CLA–2 OT:RR:CTF:TCM H161855 AMM
Mr. Ritchie Thomas
Squire, Sanders & Dempsey, LLP
1201 Pennsylvania Ave., NW, Suite 500
Washington, DC 20004
RE: Revocation of New York Ruling Letter N117455; classification of wetted aluminum powder
Dear Mr. Thomas,
This is in response to your request for reconsideration, dated April 15, 2011, made on behalf of your client, Ferro Corporation, of New York Ruling Letter (NY) N117455, dated October 5, 2010, which pertains to the classification of wetted aluminum powder, under the Harmonized Tariff Schedule of the United States (HTSUS). In reaching our decision, we have also taken into consideration your original submission, dated August 2, 2010, and a sample provided for testing. We have reviewed NY N117455 and found it to be incorrect. Accordingly, for the reasons set forth below, we are revoking that ruling.
Pursuant to section 625(c), Tariff Act of 1930, (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of treatment relating to the tariff classification of wetted aluminum powder was published on February 27, 2013, in the Customs Bulletin, Volume 47, Number 10. No comments were received in connection to this proposal.
FACTS:
In NY 117455, CBP described the merchandise as follows:
The product, described as a wetted spherical aluminum powder, consists of aluminum powder and a solvent. As indicated in your ruling request, the product can be used in paints as a metallic pigment, utilized in rocket fuel and in electronics.
* * *
The subject merchandise is a formulated ingredient to be further processed to create a conductive paste in the manufacture of photovoltaric solar panels. The aluminum powder mixture, in the condition as imported, is a chemical mixture of a metallic powder and a nonaromatic organic compound.
* * *
The sample is a lumpy gray powder composed of over 80% aluminum, other base metals, and a non-aromatic organic solvent used as a wetting agent. CBP Laboratory Report No. NY20111397, dated September 19, 2011, states that at least ninety (90) percent or more by weight of the instant product passed through a sieve having a mesh aperture of 1mm. A photo of the sample is provided below:
ISSUE:
What is the proper classification of the wetted aluminum powder under the HTSUS?
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied.
The 2013 HTSUS provisions under consideration are:
3212 Pigments (including metallic powders and flakes) dispersed in nonaqueous media, in liquid or paste form, of a kind used in the manufacture of paints (including enamels); stamping foils; dyes and other coloring matter put up in forms or packings for retail sale:
3212.90.00 Other
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3824 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included:
3824.90 Other:
Other:
Other:
Other:
3824.90.70 Mixtures of dibromo neopentyl glycol; Polydibromophenylene oxide; Tetrabromobisphenol-A-carbonate oligomers; and Electroplating chemical and electroless plating solutions and other materials for printed circuit boards, plastics and metal finishings
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3824.90.92 Other
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7603 Aluminum powders and flakes:
7603.10.00 Powders of non-lamellar structure
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7616 Other articles of aluminum:
Other:
7616.99 Other:
7616.99.50 Other
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8541 Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes; mounted piezoelectric crystals; parts thereof:
8541.90.00 Parts
Note 1 to Section XV (which covers Chapter 76), HTSUS, states, in pertinent part: “This section does not cover: (a) Prepared paints, inks or other products with a basis of metallic flakes or powder (headings 3207 to 3210, 3212, 3213 or 3215); …”
Note 3 to Section XV, HTSUS, states, in pertinent part: “Throughout the schedule, the expression ‘base metals’ means: … aluminum …”.
Note 5 to Section XV, HTSUS, states, in pertinent part:
Classification of alloys (other than ferroalloys and master alloys as defined in chapters 72 and 74):
* * *
(b) An alloy composed of base metals of this section and of elements not falling within this section is to be treated as an alloy of base metals of this section if the total weight of such metals equals or exceeds the total weight of the other elements present.
* * *
Note 6 to Section XV, HTSUS, states: “Unless the context otherwise requires, any reference in the tariff schedule to a base metal includes a reference to alloys which, by virtue of note 5 above, are to be classified as alloys of that metal.”
Note 7 to Section XV, HTSUS, states, in pertinent part:
Classification of composite articles:
Except where the headings otherwise require, articles of base metal (including articles of mixed materials treated as articles of base metal under the General Rules of Interpretation) containing two or more base metals are to be treated as articles of the base metal predominating by weight over each of the other metals. For this purpose:
* * *
Note 8 to Section XV, HTSUS, states, in pertinent part:
In this section, the following expressions have the meanings hereby assigned to them:
* * *
(b) Powders
Products of which 90 percent or more by weight passes through a sieve having a mesh aperture of 1 mm.
* * *
Note 8 to Chapter 85, HTSUS, states, in pertinent part: “For the purposes of headings 8541 and 8542: … For the classification of the articles defined in this note, headings 8541 and 8542 shall take precedence over any other heading in the Nomenclature …”.
The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. It is CBP’s practice to consult, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 32.12 states, in pertinent part:
(A) PIGMENTS (INCLUDING METALLIC POWDERS AND FLAKES) DISPERSED IN NON-AQUEOUS MEDIA, IN LIQUID OR PASTE FORM OF A KIND USED IN THE MANUFACTURE OF PAINTS (INCLUDING ENAMELS)
These are concentrated dispersions of pigments (including aluminium or other metal powders and flakes) in a non-aqueous medium (e.g., drying oils, white spirit, gum, wood or sulphate turpentine or varnish), in liquid or paste form, of a kind used in the manufacture of paints or enamels.
* * *
EN 38.24 states, in pertinent part:
This heading includes:
* * *
(B) CHEMICAL PRODUCTS AND CHEMICAL OR OTHER PREPARATIONS
* * *
The chemical or other preparations are either mixtures (of which emulsions and dispersions are special forms) or occasionally solutions. Aqueous solutions of the chemical products of Chapter 28 or 29 remain classified within those Chapters, but solutions of these products in solvents other than water are, apart from a few exceptions, excluded therefrom and accordingly fall to be treated as preparations of this heading.
* * *
The General EN to Section XV states, in pertinent part:
(B) ARTICLES OF BASE METALS
In accordance with Section Note 7, base metal articles containing two or more base metals are classified as articles of that metal which predominates by weight over each of the other metals, except where the headings otherwise require (e.g., copper-headed iron or steel nails are classified in heading 74.15 even if the copper is not the major constituent). The same rule applies to articles made partly of non-metals, provided that, under the General Interpretative Rules, the base metal gives them their essential character.
* * *
EN 76.03 states, in pertinent part:
This heading covers aluminium powders as defined in Note 8 (b) to Section XV and aluminium flakes. In general these products correspond to those of copper and the Explanatory Note to heading 74.06 therefore applies, mutatis mutandis, to this heading. Aluminium powders and flakes are, however, also used in pyrotechnics, as heat generators (e.g., in the thermit process), to protect other metals from corrosion (e.g., calorising, metallic cementation), in rocket propellants and in the preparation of special cements.
The heading does not cover:
(a) Powders or flakes, prepared as colours, paints or the like (e.g., made up with other colouring matter or put up as suspensions, dispersions or pastes with a binder or solvent) (Chapter 32).
* * *
EN 76.16 states, in pertinent part: “This heading covers all articles of aluminum other than those covered by the preceding headings of this Chapter, or by Note 1 to Section XV, or articles specified or included in Chapter 82 or 83, or more specifically covered elsewhere in the Nomenclature.”
In your original ruling request, dated August 2, 2010, you argued that the instant product may be properly classified under heading 3212, HTSUS, which provides for “Pigments ...”. You also argued for classification under heading 8541, HTSUS, which provides for “[P]hotovoltaic cells …; parts thereof”, and under heading 3824, HTSUS, specifically under subheading 3824.90.70, HTSUS, which provides for “[C]hemical products and preparations of the chemical or allied industries … not elsewhere specified or included: Other: Other: Other: Other: [O]ther materials for printed circuit boards …”. In NY N117455, CBP classified the instant product under heading 3824, HTSUS, specifically under heading 3824.90.92, HTSUS, which provides for “[C]hemical products and preparations of the chemical or allied industries … not elsewhere specified or included: Other: Other: Other: Other: Other”. In your request for reconsideration, dated April 15, 2011, you argued that the instant product is properly classified under heading 7616, HTSUS, which provides for “Other articles of aluminum”. CBP has also considered whether the articles are properly classified under heading 7603, HTSUS, as “Aluminum powders and flakes”.
Heading 8541, HTSUS, takes precedence over all other headings under consideration. See Note 8 to Chapter 85, HTSUS. Inasmuch as articles of heading 3212, HTSUS, are excluded from Section XV, HTSUS, we consider it before headings of Section XV, HTSUS, namely those in Chapter 76, HTSUS. See Note 1(a) to Section XV, HTSUS; EN(a) to heading 76.03. Heading 7603, HTSUS will be considered next, followed by heading 7616, HTSUS. See EN 76.16. Finally, we will consider heading 3824, HTSUS, if the instant merchandise is not elsewhere specified or included.
You assert that the instant product is used as an ingredient for a conductive paste used in the manufacture of photovoltaic solar panels, and therefore a “part thereof” under heading 8541, HTSUS. Even assuming (without admitting) that conductive paste is a part of a solar panel, the instant product is not a paste in its condition as imported and cannot be used for this application. It must first be mixed with other substances to create the conductive paste. Thus, classification in heading 8541, HTSUS, as “[P]hotosensitive semiconductor devices …; parts thereof”, is not possible.
As for heading 3212, HTSUS, the product is not “dispersed in nonaqueous media, in liquid or paste form” as required by the text of the heading. The instant product is described in CBP lab report NY20111397 as a “moist gray baby powder” or a “lumpy gray powder.” The photo of the sample clearly shows that the product is not a liquid or a paste. Therefore, it is not properly classified under heading 3212, HTSUS, and Note 1(a) to Section XV, HTSUS does not operate to exclude the product from Chapter 76, HTSUS.
In HQ 968287, dated September 26, 2006, CBP considered the classification of an alloy steel powder. The powder consisted 85-90% base metals (neodymium, boron, iron, cobalt, and carbon), and 10-15% of a phenolic resin identified as polyphenylene sulfide. In this ruling, CBP modified a previous ruling, HQ 961028, dated November 13, 1998, which had revoked NY A88776, dated November 18, 1996. CBP had previously classified the alloy steel powder under heading 7205, HTSUS, by operation of Note 5(b) to Section XV, HTSUS. See HQ 961028. However, in HQ 968287, CBP noted that this Note was inapplicable to the alloy steel powder, because it only applies to “An alloy composed of base metals of this section and of elements not falling within this section …” (emphasis added). See Note 5(b) to Section XV, HTSUS. The alloy steel powder contained 10-15% polyphenylene sulfide, which is not an element.
Instead, CBP found that Note 7 to Section XV, HTSUS, applied to the product. See HQ 968287. According to this note, “articles of base metal … containing two or more base metals are to be treated as articles of the base metal predominating by weight over each of the other metals[.]” See Note 7 to Section XV, HTSUS. According to the EN, “The same rule applies to articles made partly of non-metals, provided that, under the [GRIs], the base metal gives them their essential character.” See General EN(B) to Section XV. Because steel was found to predominate by weight over all the other ingredients, CBP found that the product was a “steel alloy,” containing sufficient boron and cobalt to be considered an “other alloy steel” as defined in Note 1(f) to Chapter 72, HTSUS. Furthermore, CBP affirmed the earlier finding that the product was classified as a powder, as it met the test described in Note 8(b) to Section XV, HTSUS. See HQ 968287; HQ 961028.
The instant product is similar to the product under consideration in HQ 968287. The instant product consists almost entirely of aluminum powder, but contains small quantities of other metals and an organic solvent used as a wetting agent. Because it contains an organic solvent, which is not an “element,” Note 5(b) to Section XV, HTSUS, does not apply. See HQ 968287. Instead, it is a composite article, composed of aluminum, other base metals, and the organic solvent.
According to Note 7 to Section XV, HTSUS, and EN(B) to Section XV, products containing base metals and non-metals are to be treated as articles of the base metal which predominates by weight. See HQ 968287. Because the instant product consists of more than 80% aluminum, it is to be classified as an alloy of aluminum, as the aluminum gives the product its essential character. See Note 7 to Section XV, HTSUS.
Heading 7603, HTSUS, provides for aluminum powders. Reference to “aluminum” in heading 7603, HTSUS, specifically includes alloys of aluminum. See Note 6 to Section XV, HTSUS. According to CBP lab report NY20111397, the product meets the definition of “powder” contained in Note 8(b) to Chapter 76, HTSUS. Therefore, the instant product is properly classified under heading 7603, HTSUS, by operation of GRI 1 and Notes 3, 7, and 8(a) to Section XV, HTSUS.
Furthermore, the above-identified lab report indicates that the aluminum powder has spherical structure. Therefore, the instant product is specifically classified in subheading 7603.10.00, HTSUS, which provides for “Aluminum powders and flakes: Powders of a non-lamellar structure”. The fact that it contains a non-metal ingredient does not exclude it from classification as a powder. See HQ 968287.
Because the instant product is classified under heading 7603, HTSUS, by operation of GRI 1, it cannot also be properly classified under heading 7616, HTSUS. See EN to 76.16. Likewise, the product cannot be classified under heading 3824, HTSUS, which only provides for “chemical products and preparations of the chemical or allied industries … not elsewhere specified or included”.
HOLDING:
By application of GRI 1 and Notes 3, 7, and 8(a) to Section XV, HTSUS, the wetted aluminum powder is classified under heading 7603, HTSUS, specifically under subheading 7603.10.00, HTSUS, which provides for: “Aluminum powders and flakes: Powders of a non-lamellar structure”. The general, column one rate of duty is 5% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
New York Ruling Letter N117455, dated October 5, 2010, is hereby REVOKED. In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division