CLA-2 RR:CTF:TCM 968260 BtB
Port Director
U.S. Customs and Border Protection
112 W. Stutsman Pembina, ND 58271
RE: Internal Advice #06-020; Classification of cut to size wood boards from Canada; Not “load boards” of heading 4415, HTSUSA
Dear Port Director:
This is in reference to your correspondence dated June 13, 2006, in which you forwarded a request for internal advice from counsel on behalf of Burrows Lumber (US) Inc. (“Burrows”), dated June 7, 2006, pursuant to section 177.11(b)(2) and 177.11(b)(3) of the Customs and Border Protection (“CBP”) Regulations (19 C.F.R. §§177.11(b)(2) and 177.11(b)(3)). Burrows also forwarded a copy of the request directly to this office that was eventually associated with your correspondence.
At issue is the correct classification of certain cut to size wood boards from Canada under the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”). The cut to size wood boards at issue are the subject of several current transactions at the Port of Pembina, ND. Burrows specifically references four entries in its internal advice request.
In its request for internal advice, Burrows requested that CBP not disclose certain information that Burrows considers to be “confidential commercial or financial information.” Included in this information are the quantities and dimensions of the wood boards at issue. Consequently, we do not specifically reference those quantities and dimensions when describing the wood boards or the articles that Burrows claims are the finished articles that the certain cut to size wood boards at issue are made into after importation into the United States. We have attempted to describe the merchandise at issue as thoroughly as possible without disclosing this confidential information. We also do not reference specific entry information that Burrows requested not be disclosed for the four entries
FACTS:
The merchandise at issue is spruce-pine-fir (“S-P-F”) boards in various dimensions. Each wood board has been invoiced and described by Burrows in various ways (e.g., as “stringer,” load board,” “deckboard”). These descriptions are not consistent. For example, wood boards of a certain size are described in one entry at issue as a “deck board” and in another entry at issue as a “load board.” The boards are not further processed in any way prior to importation into the United States.
In its request for internal advice, Burrows asserts that the merchandise at issue, which it refers to as unassembled “load boards,” is classified pursuant to General Rule of Interpretation 2(a) in subheading 4415.20.8000, HTSUSA, which provides for: “Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums, of wood; pallets, box-pallets and other load boards, of wood; pallet collars of wood: Pallets, box-pallets and other load boards; pallet collars: Other.”
Burrows’ assertion is founded on the claim that the merchandise at issue is load boards “… which are custom-designed based on U.S. customer specifications for use as portable platforms for the handling, storage, and transportation of air conditioning units.” Burrows states: “[e]ach of the entries at issue … comprises custom-sized load board components of specific-dimensions that, when assembled only by nailing, produce an exact number of load boards.”
You forwarded photocopies of photographs and a diagram of what Burrows claims are the finished articles that the certain cut to size wood boards at issue are made into after importation into the United States. The diagram refers to a single finished article as an “AIR CONDITIONER SHIPPING SKID.” The diagram and the photographs show, what can best be described without disclosing confidential information, as a single-decked rectangular-shaped base or frame with a board connecting the top and bottom of the rectangle near its middle. The frame has boards of other sizes nailed to its bottom at specific spots, resulting in spaces for fork entry. The diagram shows the exact dimensions of the 10 boards that Burrows states are used to make a single base or frame.
ISSUE:
What is the classification of the certain cut to size wood boards at issue?
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides, in part, that classification decisions are to be "determined according to the terms of the headings and any relative section or chapter notes." In the event that goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied, in order.
The Harmonized Commodity Description and Coding System Explanatory Notes (“EN”) constitute the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. While neither legally binding nor dispositive of classification issues, the EN provide commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).
Chapter 44, HTSUSA, provides for, among other things, wood and articles of wood. This chapter is structured so that less processed wood appears at the beginning of the chapter followed by more advanced wood in later headings within the same chapter. For example, Heading 4403, HTSUSA, is a general provision for “wood in the rough, whether or not stripped of bark or sapwood, or roughly squared,” and Heading 4421, HTSUSA, is a basket provision for more advanced articles of wood that cannot be classified elsewhere in the chapter. Therefore, as Heading 4407 resides near the beginning of Chapter 44, it reflects coverage of a relatively basic category of lumber products in relation to Heading 4415, which resides closer to the end of the chapter, reflecting coverage of a relatively more advanced category of products. See Headquarters Ruling (“HQ”) 965950, issued February 6, 2003.
The headings under consideration for classification of the merchandise at issue are: Heading 4407, HTSUSA, which provides for: “Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding 6 mm” and Heading 4415, HTSUSA, which provides for: “Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums, of wood; pallets, box-pallets and other load boards, of wood; pallet collars of wood.”
As stated above, Burrows asserts that the merchandise at issue is unassembled load boards pursuant to GRI 2(a), which states:
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. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.
In regard to the pallets, box pallets, and other load boards covered by the heading, the EN to heading 4415, states:
Load boards are portable platforms for the assembly of a quantity of goods to form a unit load for handling, transportation and storage by mechanical appliances.
A pallet is a load board consisting of two decks separated by bearers or a single deck supported by feet and designed essentially for handling by means of fork-lift trucks or pallet trucks. Box pallets have a superstructure of at least three fixed, removable or collapsible vertical sides and designed for stacking with a double-decked pallet or another box pallet.
Platforms, post platforms, collar-type box platforms, side-rail platforms and end-rail platforms are other examples of load boards.
Burrows asserts that the certain cut to size wood boards at issue are classified in heading 4415, HTSUSA, as “unassembled load boards.” We do not agree, finding that what Burrows claims are the complete or finished articles that the certain cut to size wood boards at issue are made into after importation into the United States, are not classified in heading 4415, HTSUSA. Consequently, the certain cut to size wood boards at issue cannot be classified in heading 4415, HTSUSA, as “unassembled load boards” when the completed or finished articles that they are made into (the “assembled articles”) are not classified in heading 4415, HTSUSA.
A review of the EN to the heading illustrates that the assembled articles are not described by the terms of heading 4415 for two specific reasons. First, the load boards described by heading 4415 are “portable platforms.” The applicable definition of platform in this instance is “a usually raised horizontal flat surface.” The assembled articles do not have raised horizontal surfaces. To the contrary, most of the surface area within their rectangular-shaped frames is open space. The load bearing surface of the assembled articles is limited to the rectangular-shaped frame and single connecting board. The assembled articles are not platforms, but frames or bases.
Second, the load boards provided for by heading 4415, are for “… the assembly of a quantity of goods to form a unit load for handling, transportation and storage by mechanical appliances.” “Unit load” is defined as a standard-sized load such as a skid, pallet, container insert, or van pack in which a number of individual packages are bonded, palletized or strapped together to form a single unit for more efficient handling by mechanical equipment. The assembled articles here are not load boards that carry standard-sized unit loads of smaller, individual packages but custom-sized bases or frames for specific pieces of industrial equipment.
Even if the assembled articles were classified in heading 4415, HTSUSA, the cut to size wood boards do not have their essential character. CBP has classified unassembled merchandise in heading 4415, HTSUSA, as having the “essential character” of an assembled or finished article of heading 4415, HTSUSA, pursuant to GRI 2(a) when, using all information available to CBP: (i) the complete or finished article that the merchandise is assembled into is classified in heading 4415, HTSUSA; (ii) the unassembled merchandise consists only of the exact number of components necessary to be assembled into the complete or finished articles and does not require additional processing; and (iii) transactional documentation and information (invoices, purchase orders, diagrams, statements, company information, etc.) support that the merchandise, as imported, is an unassembled article of heading 4415, HTSUSA. See generally HQ 965950, dated February 6, 2003, HQ 965341, dated May 22, 2002, New York Ruling Letter (“NY”) D83315, dated July 16, 1999, NY C89984, dated December 16, 1999, and NY R03401, dated April 8, 2003.
The wood boards at issue in this matter do not meet the criteria set forth above. In regard to criterion (i), the complete or finished articles that the boards are assembled into are not classified in heading 4415, HTSUSA. In regard to criterion (ii) all of the entries at issue do not include the number of components that Burrows claims are necessary to make a complete or finished article in the diagram that it submitted. In regard to criterion (iii), transactional documentation and information does not support that the wood boards at issue are bought and sold as “load boards.” The relevant invoices show inconsistent descriptions, handwritten terms, and most importantly, unit prices based on MBF, the usual commercial unit for buying and selling rough or unfinished lumber in the North American market. If “load boards” were the goods being traded, the price would be based on a unit price for that article, not MBF prices for dimensional lumber.
Burrows extracts several statements from CBP rulings which it believes support its contention that the wood boards at issue are classified in heading 4415, HTSUSA, as load boards. While the statements in the CBP rulings are quoted accurately, the statements apply to the specific set of facts in the rulings in which they appear. We do not agree that these statements, or the rulings in which they appear, support Burrows’ claim in this matter, as there are significant material differences in the factual backgrounds of the transactions involved in this matter and the transactions at issue in the rulings quoted.
For example, Burrows states, “New York Ruling Letter (NY) D83315 (July 16, 1999) confirms that ‘{u}nassembled pallets imported in exact numbers of pieces required to make a specific number of pallets are classifiable in heading 4415.’” That statement is correct as applied to certain “knocked down pallet assemblies” classified in NY D83315. We emphasize, however, that not only were these assemblies imported in exact numbers necessary to be assembled into the complete or finished articles, they also met the other criteria set forth on the previous page of this letter for unassembled merchandise to be classified in heading 4415, HTSUSA. The same is true for the certain 44” x 154” unassembled pallets that were the subject of NY C89984, which Burrows also cites. Burrows also references HQ 965950, stating:
CBP observes in HQ 965950 that the deck boards of a load board are generally thinner than the stringers. However, as the structure of HTSUS 4415 and the ENs make clear, pallets, which typically consist of deck boards and stringers, are only one type of load board. Moreover, nothing in the HTSUS or the ENs imposes any dimensional requirements in classifying load boards. As the ENs recognize and as CBP is surely aware, load boards (including pallets) are produced to a wide range of specifications that depend on specific end uses. There is no basis in U.S. law whatsoever to impose dimensional restrictions in classifying the load boards at issue here.
We generally agree with Burrows statements about the dimensional requirements of load boards classified in heading 4415, HTSUSA. We recognize that load boards may vary in size based on their purpose and emphasize that it is not the claimed dimensions of the assembled articles at issue, but the other reasons set forth earlier in this letter, that lead to our conclusion that the assembled articles are not classified in heading 4415, HTSUSA.
Finally, Burrows states that it is aware of NY R03401 and attempts to differentiate the wood boards at issue in this matter from the wood boards in that ruling. In NY R03401, CBP classified wood boards that the ruling requestor stated were to be used to construct “air conditioner pallets” in heading 4407, HTSUSA, which provides for: “Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm.” In reaching its holding, CBP evaluated photographs of the wood boards after assembly into the described “air conditioner pallets,” as well as available documentation and information regarding relevant transactions for the boards, including quantity and dimension information.
Burrows emphasizes that whereas the wood boards in NY R03401 required additional cutting before assembly into bases, the wood boards at issue in this matter need only be nailed together to form a complete or finished article. We acknowledge this difference between the wood boards in NY R03401 and the wood boards at issue in this matter. Still, however, pursuant to the analysis above, the wood boards in this matter are not classified in heading 4415, HTSUSA.
In its condition as imported, the merchandise at issue is simply boards of unfinished lumber. It is provided for eo nomine by heading 4407, HTSUSA, which provides for: “Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm” and classified in that heading pursuant to GRI 1. As sawn coniferous untreated mixtures of S-P-F exceeding 6 mm, the merchandise is specifically provided for by subheading 4407.10.0015, HTSUSA.
HOLDING:
The certain cut to size wood boards at issue are classified in subheading 4407.10.0015, HTSUSA, which provides for: “Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm: Coniferous, Other: Not treated: Mixtures of spruce, pine, and fir (‘S-P-F’).” The general (column one) rate of duty under the 2006 HTSUSA is “Free.” Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUSA and the accompanying duty rates are provided on the world wide web at www.usitc.gov.
The merchandise in question may be subject to antidumping duties and/or countervailing duties. A list of AD/CVD proceedings at the Department of Commerce (“DOC”) and their product coverage can be obtained from the DOC website at: http://ia.ita.doc.gov, or you may write to them at the U.S. Department of Commerce, International Trade Administration, Office of Antidumping Compliance, 14th Street and Constitution Avenue, N.W. Washington, DC 20230. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by CBP.
You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other means of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division