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HQ 111429


March 20, 1991

BOR-7-07-CO:R:IT:P 111429 BEW

CATEGORY: CARRIER

Thomas C. Binger
Connell Bros. Company, Ltd.
320 California Street
San Francisco, California 94104

RE: Eligibility of certain polypropylene bags to be designated as instruments of international traffic (IIT)

Dear Mr. Binger:

This is in reference to your letters dated November 29, 1990 and March 3, 1991, requesting that certain polypropylene "Mini Bags" be designated as instruments of international traffic

FACTS:

You state that you anticipating using approximately 500 to 3,500 polypropylene bags monthly into the United States. You state that the large size of the bags and their sturdy construction allows them to be used five (5) or (6) times before they will be destroyed. You state that the bags are made of heavy duty polypropylene fabric, and that the bags are filled and emptied via a reclosable spout. You state that because of this type of closure, the bags do not have to be cut nor have their structural integrity damaged in any way upon filling or discharging of the kaolin clay. You state that the bags are multistrip bags and, therefore are stronger than the normal polypropylene bag. You state that the polypropylene bags will be used to transport dry Kaolin clay and will hold one metric ton. You state that the port of entry and departure will be Savannah, Georgia, but could include Oakland, California, Baltimore, Maryland, Charleston, South Carolina, and New Jersey.

ISSUE:

Whether the heavy duty polypropylene bags used for the transportation of dry Kaolin clay may be designated as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and section 10.41a, Customs Regulations.

LAW AND ANALYSIS:

Section 322(a), Tariff Act of 1930, as amended (19 U.S.C. 1322(a)), provides that "[v]ehicles and other IIT, of any class specified by the Secretary of the Treasury, shall be granted the customary exceptions from the application of the customs laws to the extent and subject to such terms and conditions as may be prescribed in regulations or instructions of the Secretary of the Treasury."

The Customs Regulations issued under the authority of section 322(a) are in section 10.41a (19 CFR 10.41a). Paragraph (a)(l) of section 10.41a designates as IIT lift vans, cargo vans, shipping tanks and certain other named articles and states that other articles may be designated as IIT by the Commissioner of Customs in decisions to be published in the weekly Customs Bulletin. Once designated as instruments of international traffic, these items may be released without entry or the payment of duty, subject to the provisions of section 10.41a.

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 CFR 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 former Headnote 6(b)(ii), Tariff Schedules of the United States (HTSUS), as well as Headquarters Decisions 104766; 108084; 108658; 109665; and 109702).

The concept of reuse contemplated above is for commercial shipping or transportation purposes, and not incidental or fugitive uses. Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at 99. See Holly Stores, Inc. v. United States, 697 F.2d 1387 (Federal Circuit, 1982).

In Holly Stores, supra, the court determined that "reuse" in the context of former General Headnote 6(b)(ii) "has been consistently interpreted to mean practical, commercial reuse, not incidental reuse." (Emphasis added). In that case, articles of clothing were shipped into this country on wire or plastic coat hangers. Evidence showed that the hangers were designed to be, and were of fairly durable construction and that it would be physically possible to reuse them. However, the court found that only about one percent of the hangers were reused in any way at all, and that those uses were of a noncommercial nature. The court held that the uses of these hangers beyond shipping them once from overseas to the United States were purely incidental, and concluded that the hangers were "not designed for, or capable of, reuse". Subsequent Customs rulings on this matter have held that single use is not sufficient; reuse means more than twice (Headquarter rulings 105567 and 108658). Furthermore, it is our position that the burden of proof to establish reuse is on the applicant, even though the applicant may not be the party reusing the instrument.

We find that the bags under consideration are woven heavy duty polypropylene bags capable of being used as a container or holder, that they are substantial, suitable for and capable of repeated use, and that they will be used in significant numbers in international traffic. We further find that the woven polypropylene bags under consideration are similar to woven polypropylene bags which were designated as instruments of international traffic in Treasury Decision 76-171 (woven polypropylene bags, and used for the transportation of dry chemicals), and Treasury Decision 68-4 (collapsible nylon container capable of holding zinc dust or similar material).

The designation of a container or holder as an IIT becomes effective only when used as such upon its arrival in this country in foreign trade, either empty or with merchandise. If the holder or container is brought into the country by a party other than the one who is using it as an IIT, it is subject to entry as imported merchandise. The principal on the IIT bond is the party who is using the holder or container as an IIT.

HOLDING:

The heavy duty polypropylene bags under consideration qualify for treatment as instruments of international traffic and may be released under the procedures set forth in section 10.41a, Customs Regulations.

Sincerely,

B. James Fritz

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