Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; World Courier; Plastic Shipping Containers.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H311569 June 24, 2020 BOR-07-OT:RR:BSTC:CCR H311569 TNA CATEGORY: Carriers Mr. Daniel Jimenez Global Customs and Logistics LLC 10224 Crossroads Loop Laredo, TX 78045 RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; World Courier; Plastic Shipping Containers. Dear Mr. Jimenez: This is in response to your May 19, 2020, ruling request on behalf of Grupo ABC de Mexico, S.A. de C.V. You requested a ruling concerning whether certain plastic shipping containers qualify as instruments of international traffic (IITs) 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 May 19, 2020, ruling request and your email of June 23, 2020. The subject merchandise consists of rectangular plastic containers that are used to ship automotive parts and accessories between the United States and Mexico. These containers measure 56.5 inches by 48 inches by 34 inches. Grupo ABC de Mexico manufactures motor vehicle parts and accessories. The subject plastic containers are used to ship these parts between Mexico and the United States. Grupo ABC de Mexico owns 2,260 of the subject plastic containers, but not all are in use at any one time. Instead, three truckloads, with 66 of the subject containers fitting in a 53-foot trailer, are used per day. These containers are used for 380 shipments per year, and because these are round-trip shipments, the containers will be reused 380 times a year. The lifespan of these containers is three years. The subject plastic containers are manufactured in the United States. The automotive parts that Grupo ABC de Mexico manufactures are made in Mexico. These parts are sent from their plants in Mexico to a sequencing logistic provider close to their customer assembly plant in Texas for just in sequence delivery. They are shipped in the subject plastic containers, which protect the parts during transportation. Once the parts and container arrive to the sequencing logistics provider, the parts are taken from the plastic containers and the empty containers are sent back to Mexico. They are then reused to protect the next shipment of parts. The following images were submitted with the ruling request:


ISSUE Whether the subject plastic shipping containers 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: (a) 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), “[t]he Commissioner of Customs [currently 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.” See 19 C.F.R. § 10.41a(a). 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). In addition, CBP has previously ruled on whether plastic containers that are used to ship automotive parts internationally are IITs. In HQ H294387 (May 10, 2018), for example, CBP classified reusable containers that were made of polypropylene or polyvinyl chloride. These containers were used to ship finished and non-finished steel and plastic fasteners that were used in the American automotive industry; CBP classified them as IITs. Furthermore, in HQ H250334 (May 19, 2014), CBP classified Heavy-Duty Bulkpak Containers, made of either high density polyethylene or polypropylene plastic and used to ship automotive vehicle parts from Mexico to various locations in the United States, as IITs. See also HQ 112534 (January 25, 1993)(classifying reusable plastic boxes designed to transport automotive strut components as IITs); HQ H253872 (August 1, 2014)(classifying plastic crates which were primarily used for transportation by the automotive industry as IITs). In the present case, the subject plastic shipping containers are substantial inasmuch as they have a life expectancy of three years. In addition, they are used in significant numbers in international traffic in that there are 198 of them currently in circulation and they are used in approximately 380 shipments a year. 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). In the present case, the subject plastic shipping containers are used for approximately 380 shipments in a year, and are reused at least 380 times a year. As a result, the subject plastic shipping containers qualify as IITs. HOLDING The subject plastic shipping containers 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