CLA-2 CO:R:C:M 955769 DWS
District Director
U.S. Customs Service
127 North Water Street, Room N/A
Ogdensburg, NY 13669
RE: IA 8/94; Spent Copper Anodes; Copper Cathodes; Unrefined
Copper; Section XV, Note 6(a); GRI 3(a); 7402.00.00
Dear District Director:
This is in response to your memorandum of January 31, 1994,
relating to a request for internal advice initiated by counsel on
behalf of Noranda Minerals, Inc., concerning the classification of
spent copper anodes under the Harmonized Tariff Schedule of the
United States (HTSUS). This determination is necessary to resolve
whether Noranda is entitled to benefits it claimed under the U.S.-
Canada Free-Trade Agreement. In preparing this ruling, we received
several submissions and met with counsel and representatives of
Noranda on April 26, 1994.
FACTS:
The merchandise consists of spent copper anodes, imported into
Canada from a country other than the U.S. They are referred to as
"spent" because, in their existing condition, they cannot be used
for further refining because they have been used to a degree which
renders them unsuitable for that purpose. In Canada, the spent
anodes are remelted and cast into anode molds in a casting furnace,
thereby creating new anodes. After this process, the new anodes
are suspended by their lugs in a chemical acid bath that also
contains thin "starting sheets" of refined copper. An electric
current is sent from the anode to the starting sheet through the
chemical bath to begin the electrolytic refining process. During
this process, copper ions are stripped from the anode and plated
onto the starting sheet to form a pure refined copper cathode.
After enough pure copper has plated onto the cathode so that it has
reached the desired thickness and weight, the cathode is removed
and replaced with another starting sheet. Once this second cathode
reaches the desired weight, both it and the anode are replaced and
a new cycle begun. The finished copper cathodes are then imported
into the U.S.
The subheadings under consideration are as follows:
7402.00.00: [u]nrefined copper; copper anodes for
electrolytic refining.
The general, column one rate of duty for goods classifiable
under this provision is 1 percent on the value of the
copper content.
7404.00.00: [c]opper waste and scrap.
Goods classifiable under this provision receive duty-free
treatment.
ISSUE:
Whether spent copper cathodes are classifiable under
subheading 7402.00.00, HTSUS, as unrefined copper, or under
subheading 7404.00.00, HTSUS, as copper waste and scrap.
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance
with the General Rules of Interpretation (GRI's), taken in order.
GRI 1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
Section XV, note 6(a), HTSUS, states that:
[i]n this section, the following expressions have the
meanings hereby assigned to them:
(a) Waste and scrap
Metal waste and scrap from the manufacture or mechanical
working of metals, and metal goods definitely not usable
as such because of breakage, cutting-up, wear or other
reasons.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive, are to
be used to determine the proper interpretation of the HTSUS. See
T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part,
Explanatory Note 74.04 (p. 1044) states that:
[t]he provisions concerning waste and scrap in the
Explanatory Note to heading 72.04 apply, mutatis mutandis,
to this heading . . .
In part, Explanatory Note 72.04 (p. 987) states that:
[w]aste and scrap is generally used for the recovery of
metal by remelting or for the manufacture of chemicals.
It is our position that the spent copper anodes are waste and
scrap as defined above. They are metal goods which are no longer
effectively and commercially usable as anodes because of wear
(i.e., most of the copper ions have been removed). Accordingly,
they are remelted for the recovery of metal and recast before they
can be reused as new anodes. Because the spent copper anodes meet
the provisions of section XV, note 6(a), HTSUS, we find that they
are classifiable under subheading 7404.00.00, HTSUS. As they are
waste and scrap, they cannot be described as the anodes
classifiable under subheading 7402.00.00, HTSUS. We note that,
although not legally dispositive, in a letter to Noranda Sales
Corporation Ltd., Revenue Canada (Canadian Customs) agreed with
this position.
Counsel claims that because the spent copper anodes are
described under subheading 7402.00.00, HTSUS, as unrefined copper,
and under subheading 7404.00.00, HTSUS, as copper waste
and scrap, GRI 3(a) must be consulted. It states that:
[w]hen, by application of 2(b) or for any other reason,
goods are, prima facie, classifiable under two or more
headings, classification shall be effected as follows:
(a) The heading which provides the most specific description
shall be preferred to headings providing a more
general description. However, when two or more headings
each refer to a part only of the materials or
substances contained in mixed or composite goods or to
part only of the items in a set put up for retail sale,
those headings are to be regarded as equally specific in
relation to those goods, even if one of them gives a
more complete or precise description of the goods.
We disagree with counsel's assessment. In counsel's original
submission, it is stated that "[t]he copper industry has a
longstanding, clear and uniform view of spent anode as a form of
anode . . . " Therefore, if we were to classify the spent anodes
under subheading 7402.00.00, HTSUS, it would have to be as copper
anodes, and not as unrefined copper, because counsel states the
copper industry regards spent anodes as a form of copper anode.
Consequently, for classification purposes, because the spent anodes
cannot be classifiable as unrefined copper and are not described as copper anodes, GRI 3(a) is inapplicable
because subheading 7404.00.00, HTSUS, is the only provision
describing the merchandise.
Therefore, by authority of GRI 1, the spent copper anodes are
classifiable under subheading 7404.00.00, HTSUS.
HOLDING:
The spent copper anodes are classifiable under subheading
7404.00.00, HTSUS, as copper waste and scrap.
This decision should be mailed by your office to the internal
advice requester no later than 60 days from the date of this
letter. On that date, the Office of Regulations and Rulings will
take steps to make the decision available to Customs
personnel via the Customs Ruling Module in ACS and the public via
the Diskette Subscription Service, Lexis, Freedom of Information
Act, and other public access channels.
Sincerely,
John Durant, Director