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HQ 112188


April 28, 1992

BOR-7-07-CO:R:IT:C 112188 GEV

CATEGORY: CARRIER

James D. Harris
Manager Customs Services
CP Rail
Post Office Box 6042
Station A
Montreal, Quebec, Canada H3C 3E4

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

Dear Mr. Harris:

This is in response to your facsimile transmission dated April 3, 1992 (your file no. F-620.06-G) requesting a ruling regarding a proposed movement of containers. Our ruling is set forth below.

FACTS:

Cast Shipping Lines currently moves empty containers from Montreal, Quebec, Canada, to locations in the midwest of the United States for return loading export traffic through the Port of Detroit by rail and then by vessel from the Port of Montreal.

There is a proposal to move some of these empty containers by truck from Montreal to Massena, New York, where they will be loaded with aluminum ingots destined to Chicago, Illinois, for distribution to other midwest locations. These containers would move from Massena to Montreal by truck and then be railed to Chicago for further distribution by truck to various consignees.

The empty containers would then be used for loading export traffic from various U.S. cities for export through the Port of Detroit.

ISSUE:

Whether the proposed movement of containers as described above constitutes their use as instruments of international traffic in compliance with section 10.41a(f), Customs Regulations.

LAW AND ANALYSIS:

Section 141.4, Customs Regulations (19 CFR 141.4), provides that entry as required by title 19, United States Code, section 1484(a) (19 U.S.C. 1484(a)), shall be made of every importation whether free or dutiable and regardless of value, except for intangibles and articles specifically exempted by law or regulations from the requirements for entry. Since the containers in question are not within the definition of intangibles as shown in General Note 4, Harmonized Tariff Schedule of the United States Annotated (HTSUSA; 19 U.S.C. 1202, as amended), they are subject to entry and payment of any applicable duty if not specifically exempted by law and regulations.

Instruments of international traffic may be entered without entry and payment of duty under the provisions of 19 U.S.C. 1322 which provides in pertinent part that:

Vehicles 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 authority delegated to the Secretary by this subsection shall not extend to communications satellites and components and parts thereof.

Regulations have been promulgated by Customs to administer 1322, and they do provide some latitude in the use of designated instruments of international traffic. Section 10.41a(f), Customs Regulations (19 CFR 10.41a(f)), provides that the following are permitted:

1. The use of an IIT container at intervening points while it is in use between its port of arrival and the destination point for its imported cargo.

2. The use of an IIT container at intervening points between the point of destination for its imported cargo and a point where export cargo is to be loaded, or from there to its departure port.

3. The use of an IIT container at intervening points, which arrived in the U.S. empty and is being taken to the point where export cargo is to be loaded or from there to its port of departure from the U.S.

All three of these uses are allowed only on condition that they be reasonably direct and incidental to the efficient and economical utilization of the IIT container in the course of its use in international traffic.

Upon reviewing the proposal under consideration, we note that once loaded in Massena and transported to Chicago the containers would then be subject to "distribution to other midwest locations." (see also the reference to "various consignees") In addition, the itinerary also includes the empty containers loading export cargo from "various U.S. cities." In view of this lack of specificity as to the route of these containers once in the U.S. we are unable to conclude that their use is in fact a valid use in international traffic. Accordingly, in the absence of evidence to the contrary it is our position that the proposed movement of the subject containers is not in compliance with 19 CFR 10.41a(f).

HOLDING:

The proposed movement of containers as described above does not constitute their use as instruments of international traffic and is therefore in violation of 19 CFR 10.41a(f).

Sincerely,

B. James Fritz

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