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HQ 116451




May 31, 2005

BOR-4-07-RR:IT:EC 116451 IDL

CATEGORY: INSTRUMENTS OF INTERNATIONAL TRAFFIC

Britt Buice
Customs/FTZ Specialist
Mercedes-Benz U.S. International, Inc.
P.O. Box 100
Tuscaloosa, Alabama 35403-0100

RE: Instruments of International Traffic; “Battery Cut-Off Switches;” Subheading 9803.00.50, HTSUSA; 19 U.S.C. § 1322; 19 CFR § 10.41a

Dear Mr. Buice:

This is in response to your letter to the Director, National Commodity Specialist Division, dated March 28, 2005, and concerning “battery cut-off switches,” which has been forwarded to this office for our review. Our ruling on this matter is set forth below.

FACTS:

Mercedes-Benz U.S. International, Inc. (“Mercedes”) has a factory in Alabama that exports over 45,000 M-Class sport utility vehicles annually. Mercedes attaches a specially designed cut-off switch to the battery terminal of each vehicle it prepares for export from the Alabama factory. The cut-off switch serves to deactivate the battery/electrical system of a vehicle in transit for an extended ocean voyage. Upon arrival of a vehicle at its destination port, Mercedes removes the battery cut-off switch and returns it to the Alabama factory for reuse in a subsequent shipment of vehicles.

You’ve stated that the switch is manufactured in Mexico, and qualifies for duty-free treatment under the North American Free Trade Agreement (NAFTA) on the initial importation. Mercedes requests permission to consider these switches as “instruments of international traffic.”

ISSUE:

Whether the battery cut-off switches described above may be considered “instruments of international traffic” within the meaning of 19 U.S.C. § 1322 and 19 CFR § 10.41a, and therefore, are classifiable under subheading 9803.00.50, HTSUSA?

LAW AND ANALYSIS:

Title 19, United States Code, § 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 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." The U.S. Customs and Border Protection (CBP) Regulations issued under the authority of § 1322(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. 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 the regulations 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 (TSUS), as well as Headquarters Decisions.

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). CBP rulings on this matter have held that single use is not sufficient; reuse means more than twice (Headquarter rulings 105567 and 108658).

It is our position that since the switches do not contain or hold transported merchandise, as discussed above, the requisite criteria for designation of the subject battery cut-off switches as “instruments of international traffic” are not met. The sample you provided is returned herewith.

HOLDING:

Accordingly, the battery cut-off switches described above may not be considered “instruments of international traffic” within the meaning of 19 U.S.C. § 1322 and 19 CFR § 10.41a, and therefore, are not classifiable under subheading 9803.00.50, HTSUSA.

Sincerely,

Glen E. Vereb
Chief

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