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and 19 CFR 10.41a.
HOLDING:
The molded polyurethane trays, wooden pallets, and wooden
tops used to transport brake drums are instruments of
international traffic within the meaning of 19 U.S.C. 1322(a)
and 19 CFR 10.41a.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch