HQ H024623 - Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a - United States International Trade Commision Rulings

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 > 2008 HQ Rulings > HQ H023513 - HQ H024739 > HQ H024623

Previous Ruling Next Ruling
HQ H024623

April 11, 2008

BOR-4-07-OT:RR:BSTC:CCI H024623 JLB

CATEGORY: CARRIER

Mr. Damon V. Pike
President
The Pike Law Firm, P.C.
1201 Peachtree Street
400 Colony Square, Suite 200
Atlanta, Georgia 30361

RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a

Dear Mr. Pike:

This is in response to your correspondence of March 7, 2008, in which you requested a ruling, on behalf of your client, AstenJohnson, Inc., to classify plastic spools and scrap monofilament yarn as “instruments of international traffic” pursuant to 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. Our ruling on your request follows.

FACTS

AstenJohnson, Inc. designs, manufactures, and markets paper machine clothing for all sections of the paper machine industry. Paper machine clothing is a highly-engineered textile fabric installed on paper machines to carry the paper stock through each stage of the paper-making process. The only material used in the production of paper machine clothing is monofilament yarn. This yarn is manufactured at a plant in Williston, Vermont and then shipped to the company’s manufacturing locations in Canada, China, Belgium, and the Czech Republic, or to third party customers in Europe and Asia.

The yarn is shipped on plastic, reusable spools of various sizes. Over 20,000 spools a month are transported back and forth over the U.S. border. While in most instances the yarn is completely removed from the spool at the foreign manufacturing location or by the customer, there are some instances where the foreign plants or customers find it more convenient to leave a trace amount of scrap yarn on the spool rather than removing it themselves. The empty or nearly-empty spools are then shipped back to the U.S. plant and filled with a new batch of monofilament yarn. When the spools arrive at the Vermont plant, the boxes containing the spools are opened and any remaining scrap yarn, which is usually ragged, in various lengths, and unusable by any potential subsequent purchaser, is removed from the spools and discarded as scrap or waste. AstenJohnson, Inc. recognizes that no secondary market exists for this scrap yarn, therefore, all the scrap yarn is entirely discarded after it is removed from the spools.

ISSUES

Whether the plastic spools described above are “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a?

Whether the scrap monofilament yarn described above should be designated an “accessory” of an “instrument of international traffic” pursuant to 19 C.F.R. § 10.41a(a)(3)?

LAW AND ANALYSIS

Pursuant to 19 U.S.C. § 1322(a), “vehicles and other instruments of international traffic, of any class specified by the Secretary of [Homeland Security], 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” Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics are explicitly classified as “instruments of international traffic.” 19 C.F.R. § 10.41a(a)(1). Additionally, the Commissioner of U.S. Customs and Border Protection (“CBP”) is authorized to designate other items besides those mentioned as “instruments of international traffic.” This includes “the normal accessories and equipment imported with any such instrument which is a container as defined in Article 1 of the Customs Convention on Containers.” 19 C.F.R. § 10.41a(a)(3). Once designated as such, the instruments may be released without entry or payment of duty.

To qualify as an “instrument of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 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 Headquarters Ruling Letter 109665, dated September 12, 1988; Headquarters Ruling Letter 109634, dated August 11, 1988; see also Headquarters Ruling Letter 113687, dated February 27, 1997. The concept of reuse contemplated above is for commercial shipping or transportation purposes, and not incidental or fugitive uses. See Tariff Classification Study, Sixth Supplemental Report (May 23, 1963) at 99; see also Holly Stores, Inc. v. United States, 697 F.2d 1387, 1388 (Federal Cir., 1982).

It is well settled that plastic spools designed to hold yarn can qualify as “instruments of international traffic.” We note that CBP has previously held that spools, bobbins, cops, and pins made of wood, base metal, or plastic or a combination thereof, qualify as “instruments of international traffic.” See, e.g., Treasury Decision (T.D.) 56543; Headquarters Ruling Letter 113694, dated October 24, 1996 (holding that spools used to transport optical fiber are “instruments of international traffic”); Headquarters Ruling Letter 112836, dated October 7, 1993 (plastic spools used to ship glass fiber overseas were “instruments of international traffic”); Headquarters Ruling Letter 111196, dated April 8, 1991 (holding that plastic reels for the transportation of monofilament fishing line are “instruments of international traffic”). In Headquarters Ruling Letter 113554, dated August 31, 1995, CBP specifically held that heavy-duty, rigid plastic spools used to transport yarn are “instruments of international traffic.”

