Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; Marubeni America Corporation; plastic pallets and cardboard “triwall” boxes.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H254878 September 8, 2014 OT:RR:BSTC:CCR H254878 DAC CATEGORY: Carriers Mr. Wing Cheung Marubeni America Corporation 375 Lexington Ave. New York, NY 10017-5644 RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; Marubeni America Corporation; plastic pallets and cardboard “triwall” boxes. Dear Mr. Cheung: This is in response to your June 6, 2014, ruling request for Marubeni America Corporation (“MAC”). In your letter, you request a ruling concerning whether certain plastic pallets and cardboard “triwall” boxes qualify as instruments of international traffic (IIT) 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 in your ruling request. You claim that the cardboard “triwall” boxes and plastic pallets are to be used regularly together to transport aluminum substrate disks. The subject plastic pallets are made of reinforced plastic. The subject triwall boxes are made of three-ply hard cardboard. The triwall boxes may be attached to the plastic pallets by a clasp. The triwall boxes may be separated from the plastic pallets by unhooking the clasp from the plastic pallet. The triwall boxes are regularly unhooked during inspection of the condition of the packaging prior to re-using the triwall boxes and plastic pallets for shipping. The subject triwall boxes and plastic pallets are used to transport aluminum substrate disks between Japan, Malaysia, and the United States. The approximate quantity of such triwall box and plastic pallet sets to be shipped from Japan to the U.S. is eighty (80) per year and from Malaysia to the U.S. is one hundred twenty (120) per year. Although you claim that the triwall boxes are intended to be used repeatedly, you have not provided an estimated life span in response to our follow up request in regards to your submission. You claim that after the United States customer receives the aluminum substrate disks, MAC intends to transport the triwall boxes and plastic pallets back to Japan or Malaysia for re-use. You state the triwall boxes are made in Malaysia and that the plastic pallets are made in Japan. You further state that the triwall boxes and plastic pallets will not be used point to point within the U.S. and will not enter the commerce of the United States. Below are images you provided in your submission of the subject plastic pallets and cardboard triwall boxes.
 Image of Triwall box on top of plastic pallet
 Image of plastic pallet ISSUE Whether the subject plastic pallets and cardboard triwall boxes 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 Customs and Border Protection (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. 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. Pursuant to 19 C.F.R. § 10.41a(a)(1), pallets are per se IITs. In HQ H119060 (Nov. 9, 2010), CBP held that “pallets have already been designated as an instrument of international traffic by regulation. See 19 C.F.R. § 10.41a(a).” Again, recently in HQ H252710 (May 19, 2014), CBP held that “the subject plastic pallets are IITs.” See HQ 252710 (May 19, 2014). Based upon review of the submission and information provided, the subject plastic pallets are containers that are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. They have a useful life that permits repeated use cycles and hundreds such plastic pallets are to be used in international traffic. Based on the foregoing, the subject plastic pallets are designated as 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. To qualify as an instrument of international traffic within the meaning of 19 U.S.C. § 1322(a) and the regulation promulgated pursuant thereto (19 C.F.R. § 10.41a 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, Subheading 9803.00.50, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), and CBP Ruling HQ 109665 (Sept. 12, 1988). In HQ 114872, (Dec. 15, 1999), CBP has previously examined cardboard boxes in regards to whether they may qualify as instruments of international traffic. CBP held that “they are not substantial nor suitable for repeated use. In comparison to most containers designated as IIT’s, which are made of a sturdy construction such as metal, plastics or wood, the subject boxes are made of cardboard which is not substantial and can easily be damaged with only one use so that a box cannot be reused. Consequently, we find that the subject cardboard boxes do not qualify as IIT’s pursuant to 19 U.S.C. § 1322(a).” See HQ 114872 (Dec. 15, 1999). Similarly, in this instance with regards to the cardboard “triwall” boxes, we determine that the cardboard “triwall” boxes are not substantial nor suitable for repeated use and may also be easily damaged with only one use. Therefore, we find that the subject cardboard “triwall” boxes do not qualify as IIT’s pursuant to 19 U.S.C. § 1322(a).” HOLDING The subject plastic pallets are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). The subject cardboard triwall boxes are not 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