CLA–2 OT:RR:CTF:TCM H197758
Mr. Mark Lunn
Arent Fox, LLP
1050 Connecticut Ave. NW
Washington, DC 20036-5339
RE: Ruling Request; Classification of Hot Rolled Carbon Steel Coils
Dear Mr. Lunn:
This is in response to your ruling request, dated November 1, 2011, filed on behalf of Severstal OAO, regarding the classification of certain hot rolled carbon steel coils imported from Russia under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
On November 1, 2011, you filed an amended request for a binding ruling concerning the classification of certain hot rolled carbon steel coils. This was an amendment to your original request, filed on September 2, 2011.
The merchandise at issue is hot rolled carbon steel in the form of coils or successively superimposed layers, not plated or coated, and imported from Russia in various thicknesses. Data submitted with your requests indicate that the merchandise is imported with a width of 1219 mm, and in thicknesses of 4.50 mm, 6.10 mm, 9.27 mm, and 12.19 mm. The merchandise is sold as American Society of Testing and Materials (ASTM) A-36 grade structural steel. The carbon content of the steel, according to the mill test certificates you submitted, is less than 2 percent by weight. Furthermore, mill test certificates indicate that the yield point of the coils ranges from 317 MPa to 388 MPa.
In general, the steel at issue is manufactured by first adding iron and certain other additives to a blast furnace. The entire contents of a blast furnace are referred to as one “heat.” It is possible to run several heats during one day of production. The heat is then poured into a crucible, and from there, the steel is hot-rolled into flat cross sections. The heat is then subdivided into different “lots.” Lots are a group of coils of the same thickness manufactured sequentially. Any number of coils may be produced in a lot. One heat produces between 15 and 20 coils.
You supplied data from one “heat” as an example, shown below:
THICKNESS (mm)
WIDTH (mm)
GRADE
LOT No.
PLACE
COIL WEIGHT (mt)
YIELD POINT (MPa)
4.50
1219
A36
63330
001
18.82
361/361
4.50
1219
A36
63330
002
18.94
361/361
6.10
1219
A36
63373
001
18.86
317/319
6.10
1219
A36
63373
002
18.65
317/319
9.27
1219
A36
63374
001
19.1
346/346
9.27
1219
A36
63374
002
19.05
346/346
9.27
1219
A36
63374
003
18.12
346/346
12.19
1219
A36
63375
001
18.96
320/320
12.19
1219
A36
63375
002
19.04
320/320
12.19
1219
A36
63375
003
18.98
320/320
6.10
1219
A36
63417
001
18.44
338/333
6.10
1219
A36
63417
002
18.9
338/333
6.10
1219
A36
63417
003
18.88
338/333
6.10
1219
A36
63417
004
19.05
338/333
6.10
1219
A36
63417
005
19.03
338/333
6.10
1219
A36
63640
001
18.85
356/356
6.10
1219
A36
63640
002
19.03
356/356
6.10
1219
A36
63640
003
18.99
356/356
The sample heat of 18 coils consists of 6 lots of 4 different thicknesses. The coils in each lot have the same yield points, but the yield points vary amongst the lots in the same heat. Also, coil weight is inconsistent within the lot, but the coil widths and grades are constant across the heat.
ISSUE:
What is the proper classification of the instant products 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 2012 HTSUS provisions at issue are as follows:
7208 Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated:
Other, in coils, not further worked than hot-rolled:
7208.36.00 Of a thickness exceeding 10mm
7208.36.00.30 High-strength steel
7208.36.00.60 Other
-----------------------------------
7208.37.00 Of a thickness of 4.75 mm or more but not exceeding 10 mm
7208.37.00.30 High-strength steel
7208.37.00.60 Other
-----------------------------------
7208.38.00 Of a thickness of 3 mm or more but less than 4.75 mm
7208.38.00.15 High-strength steel
Other:
7208.38.00.90 Other
Note 1 to Chapter 72, HTSUS, states:
In this chapter and, in the case of notes (d), (e) and (f) below throughout the tariff schedule, the following expressions have the meanings hereby assigned to them:
* * *
(d) Steel
Ferrous materials other than those of heading 7203 which (with the exception of certain types produced in the form of castings) are usefully malleable and which contain by weight 2 percent or less of carbon. However, chromium steels may contain higher proportions of carbon.
* * *
(k) Flat-rolled products
Rolled products of solid rectangular (other than square) cross section, which do not conform to the definition at (ij) above in the form of:
- coils of successively superimposed layers, or
* * *
Additional U.S. Note 1 to Chapter 72, HTSUS, states, in pertinent part:
For the purposes of the tariff schedule the following expressions have the meanings hereby assigned to them:
(a) High-strength steel
Flat-rolled products … of a thickness of 3 mm or more and having a minimum yield point of 355 MPa.
* * *
There is no dispute that the instant merchandise is classified under heading 7208, HTSUS. It consists of flat, hot-rolled carbon steel, which conforms to ASTM A1011/A1011M SS Grade 36. According to the mill certificates, it meets the definition of “steel” contained in Note 1(d) to Chapter 72, HTSUS, in that it is usefully malleable ferrous material containing less than 2 percent by weight of carbon. Furthermore, it meets the definition of “flat-rolled products” contained in Note 1(k) to Chapter 72, HTSUS, in that it has a rectangular cross-section, with a width greater than 600mm, and is imported in the form of coils of successively superimposed layers. It is not further worked other than hot-rolled.
There is also no dispute as to the classification of the instant merchandise at the 8-digit subheading level. You have identified four different thicknesses of imported merchandise. For merchandise with a thickness of 4.50 mm, the proper subheading is 7208.38.00, HTSUS, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness of 3 mm or more but less than 4.75 mm”. For merchandise with thicknesses of 6.10 mm or 9.27 mm, the proper subheading is 7208.37.00, HTSUS, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness of 4.75 mm or more but not exceeding 10 mm”. For merchandise with a thickness of 12.19 mm, the proper subheading is 7208.36.00, HTSUS, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness exceeding 10mm”.
The dispute comes at the 10-digit subheading level, specifically whether the instant merchandise is considered “high-strength steel” within the definition given in Additional U.S. Note 1(a) to Chapter 72, HTSUS (annotated), or whether it is considered “other.” As a result, GRI 6 applies.
GRI 6 states:
For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
You assert that the instant merchandise is manufactured to meet ASTM A1011/A1011M, SS Grade 36 (250) Type 1 or Type 2 grade structural steel. Steel of this grade must have a minimum yield point of 250 MPa.
Each coil consists of a long strip of steel, and weighs between 37,000 and 44,000 pounds (17 to 20 metric tons (mt)). During one “heat” (the contents of a blast furnace), Severstal OAO can manufacture between 15 and 20 coils. Several heats may be run in any given day.
The relevant ASTM standard states that each coil may be tested only at the end of the strip, and at no other location. Furthermore, with regard to how often the steel must be tested during production, the relevant ASTM standard states:
Number of Tests—Two tension tests shall be made from each heat or from each 50 tons (45 000 kg). When the amount of finished material from a heat is less than 50 tons (45 000 kg), one tension test shall be made. When material rolled from one heat differs 0.050 in. (1.27 mm) or more in thickness, one tension test shall be made from the thickest and thinnest material regardless of the weight represented.
See ASTM A1011/1011M-10, para. 8.2.2.2.
The data you submitted shows both how often the material is tested, and the variation in the yield point results during a given production run. For example, the five coils in Lot No. 63417 are certified based on test data from two of those coils, both of which had a yield point well over the minimum 250 MPa requirement. The mill certificates for all five coils use these data points, even though three of the coils are never tested. This test data is meant to represent all the coils from the lot, no matter how many coils are actually in the lot. The greatest variance in yield points between samples in the same lot is 5 MPa, in the data you provided. This represents a low variation amongst samples in the same lot.
Section 141.89, CBP Regulations (19 C.F.R. §141.89), lists certain additional information that is required on invoices at the time of entry. With regard to the instant merchandise, the regulation states that:
[I]ron or steel classifiable in Chapter 72 or headings 7301 to 7307, HTSUS (T.D. 53092, 55977) -- Statement of the percentages by weight or carbon and any metallic elements contained in the articles, in the form of a mill analysis or mill test certificate.
See 19 C.F.R. §141.89(a). The importer provides mill test certificates at the time of entry, in accordance with CBP regulations. These mill certificates also indicate the yield strength of the coils associated with that lot.
It is a well established principle that goods must be classified in their condition as imported. Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994). Each coil imported to the United States is an article of commerce. See, e.g., New York Ruling Letter (NY) N032816, dated July 22, 2008; NY N020671, dated December 21, 2007; and NY G81590, dated September 5, 2000. For each coil, a mill certificate is presented to CBP, in accordance with 19 C.F.R. §141.89(a). Therefore, each coil is presented with yield point data that is taken to be representative of the entire coil.
The definition of “high strength steel” contained in Additional U.S. Note 1(a) to Chapter 72, HTSUS, states that the term applies to “Flat-rolled products … of a thickness of 3 mm or more and having a minimum yield point of 355 MPa.” All of the instant products are flat-rolled products with a thickness greater than 3 mm. Each coil is presented with a mill certificate, and that certificate includes yield point data applicable to the entire coil. Therefore, for each coil whose certificate shows that the yield point is 355 MPa or greater, that coil is properly classified as “high strength steel” within the meaning of Additional U.S. Note 1(a) to Chapter 72, HTSUS. In the example given in the chart above, the seven (7) coils of Lot Nos. 63330 and 63640 would be properly classified as “high strength steel,” because the mill certificates show that the yield points of the lots are 361 MPa and 356 MPa, respectively.
You state that the instant merchandise falls within the purview of the Suspension of Antidumping Duty Investigation: Hot Rolled Flat-Rolled Carbon-Quality Steel Products From the Russian Federation (Suspension Agreement A-821-809), issued by the International Trade Administration (ITA). See 64 Fed. Reg. 38642, dated July 19, 1999; See also 76 Fed. Reg. 35400, dated July 17, 2011; CBP Case A-462-809, dated January 31, 2000. Suspension Agreement A-821-809 requires the presentation of “an export license as a condition for entry into the United States of hot-rolled steel covered by this agreement”. See 64 Fed. Reg. 38644-45. Furthermore, the Suspension Agreement states that: “Export Licenses must contain, for each grade of Hot-Rolled Steel covered by the license, the quantity in metric tons, dimensions (guage, width, and length (in the case of coils, length, if appropriate)) unit price, and F.O.B. sales value.” See 64 Fed. Reg. 38645. Documents submitted by the importer show that the 10-digit HTSUS code is included on the export license.
The merchandise in question may be subject to antidumping duties or countervailing duties. We note that the International Trade Administration is not necessarily bound by a country of origin or classification determination issued by CBP, with regard to the scope of antidumping orders or countervailing duties. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection. You can contact them at http://www.trade.gov/ia/ (click on “Contact Us”). For your information, you can view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and countervailing duty investigations”), and you can search AD/CVD deposit and liquidation messages using ACE, the system of record for AD/CVD messages, or the AD/CVD Search tool at .
HOLDING:
By application of GRI 1, the instant merchandise is properly classified under heading 7208, HTSUS. Furthermore, the merchandise is classified at the 10-digit level, by operation of GRI 6, in accordance with both its thickness and with the yield point data submitted by the importer, as described below:
For merchandise with a thickness of 4.50mm, where the mill test certificate indicates that the yield point of the coil is below 355 MPa, the proper subheading is 7208.38.0090, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness of 3 mm or more but less than 4.75 mm: Other: Other”.
For merchandise with a thickness of 4.50mm, where the mill test certificate indicates that the yield point of the coil is at or above 355 MPa, the proper subheading is 7208.38.0015, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness of 3 mm or more but less than 4.75 mm: High-strength steel”.
For merchandise with thicknesses of 6.10mm or 9.27mm, where the mill test certificate indicates that the yield point of the coil is below 355 MPa, the proper subheading is 7208.37.0060, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness of 4.75 mm or more but not exceeding 10 mm: Other”.
For merchandise with thicknesses of 6.10mm or 9.27mm, where the mill test certificate indicates that the yield point of the coil is at or above 355 MPa, the proper subheading is 7208.37.0030, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness of 4.75 mm or more but not exceeding 10 mm: High-strength steel”.
For merchandise with a thickness of 12.19mm, where the mill test certificate indicates that the yield point of the coil is below 355 MPa, the proper subheading is 7208.36.0060, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness exceeding 10mm: Other”.
For merchandise with a thickness of 12.19mm, where the mill test certificate indicates that the yield point of the coil is at or above 355 MPa, the proper subheading is 7208.36.0030, HTSUSA, which provides for “Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated: Other, in coils, not further worked than hot-rolled: Of a thickness exceeding 10mm: High-strength steel”.
The 2012 general, column one rate of duty for each of the subheadings listed above is free. Duty rates are provided for your convenience, and are subject to change.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Ieva O’Rourke, Chief
Tariff Classification and Marking Branch