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NY F83042

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March 27, 2000

CLA-2:RR:NC:SP:230 F83042

CATEGORY: CLASSIFICATION

Mr. David P. Sanders
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
1875 Connecticut Avenue, N.W.
Washington, D.C. 20009-5728

RE: The tariff classification of wooden pallets, imported with goods packed thereon, from Mexico.

Dear Mr. Sanders:

In your letter dated February 10, 2000, together with supplements dated Feb. 23, Feb. 24 and March 8, 2000, you requested a tariff classification ruling on behalf of your client, Alcoa Fujikura, Ltd. (“AFL”).

The ruling was requested to ascertain the proper tariff treatment of certain wooden pallets that are imported into the United States bearing various automotive components produced in Mexico. You assert that the pallets are not suitable for repetitive use and should be regarded as “usual packing.” Therefore, pursuant to General Rule of Interpretation (GRI) 5(b), Harmonized Tariff Schedule of the United States (HTS), you seek our concurrence that the pallets are classifiable with the goods they contain, i.e., that they should not be entered separately under their own tariff heading.

You describe the subject items as standard wooden pallets used throughout industry in the packing and shipment of merchandise. They measure either 48” x 45” or 48” x 42”. Annotated photos you submitted indicate that the individual stringers on the pallets have cross-section dimensions of 3-1/8” or 3½” wide by 1½” thick, while the top and bottom deck boards in all instances are 3½” wide x ½” thick. You state that the relative cost of the pallets will range from about 0.25% to 1.6% of the entered value of the merchandise packed on them.

AFL will use pallets from two sources. In approximately 60% to 90% of shipments, the pallets are purchased from Mexican suppliers. These pallets arrive at AFL’s Mexican facility in new condition. AFL will then pack the pallets with finished merchandise in cardboard boxes that are either stapled to or shrink-wrapped to the pallets and shipped to the United States. AFL’s customers do not return the pallets to AFL once the merchandise is unloaded. In the remaining 10% to 40% of shipments, AFL plans to reuse pallets that arrive at its Mexican facility loaded with goods from various material suppliers. (Over 90% of AFL’s raw material suppliers are located in the U.S.) AFL will inspect these pallets, select those that are in good condition and of the proper size for its needs, and then use them for shipments of its own. Once received by customers, these pallets will not be returned to AFL.

GRI 5(b) states, in pertinent part:
packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

You maintain that the subject pallets are covered by the first sentence of GRI 5(b), as quoted above. You note that because the pallets are always used by AFL to ship its finished goods, and the pallets are not returned to AFL by its customers, they are “of a kind normally used” to pack these goods. You also assert that the physical construction of the pallets (regardless of their source), together with the fact that AFL uses them only once for its finished goods, is sufficient to deem them not “clearly suitable” for repetitive use.

We agree. Of particular note is that the top deck boards of the instant pallets are only ½” thick, a size that would generally be used only for “expendable” pallets (as opposed to reusable ones, which would tend to have deck boards measuring about 1” or more in thickness). Furthermore, it appears from the submitted photos that the pallets are composed of rough, low-grade lumber. In light of these factors, and in recognition of the circumstances you have outlined, we conclude that all of the pallets in question should be classified with the goods packed thereon, in accordance with GRI 5(b).

The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in 19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. In the event that the facts or merchandise are modified in any way, you should bring this to the attention of Customs and you should resubmit for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by the Customs Service. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Paul Garretto at 212-637-7009.

Sincerely,

Robert B. Swierupski
Director,

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