Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; GKN Driveline North America, Inc.; blue bins, ORBIS containers, driveshaft trays.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H250334 May 19, 2014 OT:RR:BSTC:CCR H247720 KLQ CATEGORY: Carriers Ms. Angela Tabick GKN Freight Services Inc. One Copley Parkway, Suite 410 Morrisville, NC 27560 RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; GKN Driveline North America, Inc.; blue bins, ORBIS containers, driveshaft trays. Dear Ms. Tabick: This is in response to your September 12, 2013, ruling request which was referred to this branch by the National Commodity Specialist Division of Customs and Border Protection (“CBP”) for our direct response to you. In your letter, you request a ruling concerning whether three types of dunnage (blue bins, ORBIS Heavy-Duty Bulkpak containers, and driveshaft trays qualify as instruments of international traffic (IIT) pursuant to 19 C.F.R. § 10.41a and are therefore, classifiable under subheading 9803.00.50 of the Harmonized Tariff Schedule of the United States (HTSUS). Our decision follows. FACTS The following facts are from your ruling request and your e-mails to this office dated April 21, 2014, April 23-24, 2014, and April 29, 2014. The blue bins, ORBIS Heavy-Duty Bulkpak containers, and driveshaft trays are all used to transport automotive vehicle parts. GKN Driveline North America, Inc. intends to use the blue bins, ORBIS Heavy-Duty Bulkpak containers, and driveshaft trays to ship automotive vehicle parts from Mexico to various locations in the United States (“U.S.”). The blue bins, ORBIS Heavy-Duty Bulkpak containers, and trays will return to Mexico from the U.S. for re-use in future shipments. Blue Bins The blue bins are made of corrugated steel and are used to ship automotive constant velocity joint (“CVJ”) forgings and automotive driveshaft interconnecting (“IC”) shafts. The blue bins currently in use are at least 15 years old and are in good condition. GKN Driveline North America, Inc. estimates that it will use a total of approximately 70 blue bins per week in three different weekly shipments from Mexico to the United States. The blue bins will return to Mexico full of forgings. This shipment cycle will continue until approximately 2019. GKN Driveline North America, Inc. indicates that these bins will not enter domestic commerce.

ORBIS Heavy-Duty Bulkpak Containers The ORBIS Heavy-Duty Bulkpak containers are made of either high density polyethylene or polypropylene plastic. GKN Driveline North America, Inc. estimates that it will use approximately 2,500 of these containers. Each container will complete the international shipment from Mexico to the United States and back to Mexico every 22 days. The shipping cycle and the lifespan of the containers is three years. Therefore, each container will be exported 36 times. The ORBIS Heavy-Duty Bulkpak containers will either return to Mexico empty or will contain products. GKN Driveline North America, Inc. indicates that these containers will not enter domestic commerce. The subject ORBIS Heavy-Duty Bulkpak containers are identifiable by a white ID plate, marked “GKN Driveline NAFTA.”

Driveshaft Trays The driveshaft trays are thermoformed and made of high density polyethylene. GKN Driveline North America, Inc. estimates that it will ship per week: Hyundai Left Hand: 455 trays and 130 bottoms and tops Hyundai Right Hand: 455 trays and 130 bottoms and tops Nissan L42L Left and right Hand: 1158 trays and 386 bottoms and tops Nissan L42C Left hand: 180 trays and 30 bottoms and tops Nissan L42C Right hand: 180 trays and 30 bottoms and tops Nissan B12G left hands right hand: 144 trays and 48 bottoms and tops These driveshaft trays have a lifespan of five years. GKN Driveline North America, Inc. states that the Hyundai program will last until mid-2015 and the Nissan project will span a period of five to seven years. GKN Driveline North America, Inc. indicates that these driveshaft trays will not enter domestic commerce. GKN Driveline North America, Inc. segregates its domestic trays from export trays by color. Export trays are purple, red, white, green and grey. Domestic trays are yellow, blue, light green, and orange.





