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

HQ H002927 November 22, 2006 BOR-4-07-RR:BSTC:CCI H002927 IDL CATEGORY: Carriers Brian Kavanaugh Trade Advisor Deringer Logistics Consulting Group 1 Lincoln Boulevard Suite 225 Rouses Point, NY 12979 Re: Instruments of International Traffic; Steel Racks; Plywood Dividers; Subheading 9803.00.50, HTSUSA; 19 U.S.C. § 1322; 19 CFR § 10.41a Dear Mr. Kavanaugh: This is in response to your submission on behalf of your client, Garaga, Inc., dated October 11, 2006, to the Director, National Commodity Specialist Division (NCSD), U.S. Customs and Border Protection (CBP). The NCSD has forwarded to this office for our review your request for a binding ruling on designation of steel racks and plywood dividers, used in the transportation of garage doors, as instruments of international traffic. Our ruling on this matter is set forth below. FACTS: Garaga, Inc. (“Garaga”), of Canada, manufactures a variety of garage doors and accessories that are secured with steel racks and plywood dividers for transportation to the United States. The steel racks and plywood dividers are then returned empty to Garaga, and the cycle repeats. You stated that the steel racks and plywood dividers are used to protect the doors from damage during transportation. Garaga circulates a total of 106 steel racks and approximately 363 plywood dividers. The serviceable life of the racking system is approximately ten to twenty years. You attached images of the steel racks and plywood dividers with your letter. ISSUE: Whether the steel racks and plywood dividers 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, 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 10.41 et seq. (19 CFR 10.41 et seq.). 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 (IITs). 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. 1322(a) and the regulations 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 designated as IITs metal racks used for transporting flat glass. HQ 112371 (December 9, 1992). We also designated as IITs collapsible metal containers or racks used for transporting auto parts. HQ 113687 (February 27, 1997). See also Treasury Decision 77-283, which held that cut-out plywood dividers used to transport vehicle brake drums are instruments of international traffic. In the instant case, we find that, based on the information provided, the steel racks and plywood dividers are used to hold the garage doors during transportation to 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 steel racks and plywood dividers meet the requisite criteria to qualify as IITs pursuant to section 1322(a). HOLDING: The steel racks and plywood dividers 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