CLA-2 CO:R:CV:G: 085760 JLV; 845769
Mr. Matthew Chang
C. Itoh & Co. (America) Inc.
335 Madison Avenue
New York, New York 10017
RE: Unassembled bridge sections; structural girders and beams
built up from steel plate; substantial transformation;
Generalized System of Preferences (GSP)
Dear Mr. Chang:
In a letter of September 26, 1989, on behalf of C. Itoh &
Co. (America) Inc., you request a ruling on the tariff
classification and rate of duty, country of origin, and GSP
status of certain disassmbled bridge sections. This letter is
our decision on the issues.
FACTS:
Steel plate, manufactured in Japan, will be shipped to
the Philippines and fabricated into bridge sections. The
processing performed in the Philippines will consist of the
following: layout and flame cutting of top and bottom
flanges, webs, and vertical and horizontal stiffeners; welding
the flanges to the top and bottom of each web, and then the
stiffeners to the web to form built-up girders or beams;
drilling of the ends of these structurals; temporary assembly
of sections and then disassembly after painting and marking.
The built-up structurals are girders or beams which, upon
assembly, form the skeleton or structural framework for
individual sections of decking. You call the various
assemblies "bridge sections" which will be joined together to
form the superstructure framework of a plate girder type
bridge. These sections will be shipped unassembled; each
shipment will include complete, unassembled sections.
You state that the cost of fabrication in the Philippines
will be 37.5 percent of the total cost of the goods. The
actual breakdown of the costs of processing was not submitted.
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ISSUES:
1. Are the unassembled articles classified as bridge
sections?
2. Is the steel plate substantially transformed in the
Philippines for purposes of country of origin of the articles
to be imported into the United States?
3. Do the articles qualify for duty-free treatment under
the Generalized System of Preferences (GSP)?
LAW AND ANALYSIS:
Structures and parts of structures of iron or steel, and
plates, rods, angles, shapes, sections, tubes and the like of
iron or steel, prepared for use in structures, are covered by
heading 7308, Harmonized Tariff Schedule of the United States
Annotated (HTSUS). Subheading 7308.10 provides for bridges
and bridge sections; subheading 7308.90 provides for the
products of heading 7308 other than bridges and bridge
sections and the products of subheadings 7308.20, 7308.30, and
7308.40, which are not pertinent to this case.
The classification issue is whether the imported articles
are bridge sections within the meaning of subheading 7308.10,
HTSUSA; if not, then are they classifiable as other parts of
structures or as shapes or sections prepared for use in
structures within subheading 7308.90, HTSUSA. General Rule of
Interpretation (GRI) 1 applies. GRI 6, HTSUSA. As used in
heading 7308, the term "bridge-section" is an exemplar of the
type of structures and parts of structures provided for in
heading 7308. Structural supports, such as pillars and
columns are also used as exemplars in heading 7308. Girders
and beams are structural supports which, like pillars and
columns, are load-bearing parts of structures. Therefore, we
conclude that a bridge section is an identifiable bridge part
which constitutes an assemblage of structural members, and
that a simple built-up girder, by itself, does not normally
constitute a bridge section as that term is used in heading
7308, HTSUSA.
In this case, the imported articles constitute dis-
assembled, identifiable sections of a bridge superstructure.
They are to be temporarily assembled for purposes of testing
and for coding so that the components for each section can be
properly assembled when the bridge is constructed. These
distinct sections, even though they may lack the fasteners and
some minor steel components, have the essential character
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of articles identifiable and known as bridge sections.
Furthermore, the sections are shipped in a unassembled form
which is not uncommon for these kinds of large structural
articles, and the assembly after importation is by riveting,
bolting, and welding. Therefore, these unassembled sections
are classifiable as bridge sections in subheading 7308.10.00,
HTSUSA. GRI 2(a), HTSUSA.
The cutting of steel plate into distinct parts of built-
up structural components, i.e., the flanges, webs, and
stiffeners, and the welding of these parts to form the built-
up structural components are a manufacturing process that
results in new and different articles, i.e., girders, which
have a name, character, and use that are distinct from the
steel plates. Therefore, these fabricated structural
components are products of the Philippines.
Articles classified in subheading 7308.10.00 are
designated as eligible for the duty-free benefits of the GSP.
For purposes of determining whether the imported articles
qualify for the benefits of the GSP, at least 35 percent of
the appraised value of the articles must be attributed to the
cost or value of materials produced in the Philippines and the
cost or value of the direct costs of processing operations
performed in the Philippines. 19 CFR 10.176. Although you
indicate that the costs of processing in the Philippines are
equal to 37.5 percent of the cost of the articles, the value-
content requirement is based on a percentage of the appraised
value. Therefore, although the articles may be eligible for
the benefits of the GSP, we do not have sufficient information
to rule on whether they satisfy the 35 percent value-content
requirement. For your information, the value-content
requirement is explained in sections 10.177 and 10.178 of the
Customs Regulations (19 CFR 10.177 - 10.178).
HOLDING:
1. The unassembled built-up steel components which are
identifiable as distinct sections of the bridge, are classi-
fied as bridge sections in subheading 7308.10.00, HTSUSA.
2. The steel plate from Japan, when processed by cutting
into flanges, webs, and stiffeners, and then by welding to
form built-up structurals, is substantially transformed so
that the resulting new and different articles, i.e., built-up
structural, are products of the Philippines.
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3. Articles of subheading 7308.10.00, HTSUSA, from the
Philippines, are designated as eligible for the benefits of
the GSP and may be entered free of duty if the conditions set
forth in General Note 3(c)(ii), HTSUSA, are satisfied.
Sincerely,
John Durant, Director
Commercial Rulings Division
6cc: AD NY Seaport
2cc: Chief, CIE
1cc: Marvin Amernick
1cc: AC, CO
1cc: Director, Trade Ops
1cc: Durant
1cc: Reading File
1cc: NIS Julius Miller
LIBRARY: valentin
FILE NAME:085760