Instruments of International Traffic; Komatsu America Corp.; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1).

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H284336 March 24, 2017 BOR-4-07-OT:RR:BSTC:CCR H284336 SWM CATEGORY: Carriers Mr. Steven C. O’Malley Komatsu America Corp. 409 Signal Mountain Road Chattanooga, Tennessee 37405 RE: Instruments of International Traffic; Komatsu America Corp.; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1). Dear Mr. O’Malley: This is in response to your six separate ruling requests submitted on February 2, 2017, on behalf of Komatsu America Corp. In your request you inquire whether certain steel skids qualify as “Instruments of International Traffic” (“IIT”) within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Our ruling is set forth below. FACTS The following facts are from your ruling request and supplements thereto. Komatsu America Corp., (Komatsu) imports final drive, valve, and pump assemblies, as well as radiators, engines, and other miscellaneous machine parts for the production of hydraulic excavators at its Chattanooga Manufacturing Operation. These various assemblies and parts are packaged and transported on returnable steel skids. The skids are constructed in Japan of steel with welded joints along with bolt joints for easy breakdown and transport. The following types of steel returnable skids under consideration in the present matter: i) PC200 – 400 Valve, ii) PC200 – PC400, iii) PC210, iv) PC210LL, v) PC300, vi) PC400, vii) PC200 Pump, viii) PC300 Pump, ix) PC400 Pump, x) PC490AC-10(Tier 4) ENG, xi) PC300, and xii) PC400. The steel returnable skids are depicted in the photographs below, provided by Komatsu.

Valve Assembly Skids Radiator Skids

Pump Assembly Skids Engine Skids

Miscellaneous Parts Skids Swing Machinery Skids ISSUE Whether the steel skids described above qualify as “instruments of international traffic” (IITs) within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a? LAW AND ANALYSIS Komatsu asserts that the subject steel skids may be classified under subheading 9803.00.50, Harmonized Tariff Schedule of the United States (HTSUS) because they qualify as IITs. Subheading 9803.00.50, HTSUS provides for the 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. (footnote and emphasis added). Subchapter 98 of the HTSUS only applies to: (a) Substantial containers or holders which are subject to tariff treatment as imported articles and are: (i) Imported empty and not within the purview of a provision which specifically exempts them from duty; or (ii) Imported containing or holding articles, and which are not of a kind normally sold therewith or are entered separately therefrom; and (b) Certain repair components, accessories and equipment. See U.S. Note 1, et seq., Chapter 98, HTSUS. Pursuant to 19 U.S.C. § 1322(a), IITs shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. The relevant Customs and Border Protection (CBP) regulations implementing that statute are found at 19 C.F.R. § 10.41a(a)(1) which provides in pertinent part: Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics, arriving (whether loaded or empty) in use or to be used in the shipment of merchandise in international traffic are hereby designated as “instruments of international traffic” . . . Such instruments may be released without entry or the payment of duty, subject to the provisions of this section. 19 C.F.R. § 10.41a(a)(1)(emphasis added). Skids are specifically designated as IITs under 19 C.F.R. § 10.41a(a)(1). Therefore, they qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and 9803.00.50, HTSUS. HOLDING The subject steel skids, described in the FACTS section above, are IITs as designated in 19 C.F.R. § 10.41a(a)(1). Sincerely, Lisa L. Burley, Chief Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection