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HQ 114506

October 29, 1998

BOR-7-RR:IT:EC 114506 LLB


Ms. Barbara Dawley
330 Madison Avenue
39th Floor
New York, New York 10017

RE: Instrument of International Traffic; Plastic tote boxes; Holders for automobile parts; 19 U.S.C. 1322(a); 19 CFR 10.41a

Dear Ms. Dawley:

Reference is made to your letter of October 6, 1998, in which you request that we rule upon the designation of certain so-called "orikon tote boxes" as Instruments of International Traffic. Our ruling follows.


A company known as Denso Sales California, Inc., is an importer of automotive parts. The company uses four types of containers known as totes to ship various small automobile replacement parts from Japan into the United States. The totes are used in conjunction with components known as plastic slip sheets and cloth straps. Each fully assembled tote actually consists of a series of plastic trays into which are placed automobile parts such as hoses, connectors, and bolt kits. The trays are stacked either three or four high, and each such stack is separated from a similarly configured stack by a plastic slip sheet. The slip sheets are constructed such that the assembled units may be moved with the use of forklifts. Each stack is secured and held together as a unit by use of the cloth straps which are made of nylon and are fitted with metal rings. It is stated that the totes have a useful life span of some ten years in use. The tote trays are marked with the company name and an alpha-numeric designation depending upon which of the four types it might represent (C-1, C-3, C-4, or C-A). After use in transporting parts into the United States, the units are broken down and strapped together as appropriate before being sent back to Japan empty for further use in importing parts.


Whether the described articles qualify for designation as Instruments of International Traffic, thus permitting their repeated introduction into the United States without the need for entry and duty payment.


Title 19, United States Code, section 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 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.

Section 10.41a(a)(1) also authorizes the Commissioner of Customs to designate other items as instruments of international traffic in decisions to be published in the weekly Customs Bulletin. Once designated as instruments of international traffic, these items may be released without entry or the payment of duty, subject to the provisions of section 10.41a.

To qualify as an "instrument of international traffic" within the meaning of 19 U.S.C. 1322(a) and the regulation 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 (HTSUS), as well as Headquarters Decisions 104766; 108084; 108658; 109665; and 109702).

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).

In Holly Stores, supra, the court determined that "reuse" in the context of former General Headnote 6(b)(ii) "has been consistently interpreted to mean practical, commercial reuse, not incidental reuse." (Emphasis added). In that case, articles of clothing were shipped into this country on wire or plastic coat hangers. Evidence showed that the hangers were designed to be, and were of fairly durable construction and that it would be physically possible to reuse them. However, the court found that only about one percent of the hangers were reused in any way at all, and that those uses were of a noncommercial nature. The court held that the uses of these hangers beyond shipping them once from overseas to the United States were purely incidental, and concluded that the hangers were "not designed for, or capable of, reuse". Subsequent Customs rulings on this matter have held that single use is not sufficient; reuse means more than twice (Headquarter rulings 105567 and 108658).


Following a thorough consideration of the evidence presented, as well as an analysis of the law and applicable precedents, we have determined that the orikon tote boxes including the associated plastic slip sheets and cloth straps submitted for our consideration, meet the requirements necessary for designation as Instruments of International Traffic.


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