Instruments of International Traffic; 19 U.S.C. § 1332(a); §§ 10.41a(a)(1), 10a(a)(2); ASML US, Inc.; Shipping Containers and Fixtures for Semiconductor Manufacturing; Accessories

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H323388 May 9, 2022 OT:RR:BSTC:CCR H323388 JLE CATEGORY: Carriers Edward F. Juliano, Jr, Attorney at Law 303 Wyman St. Waltham, MA 02451 RE: Instruments of International Traffic; 19 U.S.C. § 1332(a); §§ 10.41a(a)(1), 10a(a)(2); ASML US, Inc.; Shipping Containers and Fixtures for Semiconductor Manufacturing; Accessories Dear Mr. Juliano: This is in response to your February 9, 2022, ruling request on behalf of ASML US, Inc. In your request, you inquire whether certain shipping containers and associated fixtures that are used exclusively to transport machines for semiconductor manufacturing qualify as “instruments of international traffic” within the meaning of 19 U.S.C. § 1332(a). Our ruling is set forth below. Facts The following facts are from your ruling request and supplements thereto. There are five subject items: individual cases for subassemblies, lockings, carts, transport assemblies, and shock/climate measuring devices. These subject items are designed to ship ASML’s lithography system for semiconductor manufacturing. The installations of the system require both Extreme Ultraviolet Lithography (“EUVL”) machines and Deep Ultraviolet Lithography (“DUV”) machines. The DUV and EUVL machines are built in the Netherlands. The complete machines are then disassembled into modular units and each module is packed in its own custom-made container or pallet. Once the modular units arrive at the U.S. semiconductor manufacturing plant, each modular unit is unpacked in a clean room and tested. The subject items are then returned to the Netherlands by either ocean or air freight. Once the subject items arrive, each item goes through a cleaning process to bring the subject item to “clean room” standards. The process of shipment to the U.S. customer site, unbolting modules from pallets, handing of the subject items and shipment back to the Netherlands causes scratches on metal surfaces, burrs on bolts and screws, and dust contamination on the subject items. All contamination must be removed before the subject items can be reintroduced into ASML’s cleanrooms in the Netherlands. The cleaning process is a major factor in determining the number of times a subject item can be reused in a year. The principal ports of entry are Los Angeles, California, and Seattle, Washington. It is noteworthy that two of the subject items, the subject individual cases and the subject lockings, have been previously considered by CBP in ruling HQ H282408. See ruling HQ H282408 (Apr. 12, 2017). However, due to new facts presented, these subject items will be reconsidered. With respect to the subject individual cases for subassemblies, there are four types referred to in your request: A-1 (“Laser Module Case”), A-2, A-3, A-4. The Laser Module Case was previously considered by CBP in ruling HQ H282408. Id. The subject A-1 case is made from Polypropylene H (PP-H) and Neopolen plastics. All other subject cases are made from plywood reinforced with metal. There are 179 A-1 cases, 110 A-2 cases, 135 A-3 cases, and 205 A-4 cases, which represents a significant increase in numbers from our consideration in HQ H282408. All subject cases have a lifespan of at least seven years and are expected to be reused two to three times per year. Pictured below is an illustration of the subject individual cases. A-1/Laser Module Case A-2  

 A-3 A-4  

  With respect to the subject lockings, the items are designed to secure modular assemblies to shipping containers or pallets. The subject lockings are made from steel. There are two types, referred to as B-1 and B-2 in your request. There are 170 sets of subject B-1 lockings and 36 individual subject B-2 lockings. They have a lifespan of at least seven years and an estimated reuse of two or three times per year. Pictured below is an illustration of the subject lockings. It is noteworthy that, in the present matter, the lockings attach to the shipping containers or pallets with bolts, whereas the lockings considered in H282408 did not. B-1  
 
  B-2  
 
  With respect to the subject lens purge systems, the items provide a pressurized supply of nitrogen gas to the DUV machine’s Starlith Lens Apparatus. The subject system is used to protect the Starlith Lens Apparatus from contamination during shipping. The subject item consists of the lens purge device and the steel cart with shock absorbers it sits upon; all pieces are imported together as one unit. There are 40 subject lens purge systems. They have a lifespan of at least seven years and are expected to be reused two or three times per year. Pictured below is an illustration of the subject lens purge system.


