Instruments of international traffic; 19 U.S.C. 1322; 19 CFR 10.41a; Spools; Spiders

HQ H084256 November 19, 2009 BOR-4-07-RR-BSTC:CCI H084256 GOB CATEGORY: Carriers Sidney Van de Steene Corporate Purchasing Manager, North America Bekaert Corporation 1395 S. Marietta Parkway Building 500-100 Marietta, GA 30067 RE: Instruments of international traffic; 19 U.S.C. 1322; 19 CFR 10.41a; Spools; Spiders Dear Mr. Van de Steene: This is in response to your letter of October 30, 2009, in which you request a ruling that certain spools and spiders be designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. Our ruling is set forth below. FACTS: Bekaert Corporation (the “requester”) imports and exports steel wire and steel tire cord on steel spools and steel spiders or carriers. At issue are three items, all of which are 100% steel. The spider has a height of 50 inches and a base plate diameter of 33 inches. There are two types of spools. Spool BS 80/33 has a length of 12.95 inches and each flange or rim has a diameter of ten inches. Spool H360/70 has a length of 15.75 inches and each flange has a diameter of 12.5 inches. The spider and spool H360/70 transport steel wire; spool BS 80/33 transports steel tire cord. There are approximately 20,000 spools and 10,000 spiders in circulation. The spools and spiders have an estimated useful life of five to ten years. They are in continuous use and are used in approximately ten trips per year. 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. The court in Holly Stores rejected the concept of reuse with respect to the hangers at issue there based upon the lower court’s finding that only about one percent of the hangers were reused in any manner at all, and that those uses were noncommercial. The court did accept the facts that the hangers were of fairly durable construction and that it would be physically possible to reuse them.  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. The spools and spiders are of very durable construction. We therefore conclude that they are physically capable of, and suitable for, reuse or repetitive use. The spools and spiders are of a type such that they will be used numerous times in very significant numbers in international traffic. The reuse which the requester describes and proposes is a “commercial reuse,” i.e., the spools and spiders will continue to be used in the commercial transportation of steel wire and steel tire cord. CBP has previously determined that spools (and other similar items) are instruments of international traffic. See, e.g., HQ 116649, dated July 24, 2006; HQ 106817, dated June 11, 1984; HQ 113554, dated August 31, 1995; Treasury Decision (“T.D.”) 56247, dated August 27, 1964; and T.D. 56543, dated December 9, 1965. After a review of the information submitted, we determine that the subject spools and spiders are used as holders, are substantial, are 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 items 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 spools and spiders 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 spools and spiders 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). Sincerely, Glen E. Vereb Chief Cargo Security, Carriers and Immigration Branch