ISSUES Whether the subject blue bins are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Whether the subject ORBIS Heavy-Duty Bulkpak containers are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Whether the subject driveshaft trays are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). LAW AND ANALYSIS 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). Historically, CBP has held in its published decisions that in order 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 must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See 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). Subheading 9803.00.50, 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. Issue 1-Blue Bins as IITs under 19 C.F.R. § 10.41a(a)(1) The blue bins are substantial inasmuch as they are made of corrugated steel, are approximately 15 years old, and in good condition. The subject blue bins are suitable for and capable of reuse, insofar as GKN Driveline North America, Inc. will ship bins from Mexico to the U.S. each week until 2019. 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 HQ 105567 and HQ 108658. The blue bins are used in significant numbers in international traffic inasmuch as 70 bins will be used on a weekly basis in international shipments. CBP has addressed the issue of steel containers used in the international shipment of automotive parts. In HQ H115959 (July 7, 2003), CBP held that collapsible steel crates used in the international shipment of automobile parts qualified for IIT status. In that case, approximately 480 crates made 12-20 trips over a five year period. The facts of the present case are comparable in that GKN Driveline North America, Inc. will ship 70 solid steel bins a week from Mexico to the U.S. for approximately the next five years. Both cases involve large numbers of steel containers used in international shipments over a period of five years.  Based on the foregoing, the blue bin containers are IITs; therefore, they will qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and HTSUS subheading 9803.00.50. Issue 2-ORBIS Heavy-Duty Bulkpak Containers as IITs under 19 C.F.R. § 10.41a(a)(1) The ORBIS Heavy-Duty Bulkpak containers are substantial inasmuch as they are made of either high density polyethylene or polypropylene plastic. The subject containers are suitable for and capable of reuse, insofar as each container will make 36 international, round trip shipments during the next three years. 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 HQ 105567 and HQ 108658. GKN Driveline North America, Inc. indicates that it will use 2,500 containers. Thus, the ORBIS Heavy-Duty Bulkpak containers are used in significant numbers in international traffic. CBP has addressed the issue of plastic containers used in the international shipment of automobile parts. In HQ H024922 (Apr. 30, 2008), CBP held that certain plastic automotive crates were instruments of international traffic because “the subject plastic crates are made of sufficiently durable plastic that allows them to be used repeatedly to transport merchandise in international traffic. They have a useful life of approximately seven years and since thousands of such crates are currently in international commerce, they will be used in significant numbers in international traffic.” The present case is analogous to HQ H024922 because the containers are made of durable plastic, have a lifespan of multiple years, and are used in the thousands in international traffic.  Based on the foregoing, the ORBIS Heavy-Duty Bulkpak containers are IITs; therefore, they will qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and HTSUS subheading 9803.00.50. Issue 3-Driveshaft Trays as IITs under 19 C.F.R. § 10.41a(a)(1) The driveshaft trays are substantial inasmuch as they are made of high density polyethylene. The subject driveshaft trays are suitable for and capable of reuse, insofar as GKN Driveline North America, Inc. estimates that it will ship trays on a weekly basis over a period of years. Specifically, GKN Driveline North America, Inc. indicates that the Hyundai program will last until mid-2015 and the Nissan project will span a period of five to seven years. 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 HQ 105567 and HQ 108658. The driveshaft trays are used in significant numbers in international traffic inasmuch as 144 to 1,158 of these types of trays will be used in international shipments. CBP has addressed the issue of thermoformed trays as IITs. In HQ H227120 (Aug. 9, 1996), CBP held that thermoformed trays made of high density polyethylene qualified as IITs. In that case, there were hundreds to thousands of plastic trays in use in one of the approximately 200 shipments per year. The facts of the present case are analogous to HQ H227120 because the subject trays are made of durable plastic, have a lifespan of multiple years, and are used in the thousands in international traffic. Based on the foregoing, the driveshaft trays are IITs; therefore, they will qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1) and HTSUS subheading 9803.00.50. HOLDING The subject blue bins are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). The subject ORBIS Heavy-Duty Bulkpak containers are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). The subject driveshaft trays are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Sincerely, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection