OT:RR:CTF:CPMMA H325770 AJK
Center Director
Petroleum, Natural Gas, and Minerals
Center of Excellence & Expertise
U.S. Customs and Border Protection
2350 N. Sam Houston Pkwy E. #900
Houston, TX 77032-3100
Attn: Violetta Grygorcewicz, Supervisory Import Specialist
RE: Application for Further Review of Protest No. 5309-22-100549; Classification of
Steel Umbilical Tubing and Applicability of Exclusions from Section 232 Duties
Dear Center Director:
This is in reply to the Application for Further Review (AFR) of Protest No. 5309-22-100549, filed on April 19, 2022, on behalf of Oceaneering International, Inc. (Protestant), contesting U.S. Customs and Border Protection’s (CBP) liquidation of two types of steel umbilical tubing. The subject merchandise was entered on April 21, 2021, and claimed exclusion from additional duties under Section 232 of the Trade Act of 1974 (Section 232). The steel umbilical tubing with an external diameter of less than 19 mm was classified in subheading 7304.41.30, HTSUS, which provides for “Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: Other, of circular cross section, of stainless steel: Cold-drawn or cold-rolled (cold-reduced): Of an external diameter of less than 19 mm.” The subject merchandise with an external diameter of more than 19 mm was classified in subheading 7304.41.60, HTSUS, which provides for “Tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: Other, of circular cross section, of stainless steel: Cold-drawn or cold-rolled (cold-reduced): Other.” CBP, however, rejected Protestant’s claim for exclusion from Section 232 duties and liquidated the subject entry on January 14, 2022.
Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) and (3) as a decision on the classification and rate and amount of duties chargeable, and all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury. See also 19 C.F.R. §§ 174.11(b)(2), (3). The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, §§ 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further review of Protest No. 5309-22-100549 is properly accorded pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed is alleged to involve a question of law or fact that has not previously been ruled upon by CBP or the courts.
In support of the protest, Protestant alleges that the subject liquidation of steel umbilical tubing was inconsistent with the Department of Commerce (DOC) Bureau of Industry and Security’s (BIS) approval of Protestant’s request for exclusion from Section 232 duties. On July 20, 2020, Protestant submitted two requests for exclusions from Section 232 duties: (1) Exclusion Request No. 113189, concerning “seamless superduplex stainless steel coiled tubing, cold rolled, having an external diameter of less than 19mm”; and (2) Exclusion Request No. 113192, concerning “[s]eamless superduplex stainless steel coiled tubing, cold rolled, having an external diameter of over than 19mm.” On September 4, 2020, DOC granted the two exclusion requests. Accordingly, Protestant claimed exclusion from Section 232 duties for its subject entry on April 21, 2021. CBP, however, rejected Protestant’s claim for exclusions because the dimension of the subject merchandise did not fall within the range of values submitted in the exclusion requests. Thus, Protestant contends that CBP misinterpreted the exclusion that was granted by DOC and that the trace amount of tungsten should not affect the applicability of the exclusion. We agree. The presence of tungsten does not affect the classification of the subject steel umbilical tubing. In addition, the classification of the merchandise is not at dispute.
In regard to the exclusion issue, the U.S. note 16 to subchapter III, chapter 99, HTSUS, which governs the iron or steel products’ applicability of exclusions from Section 232 duties, states as follows:
(c) The Secretary of Commerce may determine and announce any exclusions from headings 9903.80.01 and 9903.80.03, and subheadings 9903.80.05 through 9903.80.58 and 9903.81.25 through 9902.81.78, inclusive, that may be appropriate for individual derivative iron or steel products or individual iron or steel products otherwise covered by subdivision (a)(ii) or subdivision (b) of this note, respectively, for individual shipments thereof, whether or not limited to particular quantities of any such goods or shipments, and shall immediately convey all such determinations to U.S. Customs and Border Protection (“CBP”) for implementation by CBP at the earliest possible opportunity, but not later than five business days after the date on which CBP receives any such determination from Commerce. Pursuant to subheadings 9903.80.60, 9903.80.61, and 9903.80.62 and superior text thereto, the Secretary may provide that any excluded product shall be granted entry into the customs territory of the United States when the applicable quantitative limitation has filled for the specified period for such good.
Accordingly, when determining whether Section 232 exclusion is applicable to a specific entry, the description provided in the DOC’s exclusion grant letter—which contains the Secretary of Commerce’s determination and announcement of exclusions—controls. In the instant case, both exclusion grant letters specifically incorporate by reference Protestant’s Exclusion Request Nos. 113189 and 113192 by stating that “[t]his exclusion is granted for the merchandise described in the exclusion request and classified in the 10-digit provision of the Harmonized Tariff Schedule of the United States (HTSUS) claimed in the exclusion request.” To determine the applicability of Section 232 exclusions, CBP reviews the product description, including the range of product specifications, as described in the exclusion request, and compares it with the product information submitted by the importer. Specifically, in cases involving steel products that are classifiable in heading 7304, HTSUS, the importer is required to submit a mill analysis or mill test certificate. In the instant case, CBP compared the product specifications of the subject merchandise as stated in the exclusion requests and mill test certificates and found that the actual outside diameter of the products-at-issue do not fall within the submitted range of specifications in the exclusion requests. Thus, the subject entry is not eligible for Section 232 exclusions due to the discrepancy of the outside diameters.
Therefore, although the subject steel umbilical tubing with an outside diameter of 11.93 mm is properly classified in subheading 7304.41.30, HTSUS, it is not excluded from Section 232 duties pursuant to the Exclusion Request No. 113189, which applies to the entry of “[s]eamless superduplex stainless steel coiled tubing, cold rolled, having an external diameter of less than 19mm.” Similarly, the subject steel umbilical tubing with an outside diameter of 21.95 mm, which is properly classified in subheading 7304.41.60, HTSUS, is not excluded from Section 232 duties pursuant to the Exclusion Request No. 113192, which applies to the entry of “[s]eamless superduplex stainless steel coiled tubing, cold rolled, having an external diameter of over than 19mm.”
You are instructed to DENY the protest. In addition, you are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division