United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0111571 - HQ 0111693 > HQ 0111655

Previous Ruling Next Ruling


HQ 111655


December 2, 1991

BOR-7-07-CO:R:IT:C 111655 MLR

CATEGORY: CARRIER

R. W. Yager
Special Operations
Norman G. Jensen, Inc.
P.O. Box 1450
Blaine, WA 98230

RE: Instruments of International Traffic; Plastic Pails; 19 U.S.C. 1322

Dear Mr. Yager:

This is in reference to your letter dated April 15, 1991, on behalf of Leo's Floral and Trucking, requesting a ruling that certain plastic pails are instruments of international traffic. Our ruling is set forth below.

FACTS:

United Flower Growers conducts flower auctions in Burnaby, B.C., Canada, and maintains approximately 10,000 plastic pails. Leo's Floral and Trucking, of Richmond, B.C., Canada, uses these Canadian-made plastic pails to truck cut flowers about three times a week from Canada to the United States. Most of the pails are round and have a holding capacity of either 5 U.S. gallons, 2 U.S. gallons, or 6 liters; the square pails hold 4 U.S. gallons. All pails are labeled with the United Flower Growers's symbol and either with the words: "Return for Refund" or "Return for Deposit." The flowers are delivered to various florists in the United States in these pails which are suitable for many years of repetitive use. When empty, the pails are collected on a subsequent run, returned to the United Flower Growers in Canada, and reused to transport flowers to the United States. The United Flower Growers may require a cash deposit for the pails, which is refunded when they are returned; if a cash deposit is not required, the same number of pails as delivered is to be returned.

ISSUE:

1. Whether reusable, plastic pails used to import cut flowers from Canada may be designated as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and section 10.41a, Customs Regulations (19 CFR 10.41a).

LAW AND ANALYSIS:

Title 19, United States Code, section 1322(a) [19 U.S.C. 1322(a)], provides that "[v]ehicles and other instruments of international traffic, of any class specified by the Secretary of the Treasury, shall be excepted from the application of the customs laws to such 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 contained in section 10.41a (19 CFR 10.41a). Section 10.41a(a)(1) specifically designates lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics as instruments of international traffic.ic.

Section 10.41a(a)(1) also authorizes the Commissioner of Customs to designate other items as instruments of international traffic 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 plastic pails under consideration are 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. In addition, Customs has previously ruled that plastic baskets of similar use and construction, as those under consideration, qualify as instruments of international traffic pursuant to 19 U.S.C. 1322(a) and section 10.41a, Customs Regulations (see Treasury Decision 74-296, and Customs Ruling 105049).

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. In addition, pursuant to section 177.9(c) of the Customs Regulations, a ruling letter is subject to modification or revocation without notice to any person, except the person to whom the letter is addressed. Accordingly, no other person should rely on this ruling or assume that the principles of this ruling will be applied in connection with any transaction other than the one described in this letter.

HOLDING:

Reusable, plastic pails used to import cut flowers from Canada are designated as instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and section 10.41a, Customs Regulations (19 CFR 10.41a).

Sincerely,

B. James Fritz

Previous Ruling Next Ruling

See also: