CLA-2 RR:CR:SM 561624 RSD
Tariff No. 9802.00.60
Area Port Director
U.S. Customs Service
1000 2nd Avenue, Suite 2100
Seattle, Washington 98104-1049
RE: Application for Further Review of Protest Number 3001-99-100475 concerning the claim for a partial duty exemption under subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUS) for seamless copper tubes imported from Japan
Dear Director:
This is in response to your memorandum which we received on January 12, 2000, regarding the application for Further Review of Protest Number 3001-99-100475 filed by Nissho Iawi American Corporation on September 10, 1999, contesting your decision to deny the partial duty exemption under subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUS), to seamless copper tubes imported from Japan.
FACTS:
The record indicates that the protestant, Nissho Iwai American Corporation, entered four shipments of seamless copper tubes from Japan on April 23, 1998, April 30, 1998, May 28, 1998, and June 12, 1998 at the port of Seattle. The protestant entered the merchandise under subheading 9802.00.60, HTSUS, a partial duty exemption provision for metal manufactured in the United States or subjected to a process of manufacture in the United States, which is exported for further processing and returned to the United States for further processing.
Upon review of the entries, your office issued a Customs Form (CF) 28 request for information to the importer covering all four entries. Each entry contained a “Declaration of Foreign Processor” that set forth the foreign processing costs for a certain quantity of copper. The additional documentation requested included proof to show that the imported metal copper was:
Manufactured in the U.S.
Exported from U.S.
Processed without substitution, and
Whether the imported copper underwent further processing in the U.S. after importation.
In response to the request for information, the importer provided bills of lading to show proof of export for 219,465 pounds and 219,790 pounds of copper from ASARCO, Inc., New York, NY (the shipper), invoiced by Mitsu USA. The protestant also provided certificates from Kobe Steel of Japan that indicates that all 219,465 pounds and 219,790 pounds of copper received from Mitsu were processed into 219,102 pounds and 214,620 pounds of seamless copper tubes (encompassing all the tubes in the four entries subject to this protest). The protestant also resubmitted an additional copy of a document originally presented with the entries, a “Declaration of a Foreign Processor”, stating in part “no substitution whatever has been made to replace any of the articles originally received by us the owner or exporter thereof….” Additionally, the protestant also furnished a statement from the Assistant Sales Manager of Kobe Copper Products in Pine Hall, North Carolina, which describes a number of processes that were performed on the imported articles. However, you point out that the protestant did not provide a declaration from the owner, importer, consignee, or an agent indicating that the copper was manufactured in the United States or subject to a process of manufacture in the United States. In addition, the protest file does not contain any evidence to show that the copper was initially manufactured or subjected to a process of manufacture in the United States.
Upon review of the documents that the protestant submitted, your office determined that the importer had failed to verify its claim for the partial duty exemption treatment under subheading 9802.00.60, HTSUS, and liquidated the entries under subheading 7411.10, HTSUS, on the full entered value of the merchandise.
ISSUE:
Whether the seamless copper tubes imported from Japan are eligible for the partial duty exemption under subheading 9802.00.60, HTSUS.
LAW AND ANALYSIS:
Subheading 9802.00.60, HTSUS, provides a partial duty exemption for any article of metal (as defined in U.S. note 3(d) of this subchapter) manufactured in the United States or subjected to a process of manufacture in the United States, if exported for further processing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United States, is returned to the United States for further processing.
This tariff provision imposes a dual "further processing" requirement on eligible articles of metal one foreign, and when returned, one domestic. Metal articles satisfying these statutory requirements may be classified under this tariff provision with duty only on the value of such processing performed outside the U.S., provided there is compliance with the documentary requirements of section 10.9, Customs Regulations (19 CFR 10.9).
Eligible articles of metal are defined in U.S. note 3(d), subchapter II, Chapter 98, HTSUS, which provides that:
[f]or purposes of subheading 9802.00.60, the term "metal" covers (1) the base metals enumerated in additional U.S. note 3 to section XV;
(2) arsenic, barium, boron, calcium, mercury, selenium, silicon, strontium, tellurium, thorium, uranium, and the rare earth elements; and (3) alloys of any of the foregoing.
Base metals are further enumerated in additional U.S. note 3, section XV, HTSUS, which provides that:
[f]or the purposes of the tariff schedule, the term "base metals" embraces aluminum, antimony, beryllium, bismuth, cadmium, chromium, cobalt, copper, gallium, germanium, hafnium, indium, iron and steel, lead, magnesium, manganese, molybdenum, nickel, niobium (columbium), rhenium, tantalum, thallium, tin, titanium, tungsten, vanadium, zinc and zirconium.
First, we note that the applicable tariff classification for the imported merchandise is subheading 7411.10.10.30, HTSUS, seamless copper tube and pipe. Because copper is a base metal which is specifically enumerated in additional U.S. Note 3, Section XV, HTSUS, the imported merchandise is an eligible article of metal for purposes of subheading 9802.00.60, HTSUS.
Section 10.9 of the Customs Regulations, 19 CFR 10.9, which sets forth the documentary requirements of 9802.00.60 HTSUS, requires that a declaration from the person who performed the processing abroad be filed. 19 CFR 10.9 also requires that the owner, importer, consignee, or agent having knowledge of the pertinent facts also provide a declaration that the processor’s declaration is true and correct. This declaration must also certify that the articles were manufactured in the United States, or if the merchandise is of foreign origin, it was subject to processes in the United States, such as molding casting, and machining. In addition, the declaration must indicate that the articles entered in their processed condition are otherwise the same articles that were exported on the same date indicated in the declaration, and that the returned articles will be subject to processing performed in the United States.
Under 19 CFR 10.9(b), the port director may require additional documentation as is deemed necessary to prove actual exportation of the articles from the United States for processing such as a foreign customs entry, a foreign customs invoice, a foreign landing certificate bill of lading, or an airway bill.
We have reviewed the documents and the evidence submitted in support of the protest. The bills of lading submitted by the protestant indicate that copper was exported from the United States to Japan. There are also declarations from the manager for the export group at Kobe Steel that state that the copper that was exported from the United States was processed into seamless copper tubes in Japan before they were imported to the United States. In addition, evidence was submitted that the imported tubes were further processed in the United States. However, the record indicates that a declaration from the owner, importer, consignee, or agent having knowledge of the pertinent facts certifying that the copper was manufactured in the United States, or that it was subject to processes in the United States has not been provided to Customs. Accordingly, the protestant has not satisfied the documentary requirements set forth in 19 CFR 10.9 for establishing a claim for a partial duty exemption under subheading 9802.0060, HTSUS. Absent evidence demonstrating that the exported copper was in fact manufactured in the United States, or subject to a process of manufacture in the United States, we conclude that the imported seamless copper tubes are not entitled to the partial duty exemption under subheading 9802.00.60 HTSUS.
HOLDING:
On the basis of the information submitted, Customs finds that the protestant has not established that the requirements of 19 CFR 10.9 have been satisfied. Accordingly, the articles are not entitled to entry under HTSUS subheading 9802.00.60. Therefore, this protest should be denied in full.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division