  With respect to the subject transport assemblies, the items hold some modular assemblies for the DUV and EUVL machines and are then themselves secured to intermodal containers. The intermodal containers are ASML-specific and have previously been classified as IITs in HQ H282408. There are three types of transport assembles, referred to as: D-1, D-2, and D-3. They are made from steel. D-3 consists of a steel pallet with additional steel support frames and fixtures attached. There are 36 D-1s, 53 D-2s, and 91 D-3s. They have a lifespan of at least seven years and are expected to be reused two or three times per year. Pictured below is an illustration of a subject transport assembles. D-1  D-2  
 
  D-3   


  With respect to the subject shock/climate measuring devices, these items attach to intermodal containers. There are 503 subject items. They have a lifespan of at least seven years and are expected to be reused two or three times per year. Pictured below is a sample of a subject shock/climate measuring devices.
Issues Whether the subject individual cases for subassemblies qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Whether the subject lockings qualify for consideration as accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(2). Whether the subject carts with lens purge systems qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). Whether the subject transport assemblies qualify for consideration as IITs or as accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1) or 10.41a(a)(2). Whether the subject shock/climate measuring devices qualify for consideration as accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(2). 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 (“IIT”). 19 C.F.R. § 141.4(b)(3). Subheading 9803.00.0, 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). 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 used as a container or holder must be: (1) substantial, (2) suitable for and capable of repeated use, and (3) used in significant numbers in international traffic. See HQ H291037 (Jan. 9, 2018); 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). For certain items, we also consider whether they may be classified as accessories to IITs under 19 C.F.R. §10.41a(a)(2) or (a)(3). Pursuant to 19 C.F.R. § 10.41a(a)(2), (2) Repair components, accessories, and equipment for any container of foreign production which is an instrument of international traffic may be entered or withdrawn from warehouse for consumption without the deposit of duty if the person making the entry or withdrawal from warehouse files a declaration that the repair component was imported to be used in the repair of a container of foreign production which is an instrument of international traffic, or that the accessory or equipment is for a container of foreign production which is an instrument of international traffic. The Center director must be satisfied that the importer of the repair component, accessory, or equipment had the declared intention at the time of importation. Pursuant to 19 C.F.R. § 10.41a(a)(3), an IIT “includes the normal accessories and equipment imported with any such instrument which is a ‘container’ as defined in Article 1 of the Customs Convention on Containers.” 19 C.F.R. § 10.41a(a)(3). Additionally, accessories to IIT must be “substantial, suitable for and capable of repeated use with intermodal containers which are IITs and will serve as accessories or equipment for such containers.” HQ 116684 (Aug. 17, 2006). Individual Cases for Subassemblies of EUVL and DUV Lithography Systems Notably, U.S. Customs and Border Protection (“CBP”) has previously determined that transport equipment constructed from PP-H and Neopolen plastics with a life expectancy of five to ten years qualify as substantial. See HQ H282408 (Apr. 12, 2017). CBP has classified plywood reinforced with metal as substantial. See HQ 113790 (Feb. 21, 1997) and HQ 112503 (Dec. 2, 1992). CBP has held that reusable means using the containers more than twice. See HQ 112627 (May 18, 1993); HQ 111073 (Aug. 16, 1990). When CBP previously examined the questions of designation of the subject laser module cases as IIT, only 25 were used in international traffic, it was determined that quantity was insufficient. See HQ H282408 (Apr. 12, 2017). In the present matter, the number of laser module cases in use now exceeds six hundred. The subject individual cases are substantial insofar they are made from either PP-H and Neopolen or plywood, are reinforced with metal, and have a lifespan of at least seven years. They are capable of repeated use and hundreds of the subject individual cases are to be used in international traffic. Based on the foregoing, the subject individual cases are designated as IITs; therefore, they qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1). Lockings Pursuant to 19 C.F.R. § 