OT:RR:CTF:VS H265781 RMC
Port Director
10 Causeway St.
Boston, MA 02222-1059
Re: Subheading 9802.00.60; Revocation of HQ 560430; Copper Sheets; Scrap
Dear Sir:
It has come to our attention that a decision issued to you, Headquarters Ruling (“HQ”) 560430, dated June 30, 1997, regarding Waterbury Rolling Mills, Inc., concerning the eligibility of copper sheets for a partial duty exemption under subheading 9802.00.60, Harmonized Tariff Schedule of the United States (“HTSUS”), is in error. 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, notice of the proposed action was published on September 30, 2015, in the Customs Bulletin, Vol. 49, No. 39. No comments were received in response to this notice.
FACTS:
HQ 560430 addresses the eligibility of imported copper sheets for a partial duty exemption under subheading 9802.00.60. Waterbury Rolling Mills imported refined copper sheets or copper alloy sheets and performed a variety of manufacturing processes, including splitting, annealing, milling, rolling, brushing, and leveling in the United States, which produced a certain amount of scrap metal. The scrap metal was returned to the manufacturer abroad, where it was used to create new copper sheets for import to the United States. HQ 560430 held that the copper sheets made from scrap metal were not eligible for a partial duty exemption under subheading 9802.00.60, HTSUS.
ISSUE:
Whether imported copper sheets made from scraps generated from splitting, annealing, milling, rolling, brushing, or levelling imported copper in the United States are eligible for a partial duty exemption under subheading 9802.00.60, HTSUS.
LAW AND ANALYSIS:
Subheading 9802.00.60, HTSUS, provides a partial duty exemption for:
[a]ny article of metal . . . manufactured in the United States or subject 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 for the United States for further processing.
HQ 560430 found that the copper sheets were “articles of metal” for the purposes of subheading 9802.00.60, HTSUS, and that the copper sheets were “exported for further processing.” However, it found that the exported scrap was not “subject to a process of manufacture” in the United States.
With respect to the requirement that the scrap metal be “manufactured or subject to a process of manufacture in the United States,” CBP has noted that there are two types of scrap metal: “obsolete” and “industrial.” See HQ 555096, dated July 7, 1989. “Obsolete” scrap consists of worn-out or discarded metal articles, and “industrial scrap” consists of leftover metal from manufacturing operations performed on metal articles. In HQ 555096, it was determined that in order for scrap to be eligible under the statute where foreign metal is involved, the scrap must be obtained from the processing of foreign metal in the U.S. Furthermore, industrial scrap was found eligible under subheading 9802.00.60, HTSUS, where it resulted from the production of metal tool boxes in the United States. See NY N018085, dated Oct. 26, 2007. In NY N018085, an importer brought aluminum coils from Greece into the United States, where they were cut into sheets and sold to U.S. customers who manufactured them into tool boxes. As a result of the tool box manufacturing process, aluminum scrap was produced, which was sold to the aluminum supplier in Greece where it was melted down and used in the production of aluminum coils to be shipped back to the U.S. The new coils were eligible under subheading 9802.00.60, HTSUS, because the metal article from which the scrap was obtained (the tool boxes) was initially subjected to a process of manufacture in the United States (the cutting of aluminum coils into sheets).
Similarly, the metal article from which the scrap was obtained in this case (the imported copper sheets) was initially subjected to a variety of processes of manufacture in the United States including splitting, annealing, milling, rolling, brushing, and leveling. HQ 560430 is therefore incorrect that “the copper scrap, which is a by-product of the imported metal sheets that were subjected to a manufacturing process in the U.S., does not, itself, meet the subheading 9802.00.60 criteria of being an article of metal which was ‘manufactured in the United States or subject to a process of manufacture in the United States’ before exportation back to Germany to be made into more sheets of copper.”
Accordingly, similar items are eligible for a partial duty exemption so long as the items are returned to the United States for further processing and the documentary requirements of 19 C.F.R. § 10.9 are met.
HOLDING:
The imported copper sheets made from scraps generated from splitting, annealing, milling, rolling, brushing, or levelling imported copper in the United States are eligible for a partial duty exemption under subheading 9802.00.60, HTSUS.
EFFECT ON OTHER RULINGS:
HQ 560430 is hereby revoked. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Joanne Roman Stump
Acting Director, Commercial and Trade Facilitation Division