Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 CFR § 10.41a; Steel Spools

HQ H111358 August 5, 2010 BOR-4-07:OT:RR:BSTC:CCI H111358 ALS CATEGORY: Carriers Ms. Marilyn Viruet Corporate Customs Compliance Coordinator/ Corporate Purchasing Administrator Bekaert Corporation 1395 S. Marietta Parkway Marietta, Georgia 30067 RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 CFR § 10.41a; Steel Spools Dear Ms. Viruet: This is in response to your correspondence, dated June 10, 2010, in which you requested a ruling on whether certain steel spools qualify as instruments of international traffic under 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. Our ruling is set forth below. FACTS: Bekaert Corporation exports wire products, specifically steel tire cord, to foreign countries packed on steel spools, which are designated as models BS200 and BS900. When the wire product arrives in a foreign country, it is removed from the spool and the empty spool is shipped back to the United States to be used again in the same manner. Bekaert also imports new empty spools. There are approximately 30,000 such spools in circulation combined, and they have an expected serviceable life of approximately of five to 10 years. ISSUE: Whether the steel spools as described above may be designated as instruments of international traffic (IIT) within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a(a)(1).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…" The CBP Regulations issued under the authority of § 1322(a) are contained in section 10.41 et seq. (19 CFR § 10.41a).To qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and the regulations promulgated pursuant thereto (19 CFR § 10.41 et seq.), an article must be used as a container or holder. The article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See Harmonized Tariff Schedule of the United States Annotated ("HTSUSA") subheading 9803.00.50; Tariff Schedule of the United States ("TSUS") Headnote 6(b)(ii). See also CBP Rulings HQ 104766 and HQ 108084. The concept of reuse contemplated above is for commercial shipping or transportation purposes, and not incidental or fugitive uses. See Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at 99; Holly Stores, Inc. v. United States, 697 F.2d 1387 (Fed. Cir. 1982). CBP has consistently held that single use is not sufficient; reuse means more than twice. See, e.g., CBP Rulings HQ 105567 and HQ 108658.Upon reviewing your request in the present case, we are of the opinion that, based on the information provided, the requisite criteria for designation of the subject steel spools as instruments of international traffic have been met. The spools are used to hold steel wire during transportation from the United States to various foreign countries on numerous occasions, which demonstrates that they are capable of repeat use. They are also used in significant numbers in international traffic. Accordingly, the spools meet the requisite criteria to qualify as IITs pursuant to 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. This finding comports with previous determinations made by CBP, where CBP has ruled that certain articles of similar nature, use and construction as those presently under consideration qualify as instruments of international traffic pursuant to 19 U.S.C. § 1322(a) and 19 CFR § 10.41a. See, e.g., CBP Ruling HQ H116649 (July 24, 2006) (steel skids and steel spools used to hold brass wire during transportation designated as IITs). HOLDING: The subject steel spools described above are designated as instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 CFR § 10.41a.Sincerely, George F. McCray Chief Cargo Security, Carriers and Immigration Branch