10.41a(a)(1), pallets are per se IITs. In HQ H119060, CBP held that “pallets have already been designated as an instrument of international traffic by regulation. See 19 C.F.R. § 10.41a(a).” HQ H119060 (Nov. 9, 2010); see also HQ 115644 (Jun. 24, 2002) (CBP held the subject steel pallets are IITs). CBP has previously held steel is substantial. See HQ 114733 (Nov. 17, 1999); H116376 (Jan. 11, 2005) (CBP determined steel bins and steel chains were substantial); HQ303170 (Apr. 9, 2019) (CBP held steel container racks were substantial). In your previous request, HQ H282408, the subject lockings were not designated accessories to IITs because the subject lockings did not attach to the IIT itself. See HQ H282408 (Apr. 12, 2017). In the present matter, you indicate that the subject lockings now bolt to the steel pallets, which represents a significant new fact. Based upon the information provided, the subject lockings qualify for consideration as accessories of IIT insofar they attach to pallets, are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. Based on the foregoing, the subject lockings are designated as accessories of IITs; therefore, they qualify for entry-free and duty-free treatment as accessories IITs pursuant to 19 C.F.R. § 10.41a(a)(2). Lens Purge System CBP has previously held containers known as “dry shippers” qualified for consideration as IITs. See HQ H155142 (Jul. 10, 2011). The “dry shipper” container used liquid nitrogen as a refrigerant and was capable of maintaining cool temperatures for more than ten days to safely transport biological samples and specimens. See id. The subject lens purge systems provides a pressurized supply of nitrogen gas to the Starlith Lens Apparatus to prevent particulate contamination. The subject items include a steel cart, the Starlith Lens Apparatus, and the lens purge system, all imported together. The subject lens purge systems are substantial insofar they are made from steel and have a lifespan of at least seven years. They are capable of repeated use and 40 of the subject lens purge systems are to be used in international traffic. Based on the foregoing, the subject lens purge systems are designated as an IIT; therefore, they qualify for entry-free and duty-free treatment as IITs pursuant to 19 C.F.R. § 10.41a(a)(1). Transport Assemblies You have asked us to consider this item as either an IIT or as an accessory to an IIT. CBP has previously found that assemblies that “do not hold or contain merchandise independent of the shipping containers in which they are transported” do not qualify as substantial holders or containers. See HQ H319586 (Aug. 26, 2021). As discussed above, the subject transport assemblies attach to the intermodal container. Therefore, they do not operate independently of the shipping containers in which they are transported and, therefore do not qualify for consideration IITs pursuant to 19 C.F.R. § 10.41a(a)(1). CBP has previously designated ASML’s intermodal containers as IITs. See HQ H282408 (Apr. 12, 2017). The subject transport assemblies are secured to the intermodal containers. Based upon the information provided, the subject transport assemblies are accessories of IITs insofar they attach to intermodal containers, are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. Based on the foregoing, the subject transport assemblies are designated as accessories to IITs; therefore, they qualify for entry-free and duty-free treatment as accessories IITs pursuant to 19 C.F.R. § 10.41a(a)(2). Shock/Climate Measuring Devices CBP has previously designated items with similar purposes as accessories of IITs. See HQ 116575 (Jan. 16, 2006) (holding that a shock/climate measuring device attached to intermodal containers was an accessory of an IIT under 19 C.F.R. § 10.41a(a)(2)). Based upon the information provided, the subject shock/climate measuring devices are accessories insofar as they attach to intermodal containers, are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. Based on the foregoing, the subject shock/climate measuring devices are designated as accessories to IITs; therefore, they qualify for entry-free and duty-free treatment as accessories of IITs pursuant to 19 C.F.R. § 10.41a(a)(2). Holding The subject individual cases for subassemblies qualify as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). The subject lockings qualify as accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(2). The subject lens purge systems qualify as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). The subject transport assemblies qualify as accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(2). The subject shock/climate measuring devices qualify as accessories of IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(2). Sincerely yours, W. Richmond Beevers, Chief Cargo Security, Carriers, and Restricted Merchandise Branch