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HQ 114008




June 11, 1998

BOR-4-07-RR:IT:EC 114008 GG

CATEGORY: CARRIER

Mr. Chester R. Krayton
Customs Trade Consultants
P.O. Box 626
Manalapan, New Jersey 07726

RE: Instruments of International Traffic; Molded Polyurethane Trays for Transportation of Brake Drums; Reusable Wooden Tops; Wooden Pallets; 19 U.S.C. ?1322(a); 19 CFR ?10.41a

Dear Mr. Krayton:

This is in response to your ruling request, dated June 19, 1997, made on behalf of your client, Dana Corporation ("Dana"). We regret the delay in responding.

FACTS:

Dana imports brake drums from a Canadian supplier. The brake drums are packed into a molded polyurethane tray. Each tray holds 18 brake drums. The dimensions of the trays are 45.5" wide, 54" long, and 2" high. The trays are stocked on wooden pallets. Each pallet usually holds 10 trays. A reusable wood top approximately the same size as a tray is placed on the highest tray stacked on reusable wooden pallets. All three packing materials are bound together with a steel band.

The cost of the three articles and their approximate life expectancy are as follows:

Article Cost Life Expectancy
Wood Pallet $15 each 1-2 years
Wood Top $10 each 1-2 years
Polyurethane Tray $15 each 5-7 years

The articles are shipped back to the Canadian supplier for reuse in packaging the brake drums for export to the United States.

ISSUE:

Whether molded polyurethane trays, wooden tops, and wooden pallets designed to package brake drums are instruments of international traffic within the meaning of 19 U.S.C. ?1322(a) and 19 CFR ?10.41a.

LAW AND ANALYSIS:

Title 19, United States Code, Section 1322(a) (19 U.S.C. 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 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.

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 ?10.41a.

To qualify as an instrument of international traffic within the meaning of 19 U.S.C. ?1322(a) and 19 CFR ?10.41a, 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), as well as Headquarters Ruling Letters (HRL) 113279, dated November 23, 1994; 112327, dated April 2, 1993; and 112503, dated December 2, 1992.

There is ample precedent to support a finding that the plastic trays are instruments of international traffic. Treasury Decisions 68-56, 74-281 and 75-265, and HRL's 112393, dated August 14, 1992, and 112534, dated January 25, 1993, each held that molded plastic trays designed to transport specific items, in those cases automotive parts, bread, and berries, met the criteria to qualify as instruments of international traffic. HRL 112393 is especially applicable because the item in question was a reusable pallet set made to carry automotive struts. The pallet set consisted of multiple molded plastic trays, which fit onto a base pallet and were protected by a cap on top. These are very similar to the items selected by Dana to transport the brake drums: molded polyurethane trays, wooden pallets, and a wooden top. The existence of supporting precedents, and the fact that the life expectancies of these items indicate repeated use, satisfies us that they meet the criteria for designation as instruments of international traffic within the meaning of 19 U.S.C. ?1322(a) and 19 CFR ?10.41a.

HOLDING:

The molded polyurethane trays, wooden pallets, and wooden tops used to transport brake drums are instruments of international traffic within the meaning of 19 U.S.C. ?1322(a) and 19 CFR ?10.41a.

Sincerely,

Jerry Laderberg
Chief
Entry Procedures and Carriers
Branch

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