Upon reviewing the request, the plastic spools appear to be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic with over 20,000 spools a month transported back and forth across the U.S. border. Furthermore, CBP has previously ruled that plastic spools of similar use and construction as those presently under consideration qualify as “instruments of international traffic” pursuant to 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a. Accordingly, plastic spools used to transport yarn qualify as “instruments of international traffic.” The instruments may be released without entry or payment of duty.

With respect to any scrap monofilament yarn remaining on the spools, you state that since the foreign plants and customers find it more convenient to leave the scrap yarn on the spool rather than remove it themselves and since the yarn will be discarded in its entirety when it arrives at the Vermont plant, that the monofilament yarn should be designated an “accessory” of an “instrument of international traffic” container pursuant to 19 C.F.R. § 10.41a(a)(3).

In this regard we refer to 19 C.F.R. § 10.41a(a)(3) which provides:

“As used in this section, ‘instruments of international traffic’ includes the normal accessories and equipment imported with any such instrument which is a ‘container’ as defined in Article 1 of the Customs Convention on Containers.”

The Customs Convention on Containers defines the term “container” as an:

..article of transport equipment (lift-van, movable tank or other similar structure):

(i) fully or partially enclosed to constitute a compartment intended for containing goods; (ii) of a permanent character and accordingly strong enough to be suitable for repeated use; (iii) specially designed to facilitate the carriage of goods, by one or more modes of transport, without intermediate reloading; (iv) designed for ready handling, particularly when being transferred from one mode of transport to another; (v) designed to be easy to fill and to empty; and (vi) having an internal volume of one cubic metre or more;
the term “container” shall include the accessories and equipment of the container, appropriate for the type concerned, provided that such accessories and equipment are carried with the container. The term “container” shall not include vehicles, accessories or spare parts of vehicles, or packaging. Demountable bodies, are to be treated as containers;

Customs Convention on Containers, 1972, Ch. 1, Art. 1(c), et seq.

While it is readily apparent that the spools in question are “instruments of international traffic” as discussed above, it is equally apparent that they are not “containers” as defined in the Customs Convention on Containers. Consequently, the provisions of 19 C.F.R. § 10.41a(a)(3) are inapplicable in this case.

Assuming, arguendo, the applicability of § 10.41a(a)(3), while we note that the term “accessory” is defined as “a subordinate or supplementary part, object, or the like, used mainly for convenience, attractiveness, safety..” we disagree with your interpretation that the subject yarn is an “accessory” merely because foreign plants or customers find it more convenient to leave the scrap yarn on the spool rather than remove it themselves. Dictionary.com Unabridged, (v.1.1)). Rather the Oxford English Dictionary provides a more constructive definition of “accessory” as “a thing which can be added to something else to make it more useful, versatile, or attractive.” Compact Oxford English Dictionary, Oxford University Press, 2008. After an examination of previous CBP rulings, this definition is reinforced as acceleration-measuring devices, container security units, and tamper-resistant embedded controllers constitute “accessories” within the meaning of 19 C.F.R. § 10.41a(a)(3). See Headquarters Ruling Letter H004789, dated January 12, 2007; Headquarters Ruling Letter 116288, dated August 12, 2004; Headquarters Ruling Letter 116684, dated August 17, 2006. These examples of “accessories” demonstrate that the scrap yarn is not an “accessory” given that it is not a part of the spool added for convenience sake but is merely an item stored on the spool for transportation purposes. Additionally, the scrap yarn does not remain on the spool to make it more “useful, versatile, or attractive.” You concede that leaving the yarn on the spool serves no purpose; the scrap yarn is entirely discarded at the Vermont plant and is of no value to either AstenJohnson, Inc. or anyone who wishes to purchase it.

Accordingly, as discussed above, the subject scrap yarn does not constitute an “accessory” of an “instrument of international traffic” and may not be released without entry or payment of duty.

HOLDINGS

The plastic spools described above are “instruments of international traffic” within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a.

The scrap monofilament yarn described above is not an “accessory” of an “instrument of international traffic” pursuant to 19 C.F.R. § 10.41a(a)(3).

Sincerely,

Glen E. Vereb, Chief

Previous Ruling Next Ruling