BOR-4-07-RR-BSTC:CCI H071856 GOB
Hector J. Casas
Casas International Brokerage, Inc.
9355 Airway Road, Suite 4
San Diego, CA 92154
RE: Instruments of International Traffic; 19 U.S.C. § 1322; 19 CFR § 10.41a;
Wooden Pallets; Steel Baskets; Plastic Bins
Dear Mr. Casas:
This is in response to your ruling request of July 31, 2009 on behalf of Cooper Lighting LLC (“requester”), which was forwarded to this office by the National Commodity Specialist Division of the Office of International Trade of U.S. Customs and Border Protection (“CBP”). Our ruling is set forth below.
FACTS:
You request a ruling that certain wooden pallets, steel baskets, and plastic bins be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. The requester uses the pallets, baskets, and bins to transport raw materials to its parent division in Mexicali, Mexico.
The pallets are made of wood and have the following dimensions: 48 inches by 48 inches; 48 inches by 40 inches; 48 inches by 96 inches; and 48 inches by 120 inches. The pallets have an estimated useful life of approximately six months. Approximately 7,500 pallets will each be used approximately 20 times during this six month useful life.
The baskets are made of steel and have dimensions of 40 inches by 48 inches by 36.5 inches. Approximately 800 of these baskets will each be used in approximately 50 shipments per year. The baskets have an estimated useful life of between three and five years.
The bins are made of polyurethane resin and have dimensions of 14.75 inches by 21.5 inches by 13 inches. Approximately 2,000 of the bins will each be used in approximately 50 shipments per year. The bins have an estimated useful life of between three and five years.
ISSUE:
The issue presented is whether the subject wooden pallets, steel baskets, and plastic bins may be designated as 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 in pertinent part, that “[v]ehicles and other instruments of international traffic … 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 …”
The Customs and Border Protection (“CBP”) Regulations issued under the authority of 19 U.S.C. § 1322(a) are contained in 19 CFR § 10.41 et seq. Section 10.41a(a)(1), CBP Regulations (19 CFR § 10.41a(a)(1)) designates lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments for international traffic.
Section 10.41a(a)(1), CBP Regulations (19 CFR § 10.41a(a)(1)) also authorizes the Commissioner of CBP to designate as instruments of international traffic such additional articles or classes of articles as he shall find should be so designated. Instruments so designated may be released without entry or the payment of duty, subject to the provisions of 19 CFR § 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. Further, the article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See, e.g., Headquarters rulings (“HQ”) 108084, 108658, 109665, and 109702. We note that, as indicated above, pallets are designated as instruments of internal traffic in 19 CFR § 10.41a(a)(1).
In Holly Stores, Inc. v. U.S., 697 F.2d 1387, 1388 (Fed. Cir. 1982), aff’g 534 F. Supp. 818 (Ct. Int’l Trade 1981), the court stated with respect to former General Headnote 6(b):
“Reuse” in this context has been consistently interpreted to
mean practical, commercial reuse, not incidental reuse.
Fontana Hollywood Corp. v. United States, 64 Cust. Ct. 204,
C.D. 3981 (1970), relying on Tariff Classification Study,
Seventh Supplemental Report (Aug 14, 1963) at 99.
Within the context of 19 CFR § 10.41a and instruments of international traffic, we have held that “repeated use” means “more than twice.” See, e.g., HQ 108658, dated November 21, 1986.
The information submitted with respect to the wooden pallets, steel baskets, and plastic bins indicates that they are of very durable construction. We therefore conclude that the subject pallets, baskets, and bins are physically capable of, and suitable for, reuse or repetitive use. The subject pallets, baskets, and bins are of a type such that they will be used numerous times. They will be used in significant numbers in international traffic.
The reuse which you describe and proposes is a “commercial reuse,” i.e., the subject pallets, baskets, and bins will continue to be used in the commercial transportation of merchandise.
In HQ 226812, dated March 20, 1997, CBP (then, the Customs Service) designated certain wooden pallets as instruments of international traffic. In HQ 112705, dated May 21, 1993, CBP designated certain pallets made of wood, particleboard, and cardboard as instruments of international traffic. In HQ 115959, dated July 7, 2003, CBP designated certain collapsible steel packing crates as instruments of international traffic. In T.D. 56243, CBP designated large boxes, bins, and racks, made of metal or wood, as instruments of international traffic. In T.D. 70-236, CBP designated certain open-top metal containers as instruments of international traffic. In T.D. 74-296, CBP designated certain plastic baskets and wooden boxes as instruments of international traffic. In T.D. 75-265, CBP designated certain plastic containers as instruments of international traffic. In HQ 112534, dated January 25, 1993, CBP designated certain folding plastic boxes as instruments of international traffic; in this ruling, CBP stated that “Treasury Decisions 68-56, 74-281, 75-265, and Headquarters Decision 109702 all stand for the proposition that plastic trays of similar dimensions which are used to transport goods are substantial as well as suitable for and capable of repeated use.”
After a review of the information submitted, we determine that the subject wooden pallets, plastic bins, and steel baskets are used as holders, are substantial, are suitable for and capable of repeated use, and are used in significant numbers in international traffic. Thus, 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(a)(1) and are so designated. Because the subject pallets, bins, and baskets are designated as instruments of international traffic, they are not subject to entry or the payment of duty pursuant to the aforementioned statutory and regulatory authority. We note, however, that if the subject items are diverted from
international traffic, they will cease to be considered instruments of international traffic and will therefore not receive the treatment accorded to such articles.
HOLDING:
The subject wooden pallets, plastic bins, and steel baskets are hereby designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1).
Sincerely,
Glen E. Vereb
Chief
Cargo Security, Carriers and Immigration Branch