H345809

H345809 May 30, 2025 OT:RR:BSTC:CCR H345809 MF CATEGORY: Carriers Lisa Murrin Senior Consultant Expeditors Tradewin, LLC 795 Jubilee Drive Peabody, MA 01960 RE: Instruments of International Traffic; 19 U.S.C. § 1332(a); § 10.41a(a)(1), Goodpack USA, Inc.; Returnable Pallets Dear Ms. Murrin: This is in response to your February 12, 2025, ruling request on behalf of Goodpack USA, Inc. (“Goodpack”). In your request you inquire whether collapsible and stackable steel pallet cubes qualify as “instruments of international traffic” (“IIT”) within the meaning of 19 U.S.C. § 1332(a). Our decision follows. FACTS: The following facts are from your ruling request and supplements thereto. The subject items are various models of a collapsible and stackable steel pallet cube. There are four models of this item: RP3, RP4, RP4T, and RP5. The differences between these items are limited to dimensions, tare weight, and maximum allowable payload. These subject items are comprised of steel collapsible corner posts and a metal pallet foundation. The posts are designed to lock into place and form an open cube. The subject pallets are designed to be multimodal, collapsible, and reusable and are intended for transporting bagged products such as pellets, powders, grains, etc. The subject pallets are made of galvanized steel. The RP3 model is 1150mm x 1125mm x 1100mm with its corner posts erect and 1150mm x 1125mm x 150mm when collapsed. The RP4 is 1390 mm x 1110mm x 1100mm with its corner posts erect and 1390 mm x 1110mm x 150mm when collapsed. The RP4T model is 1390 mm x 1110mm x 1275mm with its corner posts erect and 1390 mm x 1110mm x 150mm when collapsed. The RP5 model is 1465mm x 1150mm x 1110mm with its corner posts erect 1 and 1465mm x 1150mm x 150mm when collapsed. The subject pallets are depicted below, both collapsed and assembled: 2 There are currently more than four million Goodpack reuseable pallets and containers in circulation. Goodpack plans to provide the subject pallets to its customers on a “for hire,” pay- per-use basis. Goodpack will deliver the subject items to a location specified by the customer. Upon the customer’s completion of their use of the subject pallet, Goodpack’s customers have the option of continuing to use the pallets, transferring them to a new location and/or user, or submitting a return request to Goodpack. Once returned to Goodpack the pallets undergo cleaning and inspection before their next usage. In response to our inquiry, Goodpack advised that the pallets are expected to have a multidecade lifespan. Goodpack also noted that while usage depends on the products vertical supply chain, the subject pallets could sustain between 60-120 use cycles. ISSUE: 1. Whether the subject pallet cubes qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1). LAW AND ANALYSIS: Per 19 C.F.R. § 141.4(a), “all merchandise imported into the United States is required to be entered, unless specifically excepted.” The four exceptions to the requirement of entry are listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic. See 19 C.F.R. § 141.4(b)(3). Subheading 9803.00.0, 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 Treasury1 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: 1 Customs revenue functions have been delegated to the Secretary of Homeland Security by the Secretary of Treasury, with exceptions herein not applicable, under the authority of the Homeland Security Act of 2002, Pub. L. 107-296. See Treas. Dep't Order 100-16 (May 15, 2003). 3 (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 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 CBP regulations implementing that statute are found at 19 C.F.R. § 10.41a(a)(1) which provides in pertinent part: 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. 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. 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). 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 used as a container or holder must be: (1) substantial, (2) suitable for and capable of repeated use, and (3) used in significant numbers in international traffic. See HQ H291037 (Jan. 9, 2018); 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).2 Pursuant to 19 C.F.R. § 10.41a(a)(1), pallets are per se IITs. In HQ H119060 (Nov. 9, 2020), CBP held that “pallets have already been designated as an instrument of international traffic by regulation. See 19 C.F.R. § 10.41a(a).” HQ H119060 (Nov. 9, 2010); see also HQ 2 The requirement that an article be “substantial” is not only a threshold requirement under 9803.00.50, but also a requirement for an article to be an instrument of international traffic pursuant to CBP decisions. The origin for the criterion found in CBP decisions that an article be “substantial” is found in Schedule 8, Item 808.00 of the Tariff Schedule of the United States (1963)(TSUS), the predecessor provision to 9803.00.50, HTSUS. Likewise, the criterion that an article be “suitable for and capable of repeated use” is found in Schedule 8, Item 808.00, TSUS, Headnote 6(b)(ii)(stating that the article must be capable of “reuse”). Although the requirement that an article be capable of reuse is no longer under subheading 9803.00.50, HTSUS (the successor provision to Item 808.00, TSUS), to receive duty-free treatment thereunder nevertheless, “reuse” is still required, pursuant to CBP decisions, for an article to be considered an instrument of international traffic. 4 H252710 (May 19, 2014) (CBP held “the subject plastic pallets are IITs Pallets have already been designated as an instrument of international traffic by regulation. See 19 C.F.R. § 10.41a(a). It is noteworthy that the subject merchandise c

Per 19 C.F.R. § 141.4(a), “all merchandise imported into the United States is required to be entered, unless specifically excepted.” The four exceptions to the requirement of entry are listed under 19 C.F.R. § 141.4(b), one of which is instruments of international traffic. See 19 C.F.R. § 141.4(b)(3). Subheading 9803.00.0, 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 Treasury1 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: 1 Customs revenue functions have been delegated to the Secretary of Homeland Security by the Secretary of Treasury, with exceptions herein not applicable, under the authority of the Homeland Security Act of 2002, Pub. L. 107-296. See Treas. Dep't Order 100-16 (May 15, 2003). 3 

 (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 U.S.C. § 1322(a), IITs shall be excepted from the application of the Customs laws to the extent