CLA-2 RR:CR:GC 960948 PH
Ms. Mary E. Gill
Lucent Technologies
Guilford Center 1 - 3A10
5420 Millstream Road
Greensboro, NC 27420
RE: NY B85983 revoked; glass rods; unworked; other articles of
glass; optical fiber; preforms; incomplete or unfinished;
essential character; Note 2(a), Chapter 70; GRI 2(a); ENs
Rule 2(a)(II); 70.02; 90.01; Blakley Corp. v. United States;
Ugg International, Inc. v. United States; Winter-Wolff,
Inc., v. United States; Sharp Microelectronics Technology,
Inc. v. United States; Superior Wire v. United States
Dear Ms. Gill:
On June 18, 1997, New York Ruling Letter (NY) B85983 was
issued to you concerning "glass preforms" made from fused silica.
You were advised that the merchandise was classifiable in
subheading 7002.20.1000, Harmonized Tariff Schedule of the United
States (HTSUS), as glass rods, unworked, of fused quartz or other
fused silica.
This letter is to inform you that NY B85983 no longer
reflects the view of Customs. Pursuant to section 625(c)(1),
Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section
623 of Title VI (Customs Modernization) of the North American
Free Trade Agreement Implementation Act (Pub.L. 103-182, 107
Stat. 2057, 2186), notice of the proposed revocation of NY B85983
was published on July 1, 1998, in the CUSTOMS BULLETIN, Volume
32, Number 26. Our position, set forth below, addresses the
comments received in response to the notice.
FACTS:
NY B85983 described the merchandise, "glass preforms", as
solid glass rods made from fused silica. According to NY B85983,
the glass preforms are the rods from which glass optical fiber is
fabricated.
Optical fiber consists of "[a] long thin strand of
transparent glass, plastic, or other material usually consisting
of a fiber optical core and a fiber optical cladding capable of
conducting light along its axial length by internal reflection"
(U.S. International Trade Commission (USITC) Publication 2851,
February 1995, Industry & Trade Summary, Optical Fiber, Cable,
and Bundles, B-2). The core and the cladding of optical fibers
always have a different refractive index ("[a] key design feature
of all optical fibers is that the refractive index of the core is
higher than the refractive index of the cladding" (Fiber Optic
Reference Guide, David R. Goff (1996), 11). A glass preform such
as those under consideration is "... a magnified version of the
fiber to be drawn from it" (USITC Publication 2851, supra, B-2).
That is, the optical characteristics (including attenuation,
dispersion, single or multi-mode, and wavelength (Fiber Optic
Reference Guide, supra, at 20-30; Just the Facts, A basic
overview of fiber optics, Corning (1995), at 15-19; McGraw-Hill
Encyclopedia of Science & Technology (6th ed. 1987), vol. 12,
414-415, Optical fibers)) of the optical fiber which will be
drawn from the preform are determined by the preform.
The manufacturing process for producing preforms is
generally described as follows in the Kirk-Othmer Encyclopedia of
Chemical Technology (4th ed., vol. 4 (1994) Glass, 555, 615):
... [P]ure chlorides are entrained in an oxygen
carrier-gas system, accurately metered, transported, and
then react at temperatures about 1500øC. The chloride
reaction with oxygen, to form the desired oxides plus
chlorine gas, is virtually homogeneous and produces a finely
divided particulate glass material commonly called soot. ...
The glass soot is formed into solid inclusion-free glass
bodies, which are then heated to temperatures where the
glass is fluid enough to be drawn into optical fibers.
The preforms under consideration are produced by a two-step
process. In the first step, the core layer of the preform is
produced by a method called "Vapor Axial Deposition" (VAD).
Extremely fine "dusts" or "soots" of silica tetrachloride and
additional chemicals are grown or deposited on the end of a
"target" rod, forming a column of the "dust" or "soot" material.
The column is drawn though a furnace, fusing it into a rod and
releasing the chlorine. In the second step, the cladding layer
of the preform is added by fusing to the outside of the core rod
a layer of silica dioxide powder. Such a two-step production
process is described in Kirk-Othmer, supra, 616, as follows:
... Sometimes a two-step process can be employed for
efficiency. A preform is made which is roughly half core
and half cladding. The sintered preform is then drawn into
rod and then overclad with pure silica soot to obtain the
appropriate core/clad ratio.
After deposit of the silica dioxide powder or soot to form
the cladding layer of the preform, the "target" rod on which the
core layer was deposited or grown is removed. This phase of the
process is described in Fiber Optic Reference Guide, supra, 16,
as follows:
... When the deposition is complete, the rod is
removed, and the deposited material is placed into a
consolidation furnace. The water vapor is removed, and the
preform is collapsed to become dense, transparent glass.
The core and cladding of the preform consist of glass with
different refractive indexes. Kirk-Othmer, supra, at 615,
describes the respective refractive indexes and materials of a
typical single-mode fiber (according to Kirk-Othmer, supra, at
614, more than 90% of the optical fiber market is comprised of
single-mode fiber) as follows:
The core, which has a step refractive index profile, is an 8
wt % GeO2 + 92 wt % SiO2 glass. The germania raises the
refractive index to about 1.4585. The refractive index of
the pure silica cladding is about 1.4534. That difference
in refractive index is sufficient to guide the laser light
with minimum distortion.
The resulting article, in the form of a rod approximately 62
millimeters in diameter and 1500 millimeters in length, may be
flame polished using an oxyhydrogen flame to achieve a smooth
surface, if necessary.
To produce optical fiber from the preform, the preform is
heated and drawn into a continuous strand of "hair-thin" optical
fiber (Fiber Optic Reference Guide, supra, at 15). In USITC
Publication 2851, supra, the process is described as follows:
... The preform descends from a platform just below the top
of a vertical draw tower into a furnace heated at very high
temperatures to soften the glass. The softened glass is
drawn by gravity to produce a fiber that is captured on
spinning capstans and wheels [at 1, footnote 3].
A single preform can yield more than 30 miles of fiber (see
Collier's Encyclopedia (1996), vol. 9, Fiber optics, "[a] two-foot (60-cm) tube can yield more than 30 miles (50 km) of
fiber").
The optical fiber which is drawn from the preform is then
protectively coated. See Fiber Optic Reference Guide, supra, at
15-16:
The optical fiber is encased in several protective layers to
ensure integrity under various conditions. The first layer
is applied to the glass fiber as it is drawn from the
preform. This coating is generally made of ultraviolet-curable acrylate or silicone, and it serves as a moisture
shield and as mechanical protection during the early stages
of cable production. A secondary buffer is often extruded
over the primary coating to further improve the fiber's
strength.
See also, Just the Facts, A basic overview of fiber optics,
supra, p. 8, Coating.
The subheadings under consideration are as follows:
7002.20.10: Glass in balls (other than microspheres of
heading 7018), rods or tubes, unworked: ...
Rods: Of fused quartz or other fused silica.
The 1998 general column one rate of duty for goods classifiable
under this provision is 0.9% ad valorem.
7020.00.60: Other articles of glass: ... Other.
The 1998 general column one rate of duty for goods classifiable
under this provision is 5.3% ad valorem.
9001.10.00: Optical fibers and optical fiber bundles:
optical fiber cables other than those of
heading 8544 ...: Optical fibers, optical
fiber bundles and cables.
The 1998 general column one rate of duty for goods classifiable
under this provision is 7% ad valorem.
ISSUE:
Whether the glass preforms are classifiable as unworked
glass in rods in subheading 7002.20.10, HTSUS, other articles of
glass in subheading 7020.00.60, HTSUS, or optical fibers in
subheading 9001.10.00, HTSUS.
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. GRI 2(a)
provides, in pertinent part, that:
(a) Any reference in a heading to an article shall be taken
to include a reference to that article incomplete or
unfinished, provided that, as entered, the incomplete or
unfinished article has the essential character of the
complete or finished article. ...
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) constitute the official interpretation of
the Harmonized System. While not legally binding on the
contracting parties, and therefore not dispositive, the ENs
provide a commentary on the scope of each heading of the
Harmonized System and are thus useful in ascertaining the
classification of merchandise. Customs believes the ENs should
always be consulted. See T.D. 89-80, published in the Federal
Register August 23, 1989 (54 FR 35127, 35128).
The preforms have the shape of a rod (see Webster's New
World Dictionary (3rd Coll. Ed. 1988) rod "3 any straight, or
almost straight, stick, shaft, bar, staff, etc., of wood, metal,
or other material ..."). To be classifiable as glass in rods in
subheading 7002.20.10, the preforms must be "unworked."
Note 2(a), Chapter 70, HTSUS, provides that:
For the purposes of headings 7003, 7004 and 7005 ... [g]lass
is not regarded as "worked" by reason of any process it has
undergone before annealing[.]
As for the issue of whether this definition applies to
heading 7002, the Court in Blakley Corp. v. United States, CIT
Slip Op. 98-94 (CUSTOMS BULLETIN, July 29, 1998, vol. 32, no. 30,
45), considered a similar issue (whether the definition of the
term "slab" in Additional U.S. Note 1 of Chapter 68, HTSUS,
applies throughout Chapter 68 or only for purposes of heading
6802, as provided in the Note). The Court stated that "Congress'
intent to limit the descriptions contained in Notes 1 and 2
[defining "tiles" for purposes of heading 6810] could scarcely be
made more clear" (CUSTOMS BULLETIN, July 29, 1998, vol. 32, no.
30, at 50). Similarly, in this case, Congress' intent to limit
the description contained in Note 2(a) to the named headings (not
including heading 7002) could scarcely be made more clear. The
limitation of "worked" in Note 2(a), Chapter 70, HTSUS, is
inapplicable to heading 7002, HTSUS.
EN 70.02 states, in part, that:
This heading covers ... [g]lass rods and tubing of
various diameters, which are generally obtained by drawing
(combined with blowing in the case of tubing); they may be
used for may purposes (e.g., for chemical or industrial
apparatus; in the textile industry; for further manufacture
into thermometers, ampoules, electric or electronic bulbs
and valves, or ornaments). Certain tubes for fluorescent
lighting (used mainly for advertising purposes) are drawn
with partitions running through the length.
. . .
Balls of this heading must be unworked; similarly rod
and tubing must be unworked (i.e., as obtained direct from
the drawing process or merely cut into lengths the ends of
which may have been simply smoothed).
The heading excludes balls, rod and tubing made into
finished articles or parts of finished articles recognisable
as such; these are classified under the appropriate heading
(e.g., heading 70.11, 70.17 or 7018, or Chapter 90). If
worked, but not recognisable as being intended for a
particular purpose, they fall in heading 70.20.
This heading includes tubes (whether or not cut to
length) of glass which has had fluorescent material added to
it in the mass. On the other hand, tubes coated inside with
fluorescent material, whether or not otherwise worked, are
excluded (heading 70.11).
Basically, the preforms under consideration are manufactured
by depositing a powder or soot of silica tetrachloride and
additional chemicals on a "target" glass rod to form a column of
silica tetrachloride powder (with the additional chemicals). The
column is drawn through a furnace, resulting in a rod of fused
silica dioxide and the additional chemicals and the release of
the chlorine gas. Onto this rod is deposited powder or soot of
silica dioxide which is fused on the outside of the core rod.
The "target" rod is removed and the result is a solid rod of
silica glass consisting of a core and cladding, each of different
materials and with a different refractive index. This solid rod
may be flame polished to achieve a smooth surface.
The preforms are not "unworked", as that term is defined in
EN 70.02. That is, discounting "work" on the "target" rod which
is removed from the preform and is not imported, according to the
importer's description, a rod of the core soots is created in the
first step of manufacture. That rod is then "worked" by the
addition to it of cladding soots which are fused onto it. These
cladding soots make up a layer of glass over the core rod which
has different characteristics than the core rod. The core rod
with cladding is then further "worked" by the removal of the
"target" rod. Clearly, the preform is not "as obtained directly
from the drawing process" (EN 70.02, above). Instead of being an
article as obtained directly from a simple manufacturing process,
as described in EN 70.02 (e.g., moulding, pressing, drawing,
blowing), the preform is obtained from a complex manufacturing
process in which a rod is first created and then "worked" (in
this regard, see, e.g., the distinction in the EN between tubes
of glass which have had fluorescent material added to in the
mass, included in heading 7002, and tubes coated inside with
fluorescent material, excluded from heading 7002). Furthermore,
even after the core rod is "worked" with the addition of the
cladding layer and the removal of the "target" rod, according to
the importer the article may be further "worked" by flame
polishing (in this regard, we note the limitation in EN 70.02 on
the working of articles in heading 7002 to "merely cut[ting] into
lengths the ends of which may have been simply smoothed"
(emphasis added; note that this provision permits only "the ends"
to be simply smoothed)).
This interpretation of the term "unworked" in heading 7002
is consistent with the general treatment of merchandise in
different stages of manufacture (see Ruth Sturm, Customs Law &
Administration, 3rd ed. (1993), 54.3, "[t]here is often a
progression of increasing duties from the raw material through
various intermediate stages to the article manufactured from the
original material"; see also, Ugg International, Inc. v. United
States, 17 CIT 79, 85-86, 813 F. Supp. 848 (1993)). It is also
consistent with a recent case of the Court of International
Trade. In Winter-Wolff, Inc., v. United States, CIT Slip Op. 98-15 (Customs Bulletin and Decisions, March 25, 1998, vol. 32, no.
12, 71), the Court interpreted the term "further worked" as it
appears in subheading 7607.11.30, HTSUS. After determining that
the common meaning of the term was applicable (ibid at 74-75, on
the basis of the presumption that the commercial meaning of a
term is the same as its common meaning unless the party who
argues that the meanings are different proves that "there is a
different commercial meaning in existence which is definite,
uniform, and general throughout the trade"), the Court reviewed
the dictionary meaning of the words. The Court concluded:
When cobbled together, this dictionary meaning amounts to
the following: to form, fashion, or shape an existing
product to a greater extent." [ibid at 79.]
The production process for the preforms exactly meets this
definition. An existing product (the core rod) is formed,
fashioned, or shaped to a greater extent (by deposition of
cladding soots on it and fusing of those soots to it, removal of
the "target" rod, and after that by flame polishing as
necessary).
Accordingly, on the basis of EN 70.02 and the Court's
analysis of "further worked" in Winter-Wolff, supra (based on the
common and commercial meaning of the term), we conclude that the
preforms do not qualify as "unworked" for purposes of heading
7002, HTSUS. Therefore, they may not be classified under
subheading 7002.20.10, HTSUS.
We note that this position is not inconsistent with the
history of consideration of this issue at the Customs Co-operation Council (CCC) during the drafting of the EN (see CCC
Documents 31.738, August 31, 1984; 31.820, September 21, 1984;
and 32.550/32.551, Annex D/9). CCC Document 31.738 is a report
of a proposal by the Canadian administration that glass preforms
such as those under consideration be classified in heading 7020
and that the EN for that heading be amended to specifically so
provide. According to the CCC Document, the Secretariat was of
the opinion that the preforms were classifiable in heading 7002
and that heading 7020 could be discounted. The CCC Document
states that if the view of the Secretariat was accepted, a
reference should be added to EN 70.02, stating that the heading
includes the glass preforms.
As stated above, CCC Document 31.738 contains a proposal
regarding the classification of glass preforms. Subsequent CCC
documents describe the action taken in response to this proposal.
CCC Document 31.820, September 21, 1984, reported that
consideration of the question was being deferred for further
study. CCC Document 32.550/32.551, Annex D/9 reported the final
action on the proposal, stating that the Nomenclature Committee
had decided, by a 9 to 4 vote, that the preforms were
classifiable in heading 7020 and that the Interim Harmonized
System Committee (IHSC) had decided, by a 6 to 5 vote, that they
were classifiable in heading 7002. In view of this situation,
the document reports that "it was decided that the question
should remain outstanding and no reference be made in the [EN]."
Thus, this history is inconclusive as to classification of the
glass preforms in heading 7002 or 7020.
Optical fibers covered by subheading 9001.10.00, HTSUS, are
described in EN 90.01 as follows:
Optical fibres consist of concentric layers of glass or
plastics of different refractive indices. Those drawn from
glass have a very thin coating of plastics, invisible to the
naked eye, which renders the fibres less prone to fracture.
Optical fibres are usually presented on reels and may be
several kilometers in length. ...
Because a preform is "... a magnified version of the fiber
to be drawn from it" (USITC Publication 2851, supra, B-2) and
determines the optical characteristics of the optical fiber which
will be drawn from it (see above), it may be argued that, on the
basis of GRI 2(a), the preforms are classifiable in subheading
9001.10.00, HTSUS, as incomplete or unfinished optical fiber. To
be classified as an incomplete or unfinished article under GRI
2(a), the article must have the essential character of the
complete or finished article.
In determining the essential character of an article under
the HTSUS, the Courts have looked to the function or use of the
article. See Sharp Microelectronics Technology, Inc. v. United
States, 932 F. Supp. 1499, 1504-1505 (CIT 1996), affirmed 122
F.3d 1446 (1997), in which the Court cited the applicable EN to
determine that the essential character, for purposes of GRI 2(a),
of automatic data processing machines under heading 8471 is given
by "... the ability to process data ...." See also Mita Copystar
America, Inc. v. United States, CIT Slip Op. 97-73 (1997); Better
Home Plastics Corp. v. United States, CIT Slip Op. 96-35 (1996),
affirmed, CAFC Appeal No. 96-1322 (1997); and Vista International
Packaging Co., v. United States, 19 CIT 868 (1995), in which the
Court looked to the role of the constituent material in relation
to the use of the goods of which the material was a part in
determining essential character, for purposes of GRI 3(b).
The function or use of optical fibers is to transmit
information in the form of light through very thin flexible
strands (see Random House Unabridged Dictionary (2d ed. 1993),
"optical fiber, a very thin flexible glass or plastic strand
along which large quantities of information can be transmitted in
the form of light pulses: used in telecommunications, medicine,
and other fields"; see also USITC Publication 2851, supra, B-2,
defining "Optical Fiber" as "[a] long thin strand of transparent
glass, plastic, or other material usually consisting of a fiber
optical core and a fiber optical cladding capable of conducting
light along its axial length by internal reflection"; and Fiber
Optic Reference Guide, supra, at 11 ("[o]ptical fibers are
extremely thin strands of ultra-pure glass designed to transmit
light from a transmitter to a receiver").
Although the optical characteristics of the optical fiber
may be determined by the preform from which the fiber is drawn,
the preform does not have the essential physical characteristics
necessary for practical use as optical fiber. It is neither thin
nor flexible (in regard to the latter, we understand that "the
recognized industry-standard bend diameter" provides for the
looping of fiber with bend diameters as small as two inches (Just
the Facts, A basic overview of fiber optics, supra, page 15,
Bending Parameters)). These characteristics (thinness and
flexibility) are necessary for the usages of optical fibers (see
USITC Publication 2851, supra, at 1, wherein it is stated
"[o]ptical fiber systems now carry the bulk of long-distance
telecommunications traffic in the United States," and other
communication uses are described; the relatively thick,
inflexible preform simply could not be so used). The statement
in EN 90.01 that "[o]ptical fibres are usually presented on reels
and may be several kilometers in length" supports the treatment
of thinness and flexibility as essential characteristics of
optical fibers.
EN GRI Rule 2(a)(II) provides that:
The provisions of this Rule also apply to blanks unless
these are specified in a particular heading. The term
"blank" means an article, not ready for direct use, having
the approximate shape or outline of the finished article or
part, and which can only be used, other than in exceptional
cases, for completion into the finished article or part
(e.g., bottle preforms of plastics being intermediate
products having tubular shape, with one closed end and one
open end threaded to secure a screw type closure, the
portion below the threaded end being intended to be expanded
to a desired size and shape).
Semi-manufactures not yet having the essential shape of
the finished articles (such as is generally the case with
bars, discs, tubes, etc.) are not regarded as "blanks".
The preforms may not be classified as incomplete or
unfinished optical fiber under EN GRI Rule 2(a)(II) because they
do not have the approximate shape or outline of the finished
article (the preforms are relatively thick and inflexible;
optical fiber is very thin and flexible). Preforms are "[s]emi-manufactures not yet having the essential shape of the finished
articles", just as in the second paragraph of EN GRI Rule
2(a)(II), above (note the reference to semi-manufactures such as
"bars" above, note also that the dictionary definition of "rod",
supra, includes bars). This also supports treatment of the
preforms as other than incomplete or unfinished optical fiber.
Furthermore, we note that the parenthetical exception for bottle
preforms of plastics in the first paragraph of EN GRI Rule
2(a)(II), added to the EN by amendment in 1997 (CCC Document
41.285 E, August 7, 1997) adds support to the position that the
glass preforms in this case are not incomplete or unfinished
optical fiber (i.e., the ENs were specifically amended to provide
for the classification of the bottle preforms as incomplete or
unfinished articles and although the analogous issue for the
glass preforms was quite thoroughly considered (see CCC Documents
31.738, 31.820, and 32.550/32.551, Annex D/9, referred to above),
no such provision was made for the glass preforms).
A comment received in response to the notice in the July 1,
1998, CUSTOMS BULLETIN cited Court decisions (principally
Superior Wire v. United States, 11 CIT 608, 669 F. Supp. 472
(1987), affirmed 7 Fed. Cir. (T) 43, 867 F.2d 1409 (1989)) on
substantial transformation in regard to classification of the
glass preforms as incomplete or unfinished optical fiber in
subheading 9001.10.00, HTSUS. We do not believe that such
decisions are necessarily relevant. In any case, we believe that
the facts in Superior Wire are distinguished from the facts in
this case. In Superior Wire, the Court held that wire rod which
had been cold drawn into wire, with a reduction in cross-sectional area of about 30% but the strength characteristic
unchanged, as metallurgically predetermined in the manufacture of
the wire rod, was not substantially transformed for purposes of
the applicability of a voluntary restraint agreement (VRA). Cold
drawing of wire is a relatively simple process, basically
involving only the drawing (or pulling) of material through dies
(see McGraw-Hill Encyclopedia of Science & Technology, vol. 5,
406 (1987), Drawing of metal). The production of optical fiber
from a preform involves drawing the preform through a furnace
heated at very high temperatures and the encasement of the glass
fiber in several protective layers (see FACTS, above). The
effect of the cold drawing on the form of the wire rod in
Superior Wire, was a reduction in its cross-sectional area of
approximately 30%, whereas the preforms are reduced in diameter
from 62 millimeters to a "hair-thin strand" (USITC Publication
2851, supra, 1; see also Fiber Optic Reference Guide, supra, at
27, describing popular fiber core/cladding sizes). As noted
above, the length of the preforms is also very significantly
changed (a single preform can yield more than 30 miles of fiber).
Accordingly, the preforms may not be classified as unworked
glass in rods in subheading 7002.20.10, HTSUS, because they are
worked. Neither may the preforms be classified in subheading
9001.10.00, HTSUS, as incomplete or unfinished optical fiber
(because the preforms do not have the essential character of
optical fiber, and on the basis of EN GRI Rule 2(a)(II)).
Therefore, we conclude that the preforms are classifiable under
the provision for other articles of glass, other, in subheading
7020.00.60, HTSUS.
HOLDING:
The glass preforms are classifiable as other articles of
glass in subheading 7020.00.60, HTSUS, and not as unworked glass
in rods in subheading 7002.20.10, HTSUS, or incomplete or
unfinished optical fibers in subheading 9001.10.00, HTSUS.
EFFECT ON OTHER RULINGS:
NY B85983 dated June 18, 1997, is REVOKED. In accordance
with 19 U.S.C. 625(c)(1), this ruling will become effective 60
days after its publication in the CUSTOMS BULLETIN.
Publication of rulings or decisions pursuant to 19 U.S.C.
625(c)(1) 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