OT:RR:BSTC:CCR H348564 MF
Kent Sunakoda
Import Manager/Attorney in Fact
LOGISTEED America, Inc.
1000 Corporate Center Drive
Suite 400
Monterey Park, CA 91754
RE: Instruments of International Traffic; 19 U.S.C. § 1332(a); § 10.41a(a)(1), AESC Smyrna,
LLC; Racks and Reels.
Dear Mr. Sunakoda:
This is in response to your April 14, 2025, ruling request on behalf of AESC Smyrna,
LLC (“AESC”). In your request you inquire whether Transport Units (Reels and Racks) qualify
as “instruments of international traffic” (“IIT”) within the meaning of 19 U.S.C. § 1332(a). Our
decision follows.
FACTS:
The following facts are from your ruling request and supplements thereto. The subject
items are metal racks and plastic reels. The subject items are designed to transport electrode
sheets through international traffic and be returned to China empty for refitting with electrode
sheets and eventual reuse. The subject device is comprised of (1) a basic reel (spool) component,
and (2) a surrounding frame which holds the reel in place and provides a base for rotation. The
metal racks are foldable and adjustable, but the moveable legs cannot be dismounted from the
rack, whereas reels are of a one-piece construction.
Regarding the racks, AESC indicates that there is a single model number, 41T0G00028,
which is printed on their legs. However, AESC indicates there are multiple models of plastic
reels: smooth reels (models 5340065121 and 5340065118), reels with Acrylonitrile Butadiene
Styrene (“ABS”) ring (models 5340066074 and 5340066075), and reels with steps (models
5340064938 and 5340064939). The model numbers are not printed on the reels.
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With respect to the subject racks, the frames are constructed of components made of
Q235 Steel. Q235 is a carbon structural steel grade with characteristics of good overall strength
and toughness and excellent weldability. The reels are constructed of components made of ABS
which is a tough, durable and impact-resistant thermoplastic. The subject racks and reels are of
the following dimensions:
• Racks: 1130 mm x 731 mm x 1175 mm
• Reels: 650 mm diameter
The subject rack is depicted below:
The subject reel is depicted below both empty and with an electrode sheet wound upon it:
2
Approximately 27,000 subject racks and 27,000 of the subject reels are expected to enter
into use. Small batches of racks and reels have been imported since January 2025. The racks
and reels were imported holding the electrodes at time of entry. They were not classified or
entered as IITs. They were classified separately and entered duty-paid under 7326.90.8688 at
2.9% (metal racks) and 3926.90.9989 at 5.3% (plastic reels).
AESC-China manufactures, sells and ships electrodes to the importer AESC-
Smyrna. Electrode sheets are wound around the plastic reels, then wrapped/packaged and loaded
into the metal racks for international shipment to the buyer and consignee AESC-
Smyrna. AESC-Smyrna is a manufacturer of energy storage systems. The electrodes are used as
raw materials in the manufacture of energy storage systems at AESC-Smyrna’s U.S.
plants. Following the unloading of the electrode material at the plants, the empty metal racks
and plastic reels are recycled and shipped back to AESC-China for reuse.
The normal usage cycle of the metal rack and plastic reel from the AESC-China factory
to AESC-Smyrna’s plants and their return to the AESC-China factory is six months. The
anticipated lifetime usage of the metal racks is two times per year for five years. The anticipated
lifetime usage of the plastic reels is two times per year for four years.
ISSUE:
1. Whether the subject reels qualify for consideration as IIT within the meaning of 19
U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
2. Whether the subject racks qualify for consideration as IIT within the meaning of 19
U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1).
LAW AND ANALYSIS:
Per 19 C.F.R. § 141.4(a), “all merchandise imported into the United States is required to
be entered, unless specifically excepted.” The four exceptions to the requirement of entry are
listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic. See 19
C.F.R. § 141.4(b)(3).
Subheading 9803.00.0, 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 1
1
Customs revenue functions have been delegated to the Secretary of Homeland Security by the Secretary of
Treasury, with exceptions herein not applicable, under the authority of the Homeland Security Act of 2002, Pub. L.
107-296. See Treas. Dep't Order 100-16 (May 15, 2003).
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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.
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 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.
19 C.F.R. § 10.41a(a)(1) (emphasis added).
Such instruments may be released without entry or the payment of duty, subject to the provisions
of this section.
