Instruments of International Traffic; Steel Spools; Steel Skids; Subheading 9803.00.50, HTSUSA; 19 U.S.C. § 1322; 19 CFR § 10.41a

HQ 116649 July 24, 2006 BOR-4-07-RR:BSTC:CCI 116649 IDL CATEGORY: Carriers Kay J. Peterson Import Manager D.J. Powers Co., Inc. 35 Barnard Street Savannah, Georgia 31412-9239 Re: Instruments of International Traffic; Steel Spools; Steel Skids; Subheading 9803.00.50, HTSUSA; 19 U.S.C. § 1322; 19 CFR § 10.41a Dear Ms. Peterson: This is in response to your letter, dated April 24, 2006, requesting a binding ruling on designation of steel spools and steel skids as Instruments of International Traffic. Our ruling on this matter is set forth below. FACTS: YKK USA, Inc. (“YKK”) exports globally brass wire packed in steel spools and transported on steel skids. Upon arrival at the foreign destination, the brass wire is removed and the empty spools and skids are returned to YKK, and the cycle repeats itself. The spools are manufactured in Japan, and the skids are manufactured in the U.S. YKK has approximately 7000 steel spools and 2100 steel skids in circulation. Each skid can hold up to three spools. The approximate value of each spool and skid is $290 and $70, respectively. The spools and skids have an estimated serviceable life of ten years. You have provided images of the spools and skids with your letter. ISSUE: Whether the steel spools and steel skids described above may be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a, U.S. Customs and Border Protection (CBP) regulations (19 CFR 10.41a), and therefore, are classifiable under subheading 9803.00.50, HTSUSA? 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….” The CBP regulations issued under the authority of section 1322(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. [emphasis added]. Skids are specifically designated as instruments of international traffic (IIT) under section 10.41a(a)(1). Therefore, the steel skids in question are classifiable under subheading 9803.00.50, HTSUSA, and may be released without entry or the payment of duty. Section 10.41a(a)(1) also authorizes the Commissioner of CBP to designate other items as IITs. Once designated as IITs, these items may be released without entry or the payment of duty, subject to the provisions of section 10.41a. To qualify as an IIT within the meaning of 19 U.S.C. section 1322(a) and the regulation promulgated pursuant thereto (19 CFR 10.41 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 Schedule of the United States (TSUS), 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 previous rulings, we have held that metal spools used for the transportation of steel tire cord qualify as IITs. HQ 106817 (June 11, 1984); see also, T.D. 56247 (August 27, 1964). Similarly, we have held that spools, bobbins, cops, and pins made of wood, base metal, or plastic or a combination thereof, and designed to hold yarn or thread, qualify as IITs. HQ 113554 (August 31, 1995); HQ 111196 (April 8, 1991); T.D. 56543 (December 9, 1965). In the instant case, we find that, based on the information provided, the steel spools are used to hold the brass wire during transportation from the United States; they are substantial, suitable for and capable of repeated use; and they are used in significant numbers in international traffic. Accordingly, the spools meet the requisite criteria to qualify as IITs pursuant to section 1322(a). HOLDING: The steel skids and steel spools are designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a, and therefore, are classifiable under subheading 9803.00.50, HTSUSA. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch