HQ 113003

January 27, 1994

BOR 7-07-4 CO:R:IT:C 113003 BEW

CATEGORY: Carriers

Mr. George C. Ballard

President

Olympic Container Corporation

11411 N.E. 124 Street

Kirkland, Washington 98034

RE: Entry of Empty Foreign Manufactured Containers as

Instruments of International Traffic; 19 U. S. C. 1322(a);

19 CFR 10.41(a); 19 CFR 113.66

Dear Mr. Ballard:

This is in reference to your letter of January 17, 1994,

concerning the release of containers which are instruments of

international traffic that are being manufactured by you in

Mexico and purchased by or leased to South Seas Steamship

Company, a U. S. company for use by carriers engaged in

international traffic.

FACTS:

You state (1) Olympic sells or leases intermodal cargo

containers that are made in Mexico to international Steamship

operators; (2) that you currently have some 50 units on lease at

your Mexican facility, and that you will be moving these units

empty to Los Angeles for South Seas through El Paso, Texas; (3)

that South Seas will load foreign bound cargo in the containers

at Los Angeles. You state that no intermediate domestic cargo

will be loaded during the trip from Mexico to Los Angeles. You

also state that Olympic plans to use its customs bond at El Paso,

Texas.

ISSUE:

Whether foreign manufactured intermodal cargo containers

which are sold and/or leased to U. S. companies to be used in

international traffic qualify for treatment as IIT when they

arrive containing merchandise and/or when they arrive empty to be

filled with merchandise to be exported foreign.

\- 2 -

LAW AND ANALYSIS:

Section 322(a), Tariff Act of 1930, as amended (19 U.S.C.

1322(a)), provides that \"\[v\]ehicles and other instruments of

international traffic (IIT), of any class specified by the

Secretary of the Treasury, shall be granted the customary

exceptions from the application of the customs laws to the extent

and subject to such terms and conditions as may be prescribed in

regulations or instructions of the Secretary of the Treasury.\"

To qualify as an \"IIT\" within the meaning of section 322(a),

Tariff Act of 1930, as amended (19 U.S.C. 1322(a)), and the

regulations issued thereunder (19 CFR 10.41a et seq.), an article

must be substantial, suitable for and capable of repeated use,

and used in significant numbers in international traffic. The

Customs Regulations issued under the authority of section 322(a)

are in section 10.41a (19 CFR 10.41a). Paragraph (a)(1) of

section 10.41a designates as IIT lift vans, cargo vans, shipping

tanks and certain other named articles and states that other

articles may be designated as IIT by the Commissioner of Customs

in decisions to be published in the weekly Customs Bulletin.

Articles qualifying for treatment as IIT are considered to

be used in international traffic when they arrive containing

merchandise and when they arrive empty to be filled with

merchandise to be exported foreign. These IIT may be released

without entry or the payment of duty, subject to the provisions

of section 10.41a.

Under the provisions of section 10.41a(c) of the Customs

Regulations (19 CFR 10.41a(c)), an IIT will be released only

after a bond has been filed on Customs Form 301 containing the

bond conditions required under section 113.66 of the Customs

Regulations (19 CFR 113.66). Questions concerning bond

requirements may be directed to William Rosoff, Entry Rulings

Branch, 202-482-7040.

HOLDING:

The Mexican manufactured intermodal cargo containers which

Olympic sells and/or leases to South Seas to be used in

international traffic qualify for treatment as instruments of

international traffic when they arrive containing merchandise

and/or when they arrive empty to be filled with merchandise to be

exported foreign.

Sincerely,

Arthur P. Schifflin

Chief

Carrier Rulings Branch