Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; []; Plastic Reels, Hoods, and Packs.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H279173 November 17, 2016 BOR-07-OT:RR:BSTC:CCR H279173 ASZ CATEGORY: Carriers Linda Weinberg Barnes & Thornburg LLP 1717 Pennsylvania Avenue N.W. Suite 500 Washington, D.C. 20006-4623 RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; []; Plastic Reels, Hoods, and Packs. Dear Ms. Weinberg: This is in response to your August 25, 2016, ruling request on behalf of []. In your submission, you request a ruling concerning whether certain transport devices, identified by [] as plastic reels, hoods, and packs, 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). You also requested to know whether [] is required to obtain an additional bond, and if so, what amount is required. Our decision follows. FACTS The following facts are from your ruling request and the e-mail to this office dated October 19, 2016. The plastic reels, hoods, and packs are used to transport magnet wire that [] imports from [] and from []. In order to ship the magnet wire, it must be wound around the plastic reels and placed inside a cover, either a hood or a pack. Once imported, [] stores the wire and sells it to its customers, manufacturers of automobile motors. When the customers have used the magnet wire, [] collects the empty reels and covers and exports them back to [] or [] for reuse. The plastic reels are then rewound with new magnet wire and the process is repeated. You state that the plastic reels and covers are always imported together and, barring exceptional circumstances, are exported together. The plastic reels come in three styles, and the covers are customized to fit the reels in order to safely transport the magnet wire. You provided this office with the specifications of the subject plastic reels, hoods, and packs. A round trip of the plastic reels and covers can take up to six months and includes the shipment of the subject articles into the United States and the subsequent return of the subject articles back to []. The plastic reels and covers can be reused four to five times round trip and have an estimated life expectancy of 30 months. The subject articles will be imported into the United States on an almost weekly basis with approximately 30,000 plastic reels and covers in circulation. Below are images you provided of the subject plastic reels, hoods, and packs.


 Reel with magnet wire Hood Pack   ISSUE Whether the subject plastic reels, hoods, and packs are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). LAW AND ANALYSIS Per 19 C.F.R. § 141.4(a), “all merchandise imported into the United States is required to be entered, unless specifically excepted.” The four exceptions to the requirement of entry are listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic. 19 C.F.R. § 141.4(b)(3). Subheading 9803.00.50, Harmonized Tariff Schedule of the United States (“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 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). Upon reviewing your request and supporting information, we find that the plastic reels and their corresponding covers meet the requirements of an instrument of international traffic when assembled. In HQ 112836 (Oct. 7, 1993), CBP was of the opinion that that plastic reels with covers used to transport glass fiber met the requirements to establish “instrument of international traffic status.” Similarly, in HQ H113897 (Aug. 5, 2010), CBP held that plastic spools used to transport steel tire cord are IITs. The subject articles are substantial inasmuch as the plastic reels are made of either High Impact Polystyrene or Acrylonitrile Butadiene Styrene, the hoods are made of Acrylonitrile Butadiene Styrene, and the packs are made of Multi Density Fibre. The plastic reels and covers have a life expectancy of 30 months (i.e., two and a half years). The subject articles are suitable for and capable of reuse, insofar as the plastic reels and covers can be used four to five times round trip. 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 plastic reels and covers are used in significant numbers in international traffic inasmuch as approximately 30,000 reels and covers will be in circulation. Based on the foregoing, the plastic reels, hoods, and packs 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 subheading 9803.00.50 HTSUS. You also requested to know whether your client is required to obtain an additional bond, and if so, what dollar amount would be required. Per 19 C.F.R. § 10.41a(c), articles designated as instruments of international traffic under 19 C.F.R. § 10.41a(a), may be released only after the applicant has filed a bond on Customs Form 301. Pursuant to 19 C.F.R. § 113.66, the bond for instruments of international traffic must be a continuous bond and contain the bond conditions listed in that section. As bonds are set by the Revenue Division and not this office, we cannot address what dollar amount would be required. HOLDING The subject plastic reels, hoods, and packs 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