OT:RR:BSTC:CCR H257343 WRB
Edward F. Juliano, Jr.
Attorney-at-Law
303 Wyman Street
Suite 300
Waltham, MA 02451
RE: International Traffic; Entegris-ATMI; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a.
Dear Mr. Juliano:
This is in response to your September 10, 2014, ruling request on behalf of your client, Entegris, Inc. and its wholly owned subsidiary, Advanced Technology Materials, Inc. (Entegris-ATMI). In your request you inquire whether certain re-useable steel canisters and cylinders qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. Our ruling is set forth below.
FACTS
The following facts are from your ruling requests and supplements thereto. Entegris-ATMI is a company headquartered in Billerica, Massachusetts, and ATMI is its wholly-owned subsidiary. Entegris’ ATMI subsidiary manufactures the canisters and cylinders, which are used to supply high purity chemicals to semiconductor and flat panel display manufacturers. Liquid chemicals are processed and placed in steel canisters at the ATMI facility in Burnet, Texas. Gas chemicals are processed and placed in steel cylinders at the ATMI facility in Danbury, Connecticut. The liquid canisters and gas cylinders are manufactured in the United States. A small percentage of the gas cylinders are manufactured in the U.S. with outer steel shells made in Canada. All canisters and cylinders are serialized and number in the thousands.
The canisters and cylinders are exported to locations in Europe and Asia containing liquid and gas chemicals to semiconductor and flat panel display manufacturers, who return the canisters and cylinders to ATMI in Burnet and Danbury, respectively. The steel canisters and cylinders have a useful life in excess of five years, and are refilled numerous times. Unless damaged, cylinders and canisters are then refurbished for reuse. Principal ports of entry for the canisters and cylinders are Savannah, Los Angeles, and Dallas.
Liquid Chemical Canisters
Entegris-ATMI has eight varieties of the CMBK-056000 steel canister for liquid chemicals of differing capacities. The capacities are: 1,500 cc; 1.3 literl; 1.8 liter; 2.0 gallon; 3.0 gallon; 5.0 gallon; 10.0 gallon; and, 200 liter. The canisters employ a series of valves and other devices in order to insure safe use and to protect chemicals from contamination. These canisters are periodically refurbished in the U.S. with new valves and tubes, provided that the canister itself has not been damaged. Other canisters of varying capacities are similar to this model.
Gas Cylinders
Entegris-ATMI manufactures steel cylinders for use in shipping gases, ranging in capacity from 0.4 liters to 49 liters. The three models of cylinders that are most commonly shipped are the SDS-2 with a capacity of 0.49 L, 2.2 L, or 6.6 L, the SDS-3 with a capacity of 2.2 L or 6.6 L and the VAC with a capacity of 0.49 L, 2.2 L, or 6.6 L. All of these cylinders are made using steel alloy cylinders and have safety features designed to supply hazardous gases at sub-atmospheric pressure to semiconductor manufacturing equipment. The SDS 2 and SDS 3 cylinders contain a proprietary system of carbon beads or “pucks” that store and deliver hazardous gases at sub-atmospheric pressure.
ISSUE
Whether the canisters and cylinders described above qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a?
LAW AND ANALYSIS
Entegris-ATMI asserts that the subject cylinders may be classified under subheading 9803.00.50, Harmonized Tariff Schedule of the United States (HTSUS) because they qualify as IITs.
Pursuant to 19 U.S.C. § 1322(a), IITs shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. The relevant Customs and Border Protection (CBP) regulations implementing that statute are found at 19 C.F.R.§ 10.41a(a)(1) which provides in pertinent part:
Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics, arriving (whether loaded or empty) in use or to be used in the shipment of merchandise in international traffic are hereby designated as “instruments of international traffic” . . . The Commissioner of Customs [now CBP] is authorized to designate as instruments of international traffic, . . ., such additional articles or classes of articles as he shall find should be so designated. Such instruments may be released without entry or the payment of duty, subject to the provisions of this section.
19 C.F.R. § 10.41a(a)(1)(emphasis added).
To qualify for entry-free and duty-free treatment as IITs under the aforementioned statutory and regulatory authority, the article must be a substantial container or holder. As stated above, CBP is authorized to designate as an IIT such additional articles not specifically noted in 19 C.F.R. § 10.41a(a)(1). Historically, CBP has held in its published decisions that in order to qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), an article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See HQ H016491 (Oct. 1, 2007); HQ 114150 (Dec. 12, 1997); HQ 107545 (May 7, 1985); Treas. Dec. 71-159, Cust. B. & Dec. 296 (June 18, 1971); 99 Treas. Dec. 533, No. 56247 (Aug. 26, 1964).
Subheading 9803.00.50, HTSUS provides for the duty-free treatment of:
Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing merchandise), or if of foreign production and previously imported and duty (if any) thereon paid, or if of a class specified by the Secretary of the Treasury as instruments of international traffic, repair components for containers of foreign production which are instruments of international traffic, and accessories and equipment for such containers, whether the accessories and equipment are imported with a container to be reexported separately or with another container, or imported separately to be reexported with a container.
(footnote and emphasis added). Subchapter 98 of the HTSUS only applies to:
(a) Substantial containers or holders which are subject to tariff treatment as imported articles and are:
(i) Imported empty and not within the purview of a provision which specifically exempts them from duty; or
(ii) Imported containing or holding articles, and which are not of a kind normally sold therewith or are entered separately therefrom; and (b) Certain repair components, accessories and equipment.
See U.S. Note 1, et seq., Chapter 98, HTSUS.
As concerns the canisters and cylinders described in the FACTS section above, they are substantial inasmuch as they are made of steel. Further, they are suitable and capable of repeated use insofar as the current inventory of such cylinders numbers in the thousands and they have a useful life in excess of five years. Based on the foregoing, the canisters and cylinders described in the FACTS section above are IITs; therefore, they will qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and 9803.00.50, HTSUS.
HOLDING
The subject canisters and cylinders, described in the FACTS section above, are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
Sincerely,
Lisa L. Burley, Chief
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations and Rulings
U.S. Customs and Border Protection