CLA-2-84:OT:RR:NC:1:102
Mr. Robert G. Gaydo
Deringer Logistics Consulting Group
6930 Metroplex Drive
Romulus, MI 48174
RE: The tariff classification of pipe assemblies both with and without valves attached from China
Dear Mr. Gaydo:
In your letter dated February 25, 2015 on behalf of your client Trican Well Services, Ltd., you requested a tariff classification ruling.
The products you intend to import are two different seamless pipe assemblies used in the industry of oil recovery. The assemblies are intended to be attached to a trailer after importation by clamping the unit to a trailer. The first seamless pipe assembly would require the attaching of valves to the assembly after importation. The second assembly would be imported with the valves already attached.
The assembly without the valves attached is assembled in Canada from steel pipe, elbows, fittings and steel plate mounts sourced from various countries. The pipe is imported to Canada from China. The assembly is described as consisting of various lengths and sizes of seamless pipe with various fittings welded onto pipes forming a complete suction manifold assembly. The main pipe used in the assembly is schedule 80, shown in mill certificates to be made to API 5L and ASTM 106 specifications. It has an outside diameter of 273.10 mm and a wall thickness of 15.09 mm. Mill certificate chemical analyses show the pipe to be nonalloy steel.
In your submission you have described the assembly as an identifiable article designed specifically for use on a suction trailer according to client’s specifications. You further state that there is no other use for the assembly. In view of these statements, this office did consider if classification in heading 8716, Harmonized Tariff Schedule of the United States (HTSUS) was appropriate. The Harmonized Commodity Description and Coding System Explanatory Notes ("ENs") constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The EN to heading 87.16, i.e., “VEHICLES FITTED WITH MACHINERY” provides guidance in the classification of trailers with permanently built-on machines or appliances. The essential character of the whole must be established in order to determine the proper classification. Units which derive their essential character from the machine or appliance which they incorporate are classified in the respective classification of that machine/appliance.
In this case the essential character, in its condition as imported is imparted by the pipe in the pipe assemblies without valves and by the valves in the assemblies with valves. This office would consider the pipe assemblies without valves as pipe spools. Historically, pipe spools without valves which are lengths of pipe connected by fittings have been classified as pipe.
The applicable subheading for the pipe assembly or pipe spools without valves will be 7304.19.1060, HTSUS, which provides for tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: other, of iron or nonalloy steel, having an outside diameter of 215.9 mm or more but not exceeding 406.4 mm, having a wall thickness of 12.7 mm or more. The rate of duty will be free.
In addition to the seamless pipe, elbows, fittings and steel plate mounts, the second suction manifold assembly is said to contain 36 Keystone butterfly valves at importation. The butterfly valves are designed to be actuated manually and contain a closing mechanism that takes the form of a disc, which rotates 90 degrees. The valves come in three different diameters, e.g., 12 inches, 10 inches and 6 inches and the body of the valve is constructed of cast iron. The valve stem is made of steel. Information provided describes the suction manifold assembly with valves as an assembly that controls and directs the flow of chemicals or fluids to and from oil equipment, such as FRAC pump units.
Headquarters ruling 963219, dated February 5, 2001, addresses a gas manifold system consisting of precision tubing, valves and other electrical components. The function of the gas manifold system is to adjust gas flow. Based on the functionality, CBP determined that the gas manifold assembly was an article of heading 8481, HTSUS. In this case, the assembly with valves directs and controls the flow of chemicals or fluids, as such, in accordance with GRI 1, the applicable subheading for the second suction manifold assembly with valves will be 8481.80.3030, HTSUS, which provides for Taps, cocks, valves and similar appliances, for pipes, boilers, shells, tanks, vats or the like….hand-operated; of iron or steel; of iron; butterfly type. The rate of duty will be 5.6 percent ad valorem.
In addition, you have requested a country of origin determination in view of the import of components into Canada and the work performed in Canada.
Section 102.11 of the Customs Regulations (19 CFR 102.11), sets forth the required hierarchy for determining country of origin of goods from NAFTA countries. Section 102.11(a) of the Customs Regulations states that, "[t]he country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied."
The requirements of CR 102.11 (a), (1) and (2) are not applicable since the pipe spools are neither wholly obtained nor produced exclusively from domestic materials. The requirement of CR 102.11 (a) (3) has also not been met. CR 102.20 for headings 7301-7307 requires a change to heading 7301 through 7307 from any other heading, including another heading within that group. The Chinese pipe incorporated into the spool has not undergone the required tariff shift.
Therefore, since 102.11 (a) has not been satisfied the next level is Section 102.11(b) which states that “Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3 where the country of origin cannot be determined under paragraph (a) of this section:
(1)The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good.
It is the opinion of this office that the pipe is the material that imparts the essential character to the subject pipe spools and that country of origin is China in accordance with Section 102.11(b)(1).
In regards to the assembly with valves, the valves impart the essential character. However, your letter states that the raw materials of the assembly, to include the valves, are sourced from various countries and does not indicate the specific country of origin for the valves. As such, this office is unable to determine the country of origin of the second pipe assembly.
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/.
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 Sandra Martinez at [email protected] for the pipe spools with valves and National Import Specialist Mary Ellen Laker at [email protected] for the pipe assemblies without valves.
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division