Instruments of International Traffic; Plastic ShippingTotes; 19 U.S.C.  1322

HQ 113694 October 24, 1996 BOR-4-07-RR:IT:EC 113694 GEV CATEGORY: Carriers 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. - 2 - 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 - 3 - 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