Instruments of International Traffic; 19 U.S.C. § 1332(a); §§ 10.41a(a)(1), 10a(a)(3); Tive Inc.

HQ H335140 May 17, 2024 OT:RR:BSTC:CCR H335140 JLE CATEGORY: Carriers Herbert J. Lynch Counsel Sullivan & Lynch, P.C. 800 Turnpike St. Suite 300 North Andover, MA 01845 RE: Instruments of International Traffic; 19 U.S.C. § 1332(a); §§ 10.41a(a)(1), 10a(a)(3); Tive Inc. Dear Mr. Lynch: This is in response to your October 9, 2023, ruling request on behalf of Tive, Inc. (‘Tive”). In your request you inquire whether a certain models of the Tive Solo Tracking Devices qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1332(a). Our ruling is set forth below. Facts The following facts are from your ruling request and supplements thereto. The subject devices are three models of Tive Solo Tracking Devices (“subject devices”): Tive Solo (TT-5000/TT-5020) (“Tive Solo”), Tive Solo 5G Non-Lithium (TT-7100) (“Tive Non-Lithium), and Tive Solo 5G (TT-7000) (“Tive Solo 5G”). Tive is a supplier of tracking devices which allow for visibility, location, condition, and monitoring of intermodal containers in transport worldwide. Once the subject devices are installed on a shipping container, the subject devices collect, analyze and report in real-time regarding the location and condition of the container from the point of origin to ultimate destination. The subject devices are manufactured in China, and are battery powered. The Tive Solo and subject Tive Solo 5G contain Lithium-Ion batteries. The Tive Non-Lithium contains a Nickel-based battery pack. The batteries for all three devices are rechargeable. The subject devices will operate on a full charge for up to 6 months and can be recharged over 300 times before the unit reaches the end of its useful life. The subject devices use cellular connectivity to report location and container content condition data. The integrated sensors allow for constant monitoring of temperature, light, humidity, and shock. The devices bear unique serial numbers to allow for inventory control. Tive reports that over 1 million units of the subject Tive devices have been sold since 2021. Issue Whether the subject devices qualify for consideration as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Whether the subject devices qualify for consideration as accessories to IITs within the meaning of 19 C.F.R. § 10.41a(a)(2). Law and Analysis Per 19 C.F.R. § 141.4(a), “all merchandise imported into the United States is required to be entered, unless specifically excepted.” The four exceptions to the requirement of entry are listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic (“IIT”). 19 C.F.R. § 141.4(b)(3). Subheading 9803.00.0, 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 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” [. . .] The Commissioner of Customs [now CBP] is authorized to designate as instruments of international traffic […] such additional articles or classes of articles as he shall find should be so designated. 19 C.F.R. § 10.41a(a)(1)(emphasis added). Such instruments may be released without entry or the payment of duty, subject to the provisions of this section. To qualify for entry-free and duty-free treatment as IITs under the aforementioned statutory and regulatory authority, the article must be a substantial container or holder. As stated above, CBP is authorized to designate as an IIT such additional articles not specifically noted in 19 C.F.R. § 10.41a(a)(1). To qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), an article used as a container or holder must be: (1) substantial, (2) suitable for and capable of repeated use, and (3) used in significant numbers in international traffic. See HQ H291037 (Jan. 9, 2018); HQ H016491 (Oct. 1, 2007); HQ 114150 (Dec. 12, 1997); HQ 107545 (May 7, 1985); Treas. Dec. 71-159, Cust. B. & Dec. 296 (June 18, 1971); 99 Treas. Dec. 533, No. 56247 (Aug. 26, 1964). As a threshold consideration, the subject devices are not containers or holders. The purpose of the devices are to provide monitoring information, not to contain merchandise. Therefore, the subject devices do not qualify for consideration as an IIT as contemplated by 19 C.F.R. § 10.41a(a)(1). The subject devices are, however, specifically designed for use with shipping containers; therefore, we will consider whether they may be classified as accessories to IITs under 19 C.F.R. §10.41a(a)(2) or (a)(3). Pursuant to 19 C.F.R. § 10.41a(a)(3), an IIT “includes the normal accessories and equipment imported with any such instrument which is a ‘container’ as defined in Article 1 of the Customs Convention on Containers.” See 19 C.F.R. § 10.41a(a)(3). Pursuant to 19 C.F.R. § 10.41a(a)(2), (2) Repair components, accessories, and equipment for any container of foreign production which is an instrument of international traffic may be entered or withdrawn from warehouse for consumption without the deposit of duty if the person making the entry or withdrawal from warehouse files a declaration that the repair component was imported to be used in the repair of a container of foreign production which is an instrument of international traffic, or that the accessory or equipment is for a container of foreign production which is an instrument of international traffic. The Center director must be satisfied that the importer of the repair component, accessory, or equipment had the declared intention at the time of importation. CBP has consistently held that shipping containers are “containers” and IITs. See, e.g., HQ H251366 (June 4, 2014) (finding that reefer shipping containers are IITs); HQ H044900 (Dec. 18, 2008) (holding that “it is well settled that intermodal cargo containers qualify as ‘instruments of international traffic.’”); HQ 113003 (Jan. 27, 1994)(holding that intermodal cargo containers qualify for treatment as IITs); HQ 116684 (Aug. 17, 2006) and HQ W116719 (Nov. 30, 2006) (holding that intermodal containers are IITs). Headquarters Ruling (“HQ”) 116684 (Aug. 17, 2006) found that accessories to IIT are “substantial, suitable for and capable of repeated use with intermodal containers which are IITs and will serve as accessories or equipment for such containers. CBP has previously reviewed devices similar to the subject device. For example, in HQ 116684, CBP reviewed the Tamper-Resistant Embedded Controller (“TREC”) which was a container-security, monitoring and tracking device that, once installed on a shipping container, collects, analyzes, and reports data regarding the status, condition and location of the container and its contents from point of origin to destination. HQ 116684 (Aug. 17, 2006). CBP found that these devices were substantial, suitable for and capable of repeated use with intermodal containers which are IITs. Id. The subject devices serve a similar function once installed onto a container and are capable of 300 recharges. Based upon review of the submission and information provided, the subject devices are substantial, suitable for and capable of repeated use with IITs. Based on the foregoing, the subject devices qualify for designation as accessories to IITs. Therefore, they qualify for entry-free and duty-free treatment pursuant to 19 C.F.R. § 10.41a(a)(3). Holding The subject devices do not qualify for duty-free treatment as IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). The subject devices qualify as accessories to an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(3). Sincerely yours, W. Richmond Beevers, Chief Cargo Security, Carriers, and Restricted Merchandise Branch