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HQ 110453


November 21, 1989

BOR-7-07-CO:R:P:C 110453 KVS

CATEGORY: CARRIER

Mr. Richard Seley
Richard Miles & Sons
4950 Gateway East
P.O. Box 144
El Paso, TX 79942

RE: Instrument of international traffic; steel hazardous waste containment pallet

Dear Mr. Seley:

This is in response to your letter of August 28, 1989, which requests that certain steel secondary containment pallets be designated as instruments of international traffic. Three issues are raised for our determination.

ISSUES:

(1). Whether it is possible for steel hazardous waste pallets to be designated as instruments of international traffic.

(2). Whether pallets imported for sale to domestic companies are dutiable when used by these subsequent purchasers in international traffic.

(3). Whether the Tariff Schedule Classification item number required by Customs Regulation section 10.41b(c)(1) will actually be 9803 instead of 9803.00.50, since no other classifications appear in the 9803 series.

FACTS:

An importer imports steel hazardous waste pallets from both Hong Kong and Mexico. The port of entry for the Hong Kong pallets is San Francisco, California, where the appropriate duty is paid. The port of entry for the Mexican pallets is Laredo, Texas. The Mexican pallets enter the United States duty-free under the Generalized System of Preferences.

After importation, the pallets are sold to various companies, some of whom have operations in Mexico. It is asserted that these companies use the pallets for "safe storage" and "to ship products such as chemicals in drums between the United States and Mexico".

LAW AND ANALYSIS:

(1). Section 322(a), Tariff Act of 1930, as amended (19 U.S.C. 1322(a)), provides that "[v]ehicles 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 Customs Regulations issued under the authority of section 322(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.

As an explicitly listed item, pallets are prima facie within the purview of section 322(a), Tariff Act of 1930, as amended (19 U.S.C. 1322(a)). This determination is made according to the facts in each case.

(2). Under the facts given, the hazardous waste pallets enter the United States under the auspices of the original importer, who then sells them in the domestic market. The fact that some of the pallets are sold to companies with interna- tional operations is not persuasive when determining the pallets' classification upon entry. Therefore, the hazardous waste pallets under consideration cannot be classified as instruments of international traffic.

A related issue - whether the pallets can be classified as instruments of international traffic in the hands of a subsequent purchaser when used for storage and shipment abroad - is hypothetical; no ruling can issue on such matters pursuant to 19 CFR 177.7(a).

(3). Section 10.41b(c)(1)(i) of the Customs Regulations (19 CFR 10.41b(c)(1)(i)) specifically lists subheading 9803.00.50 as the precise marking the owner shall place on the serially numbered holders or containers.

It is the policy of the Customs Service to utilize the most specific subheading classification provided. This policy serves to ensure optimum clarity in the event that the Harmonized Tariff Schedule may amended by Congress in the future with additional subheadings at the same or higher rate of duty.

HOLDING:

(1). The steel secondary containment hazardous waste pallets under consideration do not qualify for treatment as instruments of international traffic under the facts before us. The importer is merely importing goods for domestic sale.

(2). Serially numbered holders or containers should be marked 9803.00.50, as required by Customs Regulation section

Sincerely,

B. James Fritz

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