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). 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 used as a container or holder must be: (1) substantial, (2)
suitable for and capable of repeated use, and (3) used in significant numbers in international
traffic. See HQ H291037 (Jan. 9, 2018); HQ H016491 (Oct. 1, 2007); HQ 114150 (Dec. 12,
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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). 2
U.S. Customs and Border Protection (“CBP”) has previously determined that rigid plastic
spools used to ship large quantities of yarn (90 kilograms) met the requirements necessary for
designation as IITs. See HQ 113554 (Aug. 31, 1995). Additionally, plastic spools used for the
transportation of steel tire cord have been found to constitute as IITs. See HQ 253872 (Aug. 1,
2014). More recently, in HQ 347908 (June 25, 2025), CBP determined that transportation units
comprised of reel (spool) and a base analogous to the rack at issue here satisfied the requirements
for designation as IIT.
Additionally, based upon review of the submission and information provided, the subject
items are containers that are substantial, suitable for and capable of repeated use, and used in
significant numbers in international traffic. They are substantial in that the components of the
racks are made of steel 3 and the reels are constructed of tough, durable and impact-resistant
thermoplastic. 4 Also, the component parts of each have an average lifespan of four to five years.
They will be used in significant numbers in international commerce, given that approximately
27,000 of these racks and 27,000 of these reels are intended for use in international traffic.
Lastly, the subject racks and reels are suitable for and capable of reuse given that these units are
used approximately two times in a twelve-month period and are rated for eight overall use cycles
in the case of the reels and ten in the case of the racks.
Based on the foregoing, in general, the subject items are eligible for designation as IITs;
and would therefore qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. §
10.41a(a)(1). However, we note that previous subject devices underwent normal entry process
and the payment of applicable duties when originally imported. Upon eventual reimportation of
these devices, the subject reels and racks qualify for duty-free treatment under Subheading
9803.00.0, HTSUS, not as IITs, but as “of foreign production and previously imported and duty
paid” substantial holder under Subheading 9803.00.0, HTSUS.
2
The requirement that an article be “substantial” is not only a threshold requirement under 9803.00.50, but also a
requirement for an article to be an instrument of international traffic pursuant to CBP decisions. The origin for the
criterion found in CBP decisions that an article be “substantial” is found in Schedule 8, Item 808.00 of the Tariff
Schedule of the United States (1963)(TSUS), the predecessor provision to 9803.00.50, HTSUS. Likewise, the
criterion that an article be “suitable for and capable of repeated use” is found in Schedule 8, Item 808.00, TSUS,
Headnote 6(b)(ii)(stating that the article must be capable of “reuse”). Although the requirement that an article be
capable of reuse is no longer under subheading 9803.00.50, HTSUS (the successor provision to Item 808.00, TSUS),
to receive duty-free treatment thereunder nevertheless, “reuse” is still required, pursuant to CBP decisions, for an
article to be considered an instrument of international traffic.
3
See HQ 114733 (Nov. 17, 1999); H116376 (Jan. 11, 2005) (CBP determined steel bins and steel chains were
substantial); HQ 303170 (Apr. 9, 2019) (CBP held steel container racks were substantial); and H339996 (October
11, 2024) (CBP found that steel cargo support structures were substantial).
4
See HQ 294387 (May 10, 2018) (CBP states that reusable containers constructed of polypropylene and PVC plastic
were substantial); HQ 339291 (July 1, 2024) (CBP determined that plastic used for the construction of totes and
trays was substantial); HQ 323497 (Mar. 15, 2025) (CBP found that totes constructed of injection-molded
polyethylene plastic (“HDPE”) and polypropylene plastic (“PP”) were substantial).
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The subject racks and reels which have not yet formally entered the United States, as
discussed above, qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. §
10.41a(a)(1).
HOLDING:
The subject racks and reels that have not yet formally entered the United States qualify
for treatment as instruments of international trade within the meaning of 19 U.S.C. § 1322(a) and
§ 10.41a(a)(1). However, those reels which were previously imported, entered and for which
duties were paid should be entered under Subheading 9801.00.20, HTSUS as “Articles,
previously imported.”
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the
assumption that all of the information furnished in connection with the ruling request and
incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and
complete in every material respect. The application of a ruling letter by a {CBP} field office to
the transaction to which it is purported to relate is subject to the verification of the facts
incorporated in the ruling letter, a comparison of the transaction described therein to the actual
transaction, and the satisfaction of any conditions on which the ruling was based.” If the facts at
hand vary from the facts stipulated to herein, this decision shall not be binding on CBP as
provided for in 19 C.F.R. § 177.2(b)(1), (2), and (4), and § 177.9(b)(1) and (4).
Sincerely,
W. Richmond Beevers
Chief, Cargo Security, Carriers, and Restricted Merchandise
Office of International Trade, Regulations & Rulings
U.S. Customs and Border Protection
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