H310382

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H310382 June 25, 2020 BOR-07-OT:RR:BSTC:CCR H310382 TNA CATEGORY: Carriers Herbert J. Lynch Sullivan & Lynch, P.C. Attorneys and Counselors at Law 800 Turnpike Street, Suite 300 North Andover, MA 08145 RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a(a)(1); HTSUS subheading 9803.00.50; World Courier; DV4 and DV10 Dry Vapor Cold Chain Shipping Containers. Dear Mr. Lynch: This is in response to your March 6, 2020, ruling request on behalf of World Courier. You requested a ruling concerning whether certain cold chain dry vapor shipping containers qualify as instruments of international traffic (IITs) and are therefore classifiable under subheading 9803.00.50 of the Harmonized Tariff Schedule of the United States (HTSUS). Our decision follows. FACTS The following facts are from your March 6, 2020, ruling request and your emails of May 11, 2020, and May 26, 2020. The subject merchandise consists of two types of cold chain dry vapor shipping containers, the DV4 and the DV10. World Courier specializes in logistics services to the pharmaceutical industry and companies that require a temperature-controlled supply chain. They are primarily constructed of double-walled aluminum, and contain a unique closure with integrated sensory and communications technology. This allows for constant temperature monitoring of the containers’ contents. The subject DV4 container measures 160 millimeters by 56 millimeters by 295 millimeters, and has a 180 millimeter throat opening. Its weight by volume is 14.3 kilograms with its outer packaging, and 17 kilograms when charged. The subject DV10 container measures 160 millimeters by 102 millimeters by 292 millimeters and has a 215 millimeter throat opening. Its weight by volume is 28 kilograms with its outer packaging, and 37.5 kilograms when packaged charged. The lifespan of these containers is a minimum of one year. There are currently 165 of these containers currently in circulation, and they are used in approximately 2500 shipments a year. They will be reused at least fifteen times a year. World Courier takes delivery of new containers at its headquarters in New York directly from the manufacturer, which is located in New Mexico. World Courier delivers the containers to its customers for loading, retrieves and transports the loaded containers, generally by air freight. World Courier arranges for the delivery of the containers to its customer’s consignee, retrieves the containers after unloading, cleans them and places them back into service inventory. In terms of World Courier’s logistics in the shipment of the subject containers and their importation into the United States, there are several scenarios currently in place. A container can be shipped empty to one of World Courier’s 130 overseas offices to bring merchandise back to the United States for an importer. In the second scenario, filled containers leave the United States for international delivery. In this scenario, the container could also be used for point-to-point international transportation before coming back into the United States, either with merchandise or empty to be positioned for the next job. The last possible scenario is that a container is used for point-to-point shipments within the United States. World Courier stated that while inventory of the DV4 and DV10 is not segregated for domestic or international use, the containers are barcoded and traceable. The following images were submitted with the technical specifications of the subject cold chain dry vapor shipping containers: 
 
 ISSUE Whether the subject cold chain dry vapor shipping containers are IITs within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). LAW AND ANALYSIS Pursuant to 19 U.S.C. § 1322(a), IITs shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. The relevant Customs and Border Protection (CBP) regulations implementing that statute are found at 19 C.F.R. § 10.41a(a)(1) which provides in pertinent part: (a) Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics, arriving (whether loaded or empty) in use or to be used in the shipment of merchandise in international traffic are hereby designated as “instruments of international traffic” [. . .] The Commissioner of Customs [now CBP] is authorized to designate as instruments of international traffic […] such additional articles or classes of articles as he shall find should be so designated. … (d) If an instrument of foreign origin, or of United States origin which has been increased in value or improved in condition by a process of manufacture or other means while abroad, is released under this section and is subsequently diverted to point-to-point local traffic within the United States, or is otherwise withdrawn in the United States from its use as an instrument of international traffic, it becomes subject to entry and the payment of any applicable duties. An instrument of United States origin which has not been increased in value or improved in condition by a process of manufacture or other means while abroad and which is released under this section shall not be subject to entry or the payment of duty if it is so diverted or otherwise withdrawn. 19 C.F.R. § 10.41a(a)(1)(emphasis added). Such instruments may be released without entry or the payment of duty, subject to the provisions of this section. Subheading 9803.00.50, HTSUS provides for the duty-free treatment of: Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing merchandise), or if of foreign production and previously imported and duty (if any) thereon paid, or if of a class specified by the Secretary of the Treasury as instruments of international traffic, repair components for containers of foreign production which are instruments of international traffic, and accessories and equipment for such containers, whether the accessories and equipment are imported with a container to be reexported separately or with another container, or imported separately to be reexported with a container. (footnote and emphasis added). Subchapter 98 of the HTSUS only applies to: (a) Substantial containers or holders which are subject to tariff treatment as imported articles and are: (i) Imported empty and not within the purview of a provision which specifically exempts them from duty; or (ii) Imported containing or holding articles, and which are not of a kind normally sold therewith or are entered separately therefrom; and (b) Certain repair components, accessories and equipment. See U.S. Note 1, et seq., Chapter 98, HTSUS. Pursuant to 19 C.F.R. § 10.41a(a)(1), “[t]he Commissioner of Customs [currently CBP] is authorized to designate as instruments of international traffic … such additional articles or classes of articles as he shall find should be so designated.” See 19 C.F.R. § 10.41a(a). To qualify for entry-free and duty-free treatment as IITs under the aforementioned statutory and regulatory authority, the article must be a substantial container or holder. As stated above, CBP is authorized to designate as an IIT such additional articles not specifically noted in 19 C.F.R. § 10.41a(a)(1). Historically, CBP has held in its published decisions that in order to qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), an article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See HQ H016491 (Oct. 1, 2007); HQ 114150 (Dec. 12, 1997); HQ 107545 (May 7, 1985); Treas. Dec. 71-159, Cust. B. & Dec. 296 (June 18, 1971); 99 Treas. Dec. 533, No. 56247 (Aug. 26, 1964). In addition, CBP has previously rule

Pursuant to 19 U.S.C. § 1322(a), IITs shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. The relevant Customs and Border Protection (CBP) regulations implementing that statute are found at 19 C.F.R. § 10.41a(a)(1) which provides in pertinent part:(a) Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics, arriving (whether loaded or empty) in use or to be used in the shipment of merchandise in international traffic are hereby designated as “instruments of international traffic” [. . .] The Commissioner of Customs [now CBP] is authorized to designate as instruments of international traffic […] such additional articles or classes of articles as he shall find should be so designated. …(d)  If an instrument of foreign origin, or of United States origin which has been increased in value or improved in condition by a process of manufacture or other means while abroad, is released under this section and is subsequently diverted to point-to-point local traffic within the United States, or is otherwise withdrawn in the United States from its use as an instrument of international traffic, it becomes subject to entry and the payment of any applicable duties. An instrument of United States origin which has not been increased in value or improved in condition by a process of manufacture or other means while abroad and which is released under this section shall not be subject to entry or the payment of duty if it is so diverted or otherwise withdrawn.19 C.F.R. § 10.41a(a)(1)(emphasis added).Such instruments may be released without entry or the payment of duty, subject to the provisions of this section. Subheading 9803.00.50, HTSUS provides for the duty-free treatment of:Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing m