CLA-2:CO:R:C:M 954256 JAS
Mr. Ralph H. Sheppard, Esq.
Adduci, Mastriani, Schaumberg & Schill
330 Madison Avenue
New York, NY 10017
RE: Galvanized API-5L Line Pipe; Welded Tubes and Pipes of
Nonalloy Steel; Subheading 7306.10.10, Line Pipe of a Kind
Used for Oil or Gas Pipelines; Principal Use, Additional
U.S. Rule 1(a), HTSUS, HQ 954370; Slip Op. 93-46, NY 877544
Modified
Dear Mr. Sheppard:
In a letter to the Area Director of Customs, New York Seaport, dated
August 18, 1992, on behalf of Western American Mfg., Inc., you inquired as to
the tariff classification of certain imported pipe meeting American Petroleum
Institute (API) Specification 5L for line pipe.
In NY 877544, dated September 11, 1992, the Area Director replied to
your request and confirmed that welded nonalloy steel line pipe was
classifiable in subheading 7306.10.10, HTSUS. This letter represents a
modification of the position expressed in NY 877544.
FACTS:
As described in your August 18, 1992, ruling request, the pipe in issue
is welded, nonalloy steel pipe in various lengths, typically 21 feet, having
outside diameters ranging from 0.5 inch to 4 inches. The inquiry covered both
zinc coated or galvanized pipe and uncoated or "black" pipe. Both types were
said to be certified by the manufacturers as pipe satisfying the API-5L
technical specification regarding pressure and burst limitations. Galvanizing
of this pipe is said to be for purposes of corrosion resistance.
You stated that pipe conforming to the API-5L specification is intended
to accommodate the high pressures and adverse chemical environments associated
with movement by pipe of - 2 -
volatile petrochemical products. As such, you proposed that both types be
classified under the provision for tubes, pipes and hollow profiles of iron
or steel, line pipe of a kind used for oil or gas pipelines, in subheading
7306.10.10, Harmonized Tariff Schedule of the United States (HTSUS).
The provisions under consideration are as follows:
7306 Other tubes, pipes and hollow profiles
(for example, open seamed or welded,
riveted or similarly closed), of iron or
steel:
7306.10 Line pipe of a kind used for oil or gas
pipelines:
7306.10.10 Of iron or nonalloy steel...1.9 percent
* * * *
7306.30 Other, welded, of circular cross section,
of iron or nonalloy steel:
7306.30.10 Having a wall thickness of less than 1.65 mm
...8 percent
Having a wall thickness of 1.65 mm or more:
7306.30.50 Other...1.9 percent
ISSUE:
Whether nonalloy steel pipe that has been galvanized belongs to a class
or kind of pipe that is principally used for oil or gas pipelines.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the
United States (HTSUS) in accordance with the General Rules of Interpretation
(GRIs). GRI 1 states in part that for legal purposes, classification shall be
determined according to the terms of the headings and any relative section or
chapter notes, and provided the headings or notes do not require otherwise,
according to GRIs 2 through 6.
Additional U.S. Rule of Interpretation 1(a), HTSUS, states that in the
absence of special language or context which otherwise requires, a tariff
classification controlled by use (other than actual use) is to be determined
in accordance with the use in the United States at, or immediately prior to,
the - 3 -
date of importation, of goods of that class or kind to which the
imported goods belong, and the controlling use is the principal use.
The language in subheading 7306.10 "of a kind used for" explicitly
invokes use as a criteria for classification and in such cases principal use
is controlling. Group Italglass U.S.A., Inc. v. United States, Slip Op. 93-46, decided March 29, 1993. For tariff purposes, principal use is that use
which exceeds any other single use of the goods. HQ 954370, dated September
1, 1993.
Technical information available to us indicates that for both
environmental and safety reasons it is not common practice to galvanize pipe
used in oil or gas pipelines. Metallurgically, there are elements in the soil
that tend to attack zinc and would therefore compromise its anti-corrosive
qualities. Similarly, petroleum products are high in sulfur which attacks
zinc, thus contaminating the petroleum and corroding the inside of the pipe.
Mechanically, most oil and gas line pipe is welded end-to-end and galvanized
pipe cannot be effectively welded, as the presence of zinc weakens the weld
and may cause the weld point to rust. Likewise, for safety reasons it is not
common practice to coat line pipe with zinc as zinc conducts electricity and
would therefore attract stray underground electrical charges. In addition,
heat generated by the welding process tends to vaporize the zinc which may
prove hazardous to the welder.
For these and other reasons, we are of the opinion that the galvanized
AP1-5L steel line pipe in issue does not belong to that class or kind of pipe
principally used for oil or gas pipelines.
HOLDING:
Under the authority of GRI 1, galvanized welded nonalloy steel pipe
conforming to API Specification 5L is provided for in heading 7306. However,
it has not been shown to belong to a class or kind of pipe principally used
for oil or gas pipelines. The pipe is classifiable in subheading 7306.30.10
or in subheading 7306.30.50, HTSUS, as appropriate, depending on wall
thickness.
NY 877544, dated September 11, 1992, is modified with respect to the
galvanized welded nonalloy steel pipe.
In accordance with section 625, this ruling will become effective 60
days after its publication in the CUSTOMS BULLETIN. - 4 -
Publication of rulings or decisions does not constitute a change of
practice or position in accordance with section 177.10(c)(1), Customs
Regulations (19 CFR 177.10(c)(1)).
Sincerely,
John Durant, Director
Commercial Rulings Division