Instruments of International Traffic; 19 U.S.C. § 1322; 19 CFR § 10.41a;Plastic Shipping Trays

HQ H060897 June 29, 2009 BOR-4-07-RR-BSTC:CCI H060897 GOB CATEGORY: Carriers John Zincani Director, Customs Compliance Kuehne + Nagel Strategic Trade Group 10 Exchange Place Jersey City, NJ 07302-3936 RE: Instruments of International Traffic; 19 U.S.C. § 1322; 19 CFR § 10.41a; Plastic Shipping Trays Dear Mr. Zincani: This is in response to your ruling request of April 20, 2009 on behalf of Schick Manufacturing, Inc. (“Schick”), which was forwarded to this office by the National Commodity Specialist Division of the Office of International Trade of U.S. Customs and Border Protection (“CBP”). Your submission included a sample of the plastic shipping trays at issue. Our ruling is set forth below. FACTS: You request a ruling that certain plastic shipping trays be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. You state as follows. The plastic shipping trays (the “trays”) are constructed of rigid plastic and will be used by Schick in the international transportation of certain razor blades. The trays are manufactured in China from Polylac PA, which is an acrylonitrile butadiene styrene plastic material. They measure approximately 15 inches by 10 inches by three-quarters of an inch. They are constructed of two primary layers of plastic within which the razor blades, either in blank or completed form, are stored while in shipment. This storage will prevent damage to the blades and to any person handling the blades. The trays include a spring-hinged mechanism that permits the hands-free insertion and removal of the blades by sliding them into and out of the tray. When they are closed, the hinged side panels limit the movement of the blades within the tray so that storage during shipment is secure. The top and bottom panels of the trays are attached by a hexagonal bolted fastener. If the top and bottom components are opened, the tray and its contents will be discarded. You state that the trays have undergone a significant level of engineering in order for them to function as described. They are only capable of holding very thin razor blades and will only load and unload as part of an automated process wherein the trays are moved to a machine that automatically lifts the side cover panel, removes or loads the contents, and sends the trays to a repository where they are returned to the sender to continue the cycle of loading or unloading. You further state that the trays have been engineered and designed to be used numerous times. Schick conservatively estimates that the trays will be used between five and ten round trips. It also conservatively estimates that each tray will be used at least five round trips per year. Schick has purchased 200,000 trays, which are valued at $3.92 each. ISSUE: Whether the subject items may be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. 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 or instructions …” The Customs and Border Protection (“CBP”) Regulations issued under the authority of 19 U.S.C. § 1322(a) are contained in 19 CFR § 10.41 et seq. Section 10.41a(a)(1), CBP Regulations (19 CFR § 10.41a(a)(1)) designates lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments for international traffic. Section 10.41a(a)(1), CBP Regulations (19 CFR § 10.41a(a)(1)) also authorizes the Commissioner of CBP to designate as instruments of international traffic such additional articles or classes of articles as he shall find should be so designated. Instruments so designated may be released without entry or the payment of duty, subject to the provisions of 19 CFR § 10.41a. To qualify as an instrument of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a, an article must be used as a container or holder. Further, the article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See, e.g., Headquarters rulings (“HQ”) 108084, 108658, 109665, and 109702. In Holly Stores, Inc. v. U.S., 697 F.2d 1387, 1388 (Fed. Cir. 1982), aff’g 534 F. Supp. 818 (Ct. Int’l Trade 1981), the court stated with respect to former General Headnote 6(b): “Reuse” in this context has been consistently interpreted to mean practical, commercial reuse, not incidental reuse. Fontana Hollywood Corp. v. United States, 64 Cust. Ct. 204, C.D. 3981 (1970), relying on Tariff Classification Study, Seventh Supplemental Report (Aug 14, 1963) at 99. Within the context of 19 CFR § 10.41a and instruments of international traffic, we have held that “repeated use” means “more than twice.” See, e.g., HQ 108658, dated November 21, 1986. Our examination of the tray submitted as a sample indicates that it is of very durable construction. We therefore conclude that the trays are physically capable of, and suitable for, reuse or repetitive use. The trays are of a type such that they will be used numerous times. The trays will be used in significant numbers in international traffic. There are 200,000 trays and Schick estimates that the trays will be used on at least five round trips per year. The reuse which Schick describes and proposes is a “commercial reuse,” i.e., the trays will continue to be used in the commercial transportation of razors. In HQ 116663, dated August 9, 2006, CBP designated certain plastic trays, totes, and magazines used to ship razors, parts of razors, and toothbrushes as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1). In HQ H037859, dated November 4, 2008, CBP designated certain plastic trays designed for the transportation of carbon blocks as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1). In HQ 116526, dated August 29, 2005, CBP (then the Customs Service) designated certain plastic circuit trays as instruments of international traffic. In HQ 115108, dated August 24, 2000, CBP designated certain pallets and tops, plastic outer rings, plastic and cardboard pads, and form trays as instruments of international traffic. In HQ 114506, dated October 29, 1998, CBP designated certain totes which consisted of a series of plastic trays as instruments of international traffic. In Treasury Decision 68-56, CBP designated certain plastic trays with dimensions of 23” by 14” by 1.75” as instruments of international traffic. After a review of the information and the sample tray submitted, we determine that the subject trays are used as holders, are substantial, suitable for and capable of repeated use, and are used in significant numbers in international traffic. Thus, they meet the criteria for designation as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1) and are so designated. Because the subject trays are designated as instruments of international traffic, they are not subject to entry or the payment of duty pursuant to the aforementioned statutory and regulatory authority. We note, however, that if the subject trays are diverted from international traffic, they will cease to be considered instruments of international traffic and will therefore not receive the treatment accorded to such articles. HOLDING: The subject trays are hereby designated as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 CFR § 10.41a(a)(1) and are therefore not subject to entry or the payment of duty. Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch