CLA-1 CO:R:C:G 085594 KWM
Mr. Charles Johnson
Powder Coatings Division
Ferro Corporation
P.O. Box 6550
4150 East 56th Street
Cleveland, Ohio 44101
RE: Reconsideration of NYRL 839783, powder coatings
Dear Mr. Johnson:
We have received your letter of September 19, 1989,
requesting reconsideration of a classification ruling under the
Harmonized Tariff Schedule of the United States (hereinafter
"HTSUSA") for "Powder Coatings". Upon careful consideration of
your submission, we have determined that the ruling in question
is correct, and we decline to revoke or modify such ruling for
the reasons set forth below.
FACTS:
In a letter dated March 28, 1989, you requested of our New
York office a binding tariff classification ruling under the
HTSUSA for "VP-188 Clear Polyester Powder Coating". A breakdown
of the component materials in VP-188 powder coating reveals that
"saturated polyester resin" constitutes over 89% of the goods.
Of the remaining components, none exceeds 6.6% (triglycidyl
isocyanurate), and most are less than 1%.
The classification ruling issued in response to your letter
classified the subject goods in HTSUSA subheading 3907.99.0050,
as an article of plastic, specifically of other polyesters. That
classification was based upon the rationale, that the polyester
resin component of the goods provided the essential character of
the goods. Your current letter, dated September 19, 1989,
questions that rationale, and requests our reconsideration of the
ruling.
ISSUE:
Is the powder coating classified in subheading 3910.99.0050,
HTSUSA? If not, what is the proper classification?
LAW AND ANALYSIS:
After considering your request of September 19, 1989, we
have determined that New York Ruling Letter (hereinafter "NYRL")
839783 correctly classifies the subject powder coating.
NYRL 839783
Classification under the HTSUSA is made in accordance with
the General Rules of Interpretation (hereinafter "GRI(s)") 1
through 5. The systematic detail of the harmonized system is
such that virtually all goods are classified by application of
GRI 1, that is, according to the terms of the headings of the
tariff schedule and any relevant Section or Chapter Notes. Then,
if GRI 1 fails to classify the goods, and if the headings and
legal notes do not otherwise require, the remaining GRIs may be
applied, taken in order.
In reviewing the eligible headings for classification of
powder coatings, we note that heading 3210, HTSUSA, may include
goods such as these. That heading reads:
3210 Other paints and varnishes (including
enamels, lacquers and distempers);
prepared water pigments of a kind used
for finishing leather.
The question is this case is whether the VP-188 polyester
powder coating is considered a "paint" within the terms of the
heading. In our opinion, it is not. NYRL 839783 stated that the
powder coating in question did not qualify as a paint because it
was not dispersed in a liquid medium. In your letter of
September 19, you dispute that finding based on a reading of the
heading terms, which do not appear to require dispersion in a
liquid medium for classification purposes. While we agree that
the heading terms do not include the terms "dispersed in a liquid
medium", we are of the opinion that goods must be in such a form
for inclusion in heading 3210, HTSUSA.
The Explanatory Notes to the Harmonized Tariff Schedule,
while not legally binding, do constitute the official
interpretation of the tariff headings at the international level.
Because the heading in question here is a 4-digit, or
international level heading, they are particularly pertinent.
The Explanatory Notes are intended to provide guidelines for
determining what goods are included within the scope of the
tariff heading terms "other paints and varnishes". While the
heading terms in this case do not include a reference to
dispersion of paint in an aqueous or non-aqueous medium, the
notes indicate that the heading classifies goods of that type.
The exemplars of Explanatory Notes A(1)-(3)and B(1)-(5) for
heading 3210 are products either dispersed in solution or in
liquid form. Further, all of the headings terms in Chapter 32
must be considered in pari materia, or in relation to other
headings of the chapter and of the nomenclature. Heading 3210,
HTSUSA, read in pari materia, is a 'basket' provision for those
headings which immediately precede it, and classifies paints
dispersed in an aqueous or non-aqueous medium not specifically
included in the prior headings (i.e., headings 3208 and 3209,
HTSUSA).
Moreover, the Explanatory Notes to heading 3210, HTSUSA,
also include the following:
This heading does not cover:
(c) Powder paints consisting principally of plastics and
containing additives and pigments, used for application
to objects by the effect of heat with or without the
application of static electricity, and . . . ([of]
Chapter 39). (Emphasis added)
Exclusion (c) of the Explanatory Notes would appear to
encompass goods of the type at issue here. The exclusion, we
believe, clearly manifests an intent by the drafters of the
nomenclature not to classify goods of this type in heading 3210,
but in Chapter 39, under a plastics-related heading. The
Explanatory Notes to Chapter 39 reiterate this intent by
providing for the inclusion of goods such as these in the
plastics-related headings of that chapter:
Headings 39.01 to 39.14 . . . appl[y] only to the following
forms:
(2) Powder, granules and flakes: . . . Powders may be
used, for example, to coat objects by the
application of heat with or without static
electricity. (Emphasis added)
It is the opinion of this office that powder paints such as
those at issue here are not classified in Chapter 32, HTSUSA, but
are excluded from the headings of that chapter. Further, powder
paints such as these containing high proportions of plastic
resins are classified in the plastics-related headings of Chapter
39, HTSUSA.
In addition to the provisions of the Explanatory Notes, the
application of the GRIs underscores the classification of powder
paints such as these in a plastics-related heading. Since no
other heading exists whose terms would include these goods, they
are classified by application of GRI 3. Under GRI 3, composite
goods such as these are classified by determining which of the
component materials provides the goods with their essential
character. After reviewing the material breakdown you provided,
we are of the opinion that the polyester resin component provides
the essential character. This determination is based primarily
on the overriding percentage of the goods which the polyester
resin comprises. We are also of the opinion that this case
illustrates the policy rationale for excluding powder paints such
as these from the 'paint' headings of Chapter 32, as expressed in
the Explanatory Notes. When, as in this case, a product's nature
is so clearly determined by a single component material, such as
plastics, the nomenclature classifies the product in the heading
associated with that material. In that manner, the Legal and
Explanatory Notes make a de facto essential character
determination. The Explanatory Notes to heading 3210 recognize
the overriding contribution of the plastics component to "powder
paints consisting principally of plastics", and so classify them
in a plastics-related heading.
On the basis of the Explanatory Notes to heading 3210 and
the application of GRI 3(b) to the classification of these goods,
we affirm their classification in subheading 3907.99.0050,
HTSUSA, dutiable at the rate of 3.1 cents per kilo plus 9 percent
ad valorem.
Other Issues
Your letter also raises several ancillary issues which we
will attempt to answer in brief here. First, it is not necessary
that the goods imported here fall strictly within the definition
of "plastics" to be classified in a plastics related heading. By
virtue of GRIs 2 and 3, composite goods may be classified under
any heading which includes goods made wholly of the component
material which provides their essential character. In this case,
since the polyester resin provides the essential character, the
entire product is considered to be composed of polyester resin
for classification purposes. Polyester resin is a product
falling within the definition of "plastics" found in the chapter
notes.
Contrary to your assertion that "all powder coatings would
have to fall under one of the subheadings of 3907", the rationale
of our determination here leaves open the possibility that powder
coatings could be classified under almost any subheading of the
HTSUSA. This is so because classification of these goods is
based on essential character, and essential character is
determined by the component materials unique to each individual
product. While we agree with your assertion that the formulation
of each powder coating would have to be known prior to
importation, we note that such technical data is required with
regard any goods imported into the United States whose
classification depends on component materials. See, 19 CFR
141.87, Breakdown on component materials.
Finally, we note your comments regarding the chemical
aspects, commercial fungibility and EPA standards for powder
paints. One function of the Customs Service is to interpret and
administer the Harmonized Tariff Schedule, enacted into law by
the Omnibus Trade and Competitiveness Act of 1988, 1204(c), 19
U.S.C.A. 3004(c) (West Supp. 1989). Unfortunately, it is not
within the power or authority of the Customs Service to change
the scope of a heading or the applicable duty rate. The HTSUSA
was enacted by the United States Congress, and that body is
charged with making policy decisions with regard to issues and
concerns you have raised. Further consideration of your concerns
is not properly within the purview of this office.
HOLDING:
New York Ruling Letter 839783 is affirmed. The goods in
question, powder coatings consisting of 89.2% polyester resins,
are classified in subheading 3907.99.0050, HTSUSA. As such, they
are dutiable at the rate of 3.1 cents per kilo plus 9% ad
valorem.
Sincerely,
John A. Durant
Director
Commercial Rulings Division