CLA-2-84:OT:RR:NC:1:120
Mr. Timothy Guinan
Coffin World Water Systems
1732 McGaw Avenue
Irvine, CA 92614
RE: The tariff classification of oily water separators from Vietnam
Dear Mr. Guinan:
In your letter dated August 9, 2010 you requested a tariff classification ruling.
The Ultra-Sep® Oily Water Separators, product numbers US5000, US1000-C and US500-C, are designed for use in the marine industry to remove free and emulsified oils from bilge water. The process involves two stages (1) Stage 1 - system generated vacuum, differential specific gravity and a high efficiency two stage coalescer removes the majority of free oil and dirt and (2) Stage 2 - (a) micron filtration for removal of trace solids and small oil droplets and (b) ultra-filtration to remove emulsified oils, minute solids and entrained air. The first stage utilizes a Heli-Sep® coalescing separator (honeycomb PVC matrix, polypropylene beads and 5 micron bag filter) and the second stage uses Spir-o-lator® membrane separation. An increase in pressure will cause a reduction in the speed of the particles drawn along with the oil.The Ultra-Sep® membrane technology utilized by the models produces water to purity of 15ppm or less oil content. The recovered concentrated oil waste is sent to the sludge tank while the water can be discharged overboard.
The Heli-Sep® is a honeycomb PVC matrix that causes free oil to coalesce to the top of the Heli-Sep® tank. Polypropylene beads which are stored in a chamber within the Heli-Sep® tank polish smaller free oil particles. In addition, each model contains an oleophillic matrix packing to filter which is incorporated in the first stage, Heli-Sep® portion of the process. It functions as a baffle and is made of a honeycomb design. The Spir-o-lator® features a polyacrylonitrile membrane at .01 micron that serves as the final process in the separation of oil from water in the Ultra-Sep® system. The membrane is housed in an FRP enclosure and is 4” in diameter X 40” long. The Heli-Sep® functions as a baffle while the Spir-o-lator® membrane serves as a positive physical barrier. There is no activated carbon element in the Ultra-Sep® systems.
The Ultra-Sep® 5000 oily water separator system has a larger capacity system than the US500-C and US1000-C. The “C” designation indicates a “compact” model. While US5000 utilizes the same design function as the US500-C and US1000-C systems, the US5000 differs from the other two models in that it also features programmable controls and an automatic cleaning (dosing) system. The automatic cleaning system (“Auto-Clean”) functions as a dosing mechanism that offers a hands free membrane cleaning regimen. It is comprised primarily of a of a 10 gallon tank for cleaning solution and storage and a 0.1hp injection pump. The cleaning solution is injected into the process (bag) filter and is then moved through the membrane from the pressure developed by the US5000 10hp process pump.
All the components of each model are mounted on one skid at time of importation.
In your letter, you suggest that the models be classified in subheading 8421.29.0015, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof: Filtering or purifying machinery and apparatus for liquids: Other …Other: Oil-separation equipment. The classification of merchandise under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUSA, 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 …". Once the heading is resolved, the proper subheading must then be determined.
According to GRI 6, HTSUS, goods must meet the terms of the subheading and the legal notes under GRI 1 just as they must for the headings. GRI 6 is used to determine in which subheading the systems fall to be classified. GRI 6 permits the comparison of same-level subheadings. Thus, consideration must be given to the one-dash subheading level first. Only if a system is not found to be classifiable under a specific subheading does one proceed to comparisons at the two-dash level.
This office does not dispute that the applicable heading is heading 8421, HTSUS. The subheadings under consideration are as follows:
8421.21.00, HTSUS, which provides for Filtering or purifying machinery
and apparatus for liquids: For filtering or purifying water
8421.29.00, HTSUS, which provides for Filtering or purifying machinery
and apparatus for liquids: Other
As per GRI 3(a), “The heading which provides the most specific description shall be preferred to headings providing a more general description." Applying this note at the subheading level, it is apparent that subheading 8421.21.00, HTSUS, is the most specific description. Thus, there is no need to proceed to the two-dash subheading level. In addition, while the systems are primarily designed to remove oil, solids/dirt and air are also removed.
Applying GRI1, via GRI 6, the applicable subheading for the Ultra-Sep® Oily Water Separators, product numbers US5000, US1000-C and US500-C will be 8421.21.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof: Filtering or purifying machinery and apparatus for liquids: For filtering or purifying water. The duty rate will be free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
In your letter, you also request a binding ruling regarding the country of origin of the Ultra-Sep® Oily Water Separators, product numbers US5000, US1000-C and US500-C assembled in Vietnam from domestic and foreign components
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. "Country of origin" is defined in section 134.1(b), Customs Regulations (19 CFR 134.1(b)), as
The country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of this part.
A substantial transformation occurs “when an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing.” See Texas Instruments, Inc. v. United States, 69 C.C.P.A. 152, 681 F.2d 778 (1982) (cited with approval in Torrington Co. v. United States, 764 F. 2d 1563, 1568 (1985)). The issue of whether a substantial transformation occurs is determined on a case by case basis. . In order for this office to make this determination, please explain the following:
As shipped to Vietnam, the components are not in a semi-assembled condition. Rather, you indicate that the shipment consists of ‘a “kit” of individual components sufficient for the assembly of a single complete Ultra-Sep® Bilge Water Separator”. Yet, the tank, i.e., the Heli Sep Separator, is said to be one of the articles manufactured in Vietnam. It is not part of the “kit”. If the separator itself is not included in the “kit”, how can the “kit” be said to contain sufficient components to comprise a complete separator? Can any of the three systems perform its filtering function without the separator?
When this information is available, you may wish to consider resubmission of your request on the country of origin issue. We are returning any related samples, exhibits, etc. If you decide to resubmit your request, please include all of the material that we have returned to you.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Denise Faingar at (646) 733-3010.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division