HQ 112137: Eligibility of certain crawler transporters to be designated as instruments of international traffic (IIT)

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 112137

                          April 8, 1992


BOR-7-07-CO:R:IT:C 112137 MLR

CATEGORY:  Carriers

Mary Andrews
Priority Customs Brokers
5950 Beltway 8, Suite 404
Humble, TX  77396

RE:  Eligibility of certain crawler transporters to be
     designated as instruments of international traffic (IIT)

Dear Ms. Andrews:

     This is in reference to your letters dated March 18 and 31,
1992, requesting a ruling that certain crawler transporters be
designated as instruments of international traffic (IIT).


FACTS:

     Unocal intends to use two pairs of crawlers to transport two
large pressure vessels, an ammonia converter and an urea reactor.
The crawlers transporting the ammonia converter will be propelled
by a diesel engine, have a total footprint area of 440 square
feet, and together with the converter weigh 1,190,500 pounds
(lbs.).  The crawlers transporting the urea reactor are pulled by
a tractor or bulldozer, have a total footprint area of 110 square
feet, and together with the reactor weigh 438,800 lbs.

     A foreign ship carrying the subject crawlers will depart
from Houston, Texas, approximately April 15-20, 1992, and will
arrive in Kobe, Japan, May 31-June 1, 1992, and in Muroran,
Japan, June 5-7, 1992, where the pressure vessels will be laden.
Then, the ship will depart for Kenai, Alaska, June 28-July 1,
1992, where the pressure vessels will be unladen for use at the
Unocal plant.  The beach conditions at Kenai, Alaska, and the
size and weight of the pressure vessels necessitate the use of
such crawlers.  Unocal leased the subject crawlers from MARKS RMS
and plans to use them only for this particular voyage, after
which they will be returned to MARKS RMS.


ISSUE:

     Whether crawler transporters used for the shipment of
pressure vessels aboard a foreign ship may be designated as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a) and sections 10.41a and 10.41b, Customs
Regulations.


LAW AND ANALYSIS:

     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 1322(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.  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 of merchandise moving in
the foreign trade.  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).

     In Treasury Decision 82-150, it was held that barrels
shipped to Europe and planned to be used only once in
international traffic were not instruments of international
traffic.  It is our position that the burden of proof to
establish reuse is on the applicant, even though the applicant
may not be the party reusing the instrument.  The record before
us indicates that Unocal only plans to use the crawlers once;
this does not meet the reuse criteria explained above.

     Furthermore, it appears that the crawlers will not be
exported from the United States.  "Exportation" is defined in
section 101.1(k), Customs Regulations {19 CFR 101.1(k)}, as "a
severance of goods from the mass of things belonging to this
country with the intention of uniting them to the mass of things
belonging to some foreign country."  This provision explicitly
provides that "[t]he shipment of merchandise abroad with the
intention of returning it to the United States with a design to
circumvent provisions of restriction or limitation in the tariff
laws or to secure a benefit accruing to imported merchandise is
not an exportation."

     The applicant must also consider title 46, United States
Code Appendix, section 883 (46 U.S.C. app. 883, the coastwise
merchandise statute, often called the "Jones Act").  It provides,
in pertinent part, that:

          No merchandise shall be transported by water, or by
          land and water, on penalty of forfeiture of the
          merchandise (or a monetary amount up to the value
          thereof as determined by the Secretary of the Treasury,
          or the actual cost of the transportation, whichever is
          greater, to be recovered from any consignor, seller,
          owner, importer, consignee, agent or other person or
          persons so transporting or causing said merchandise to
          be transported), between points in the United States...
          embraced within the coastwise laws, either directly or
          via a foreign port, or for any part of the
          transportation, in any other vessel than a vessel
          built in and documented under the laws of the United
          States and owned by persons who are citizens of the
          United States ....

Therefore, if the provisoes of section 883 do not provide an
exception, the transportion of the crawlers from Houston, Texas,
to Kenai, Alaska, via Japan, constitutes a violation of the Jones
Act.


HOLDING:

     We find that the subject crawlers used to transport certain
pressure vessels do not meet the criteria to qualify as
instruments of international traffic within the meaning of 19
U.S.C. 1322(a), nor sections 10.41a and 10.41b, Customs
Regulations.

                                   Sincerely,




                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch