Instruments of International Traffic; Containers; Repair Components; Bond Requirements; 19 U.S.C.  1322, 1623; 19 CFR  10.41a, 113.62

HQ 113339 March 10, 1995 BOR-7-07-CO:R:IT:C 113339 GEV CATEGORY: Carriers Shannon Bastien Emery Customs Brokers 9700 Highway 78 Ladson, South Carolina 29456 RE: Instruments of International Traffic; Containers; Repair Components; Bond Requirements; 19 U.S.C.  1322, 1623; 19 CFR  10.41a, 113.62 Dear Ms. Bastien: This is in reference to your letter dated February 2, 1995, to the U.S. Customs Service in Charleston, South Carolina, requesting a ruling on behalf of a potential client. Your ruling request was forwarded to this office for direct response. FACTS: Charleston Container Shops, Inc. imports from Singapore and Switzerland various parts for the repair and maintenance of refrigerated containers. These parts include, but are not limited to, coils for refrigeration units, door assemblies, seals, and relays. The original containers, which are purchased from a manufacturer in Singapore, are instruments of international traffic for which a bond has been filed. They are then leased to various steamship lines, the leasing agent being Charleston Container Shops, Inc. ISSUES: 1. Whether parts used for the repair and maintenance of foreign-manufactured containers which are instruments of international traffic are dutiable. 2. Whether a bond filed with Customs covering foreign-manufactured containers which are instruments of international traffic also covers parts used for their repair and maintenance.  - 2 - LAW AND ANALYSIS: Title 19, United States Code,  1322(a) (19 U.S.C.  1322(a)), provides that "[v]ehicles and other instruments of international traffic, of any class specified by the Secretary of the Treasury, 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 or instructions of the Secretary of the Treasury." The Customs Regulations issued under the authority of 19 U.S.C.  1322(a) are contained in  10.41a, Customs Regulations (19 CFR  10.41a). Section 10.41a(a)(2) provides as follows: 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and equipment for any container of foreign production which is an instrument of international traffic may be entered or withdrawn from warehouse for consumption without deposit of duty if the person making the entry or withdrawal from ware- house files a declaration that the repair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 district director must be satisfied that the importer of the repair component, accessory, or equip- ment had the declared intention at the time of importation. In regard to the dutiability of the repair and maintenance parts in question, they would not be subject to duty so long as the containers in which they are installed are in fact instruments of international traffic and the requisite declaration set forth in  10.41a(a)(2), Customs Regulations, referenced above is met. With respect to Customs bonding requirements for the subject containers and their repair parts, such requirements are separate and distinct. Pursuant to  10.41a(c), Customs Regulations, containers which are instruments of international traffic may be released only after the applicant for such release has filed a bond on Customs Form 301 containing the bond conditions set forth in  113.66, Customs Regulations. This provision, however, is inapplicable to the repair parts for such instruments of international traffic which must be covered by a bond containing the basic importation and entry bond conditions set forth in  113.62, Customs Regulations.  - 3 - HOLDINGS: 1. Parts used for the repair and maintenance of foreign-manufactured containers which are instruments of international traffic are not dutiable pursuant to  10.41a(a)(2), Customs Regulations. 2. A bond filed with Customs covering foreign-manufactured containers which are instruments of international traffic must contain the conditions set forth in  113.66, Customs Regulations, whereas a bond covering the parts used for their repair and manufacture must contain the conditions set forth in  113.62, Customs Regulations. Sincerely, Arthur P. Schifflin Chief Carrier Rulings Branch