Instruments of International Traffic; Spools; Skids; Pallets; 19 U.S.C. § 1322(a); 19 CFR § 10.41a

HQ H011656 August 21, 2007 BOR-4-07-OT:RR:BSTC:CCI H011656 GG CATEGORY: Carriers Ms. Kay J. Peterson Import Manager D.J. Powers Co., Inc. 35 Barnard Street Savannah, Georgia 31412-9239 RE: Instruments of International Traffic; Spools; Skids; Pallets; 19 U.S.C. § 1322(a); 19 CFR § 10.41a Dear Ms. Peterson: This is in response to your letter of May 14, 2007, in which you inquire about the designation of certain spools, skids and pallets as Instruments of International Traffic. Our ruling is set forth below. FACTS YKK USA, Inc. uses certain spools, skids and pallets to import wire, cord and monofilament. Once the product arrives, the empty spools, skids and pallets are returned to the country of export. You have provided images of the subject spools, skids and pallets, along with the following information: Approximately 38,000 steel spools manufactured in Japan, are used for importing brass, aluminum, and nickel wire from Japan, have an expected life of approximately 10 years, and are returned to Japan empty; Approximately 12,000 steel skids manufactured in Japan, are used for importing brass, aluminum, and nickel wire from Japan, have an expected life of approximately 10 years, and are returned to Japan empty; Approximately 5,000 steel skids manufactured in Japan, are used for importing stainless steel wire from Japan, have an expected life of approximately 10 years, and are returned to Japan empty; Approximately 500 steel spools and 125 pallets manufactured in Japan, are used together for importing iron cord from Japan, have an expected life of approximately 10 years, and are returned to Japan empty; Approximately 8,500 steel spools manufactured in Indonesia, are used for importing polyester monofilament from Indonesia, have an expected life of approximately 10 years, and are returned to Indonesia empty; Approximately 70,000 “Toray” spools (body made of steel manufactured in Korea; sleeve and cap made of ABS plastic manufactured in Indonesia), are used for importing polyester monofilament from Indonesia, have an expected life of approximately 5 years, and are returned to Indonesia empty. ISSUE Whether the spools, skids and pallets as 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(a)(1). 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 § 1322(a) are contained in section 10.41 et seq. (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 (“IITs”). Skids and pallets are specifically designated as instruments of international traffic (IIT) under section 10.41a(a)(1). Therefore, the steel skids and steel pallets in question may be released without entry or 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. § 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 (“HQ”) 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). CBP rulings on this matter have held that single use is not sufficient; reuse means more than twice (Headquarter rulings 105567 and 108658). Upon reviewing your request in the instant case, we are of the opinion that based on the information provided, the requisite criteria for designation of the subject spools as instruments of international traffic have been met. The spools are used to hold wire (brass, aluminum, nickel), iron cord, and polyester monofilament during transportation from Japan and Indonesia to the United States; they are substantial, suitable for and capable of repeat use; and they are used in significant numbers in international traffic. Accordingly, the spools meet the requisite criteria to qualify as IITs pursuant to 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. This finding comports with previous determinations made by CBP, where CBP has ruled that certain articles of similar nature, use and construction as those presently under consideration qualify as instruments of international traffic pursuant to 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. See, e.g., HQ H116649 (July 24, 2006) steel skids and steel spools used to hold brass wire during transportation designated as IITs; see also, HQ 113554 (August 31, 1995) rigid plastic spools, pads and pallets used for shipping synthetic yarn designated as IITs (citing T.D. 56543 (December 9, 1965)). HOLDING The subject spools, skids and pallets described above, are designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch