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HQ 956547


October 12, 1994

CLA-2 CO:R:C:F 956547 ALS

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.10.0000; 3923.90.0000

Mr. Frank Parker, Jr.
Parker and Co.
U.S. Customs Broker
P.O. Box 271
Brownsville, TX 78521

RE: Reusable Plastic Shipping Containers from Mexico; Article 509, NAFTA

Dear Mr. Parker:

This is in reference to your request of May 4, 1994, concerning classification, value and entry aspects of importing the subject items. This response will be limited to the classification of the shipping containers.

FACTS:

The subject containers are in the form of plastic open shipping tubs and pallets in different sizes which are manufactured in Mexico. The containers are made from sheets of plastic manufactured in the United States which are thermo- formed in molds in Mexico. The containers are used to transport raw materials and finished products between the plants in Mexico and the U.S. The pallets and tubs are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. The plastic containers have been designated as instruments of international traffic and are presently released without entry or the payment of duty, subject to the relative provisions of the Customs Regulations.

ISSUE:

What is the classification of the tubs and pallets use in the international transportation of raw materials and finished products?

LAW AND ANALYSIS:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI's) taken in order.
GRI 1 provides that the classification is determined first in accordance with the terms of the headings and any relative section and chapter notes. If GRI 1 fails to classify the goods and if the headings and legal notes do not otherwise require, the remaining GRI's are applied, taken in order.

In considering the classification of the subject shipping tubs and pallets we noted that they, although differing in shape, perform a similar function. They facilitate the shipment of merchandise or materials between different locations. We note that the tubs and pallets are substantial, suitable for and capable of repeated use, and are used in significant numbers in international traffic. Further, the articles have been designated as instruments of international traffic and may be released without entry or the payment of duty pursuant to the provisions of section 10.41a, Customs Regulations (19 CFR 10.41a).

The ruling request states that these items have been entered free of duty pursuant to NAFTA under subheading 3923.10.0000, HTSUSA. The provision covers boxes, cases, crates and similar articles of plastics designed for the conveyance or packing of goods. We agree that both the tubs and pallets are used for conveyance purposes and that the tubs would be classifiable in such subheading. However, pallets of plastics, as we noted in Headquarters Ruling Letter (HRL) 955283, issued March 17, 1994, are not classifiable under that provision. That ruling held that plastic pallets are classifiable under the provision for other articles of plastics used for the conveyance or packing of goods.

Both of the subject products are fabricated in Mexico from plastic sheeting produced in the United States.

HOLDING:

Open tubs of plastics used to facilitate the transportation of products between various locations are classifiable in subheading 3923.10.0000, HTSUSA, and are subject to a general rate of duty of 3 percent ad valorem.

Pallets of plastics used to facilitate the transportation of products between various locations are classifiable in subheading 3923.90.0000, HTSUSA, and are subject to a general rate of duty of 3 percent ad valorem.

Since the finished products are fabricated in Mexico from sheets which are manufactured in the United States and are considered originating materials, they are eligible for preferential treatment under NAFTA pursuant to General Note 12(b)(iii), HTSUSA. Such merchandise, produced in Mexico, is eligible for a free special rate of duty.

Sincerely,

John Durant, Director
Commercial Rulings Division

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