Instruments of international traffic; 19 U.S.C. 1322; 19 CFR 10.41a

HQ 114843 November 18, 1999 BOR-4-07-RR-IT-EC 114843 GOB CATEGORY: Carriers Terry Moran Director of Import/Export Affairs and Immigration U.S. Sea Launch Company 2700 Nimitz Road Long Beach, CA 90802 RE: Instruments of international traffic; 19 U.S.C. 1322; 19 CFR 10.41a Dear Mr. Moran: This is in response to your letter of September 15, 1999 on behalf of U.S. Sea Launch LLC. FACTS: You request that certain transportation containers be designated as instruments of international traffic within the meaning of 19 CFR 10.41a. You describe the pertinent facts as follows: The transportation container is manufactured in Russia and is dedicated to the transport of our 3rd rocket stage supplied by RSC Energia. RSC Energia, the supplier of the above items, is a partner in the Sea Launch consortium. Sea Launch provides commercial space launch capabilities from an ocean going platform. U.S. Sea Launch LLC will be the importer of record and plans to off load the transportation container at our private terminal in Long Beach, California... The transportation container in question is a substantial holder specially designed for the 3rd rocket stage. It is made of steel and its net weight is 8,240 kilograms. It carries the 3rd rocket stage, which weighs over 3 metric tons and is approximately 13 feet in length, providing support and protection to the rocket stage during ocean transportation. The transportation container has environmental controls to ensure stable temperature and humidity during transportation and various hardware to fix the rocket stage within the transportation container... [The hardware includes three brackets, one plate, six bolts, and one safety device.] The transportation container with the 3rd rocket stage will be offloaded in Long Beach, the rocket stage removed and the empty container and its accessories returned back to Russia for reuse. U.S. Sea Launch currently has plans for five launches per year and anticipates this program to last 10 years. Each transportation container will also be imported with one or two cartons of spares and accessories (i.e. zip kit) for the container. These parts will be used to repair any damage that occurs to the transportation container. The inventory will include various accessories and equipment for the container such as resistors, wrenches, bolts and cable. All of the parts are dedicated as accessories or equipment of a container of foreign production and any unused parts will be returned to Russia with the transportation container. We will submit a declaration to the District Director at time of import to note this fact. You further advised that there are three containers that will be used on a recurrent basis in the transportation, e.g., at a given time, one container would be in the United States, one would be in Russia, and one would be in transit. ISSUE: Whether the subject items 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: 19 U.S.C. 1322(a) provides in pertinent part: 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 19 U.S.C. 1322 are contained in 19 CFR 10.41a. 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. 19 CFR 10.41a(a)(1) also authorizes the Commissioner of Customs 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. Instruments so designated are also stated to be duty-free in subheading 9803.00.50, Harmonized Tariff Schedule of the United States. 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 Headquarters decisions 108084, 108658, 109665, and 109702. After a review of the information submitted, we determine that we are unable to designate the subject containers as instruments of international traffic because they will not be used in significant numbers in international traffic. The use of three containers (on a recurrent basis) does not constitute a use in significant numbers in international traffic. This determination is consistent with Ruling 113041 dated June 1, 1994, wherein we held that the following articles could not be designated as instruments of international traffic because they were not used in significant numbers in international traffic: 22 piston/ram pans; six carts; five steel modules; 16 motor tables or stands; and 16 wooden crates or skids with wrappers. We call to your attention subheading 9803.00.50, Harmonized Tariff Schedule of the United States, which provides for 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 [Emphasis supplied.] It would appear that the containers, their accessories, and equipment would be eligible for duty-free entry under subheading 9803.00.50 after they have been “previously imported and duty (if any) thereon paid.” HOLDING: We do not designate the subject containers as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR 10.41a because they will not be used in significant numbers in international traffic. Sincerely, Jerry Laderberg Chief, Entry Procedures and Carriers Branch