HQ 112260: Instruments of International Traffic; Containers; 19 U.S.C. 1322

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 112260

                        September 4, 1992

BOR-7-07-CO:R:IT:C 112260 MLR

CATEGORY:  Carriers

James D. Harris
Manager Customs Services
CP Rail System
P.O. Box 6042, Station A
Montreal, Quebec, Canada H3C 3E4

RE:  Instruments of International Traffic; Containers; 
     19 U.S.C. 1322

Dear Mr. Harris:

     This is reference to your facsimile dated May 28, 1992 (your
file no. F-620.06-G), requesting a ruling regarding the use of
containers.

FACTS:

     The proposed movement of the Canadian-based containers in
question is as follows:  Romar Transportation System (Romar), a
division of Trailer Train, will handle the drayage of empty
containers from Montreal, Quebec, Canada, to Massena, New York. 
At Massena, the containers will be loaded with aluminum ingots
and returned to Montreal, where Cast Shipping Lines will move the
containers by rail to Chicago, Illinois, through the Port of
Detroit.  On arrival in Chicago, Romar will handle the drayage of
the containers to Milwaukee, Wisconsin, where the aluminum ingots
are unloaded.  

     Romar will return the empty containers to Chicago, where
export cargo is loaded.  The containers will again be moved by
Cast Shipping Lines by rail from Chicago, to Canada.  

ISSUE:

     Whether the proposed movement of containers as described
above constitutes their use as instruments of international
traffic in compliance with section 10.41a(f), Customs Regulations
{19 CFR 10.41a(f)}.


LAW AND ANALYSIS:

     Section 141.4, Customs Regulations (19 CFR 141.4), provides
that entry as required by title 19, United States Code, section
1484(a) {19 U.S.C. 1484(a)}, shall be made of every importation
whether free or dutiable and regardless of value, except for 
intangibles and articles specifically exempted by law or
regulations from the requirements for entry.  Since the
containers in question are not within the definition of
intangibles as shown in General Note 4, Harmonized Tariff
Schedule of the United States Annotated (HTSUSA; 19 U.S.C. 1202,
as amended), they are subject to entry and payment of any
applicable duty if not specifically exempted by law and
regulations.

     Instruments of international traffic (IIT) may be entered
without entry and payment of duty under the provisions of 19
U.S.C. 1322 which provides in pertinent part that:

          Vehicles 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
          authority delegated to the Secretary by this subsection
          shall not extend to communications satellites and
          components and parts thereof.

     In regard to the use of containers as IIT, regulations have
been promulgated by Customs to administer section 1322, and they
do provide some latitude in the use of designated instruments of
international traffic.  Section 10.41a(f), Customs Regulations,
provides that the following are permitted:

     1.  The use of an IIT container at intervening points while
     it is in use between its port of arrival and the destination
     point for its imported cargo.

     2.  The use of an IIT container at intervening points
     between the point of destination for its imported cargo and
     a point where export cargo is to be loaded, or from there to
     its departure port.

     3.  The use of an IIT container at intervening points, which
     arrived in the U.S. empty and is being taken to the point
     where export cargo is to be loaded or from there to its port
     of departure from the U.S.

     All three of these uses are allowed only on condition that
they be reasonably direct and incidental to the efficient and
economical utilization of the IIT container in the course of its
use in international traffic.

     Upon reviewing the proposal under consideration, the
containers in question arrive empty in the United States at
Massena where they are loaded.  They are then transported from
their port of arrival (Massena) to Milwaukee, Wisconsin, via
Canada.  In view of the fact that this movement between Massena
and Milwaukee, via Canada, is not "incidental to the efficient
and economical utilization of the instrument in the course of its
use in international traffic" (in that the containers are
returned back to Montreal) the containers have not met the
criteria set forth in section 10.41a(f), Customs Regulations and
are considered to have been diverted to unpermitted point-to
point local traffic in the United States.

HOLDING:

     The proposed movement of Canadian-based containers which
enter the United States empty at Massena, New York, where they
are subsequently loaded, transported back to Canada, then shipped
via rail to Chicago, Illinois, for transport by truck to
Milwaukee, Wisconsin, are engaged in local traffic in violation
of section 10.41a(f), Customs Regulations.

                                   Sincerely,




                                   B. James Fritz
                                   Chief