CLA-2-40:OT:RR:NC:N1:101
Julie Vair
Expeditors Tradewin, LLC
1015 Third Ave, 12th Floor
Seattle, WA 98104
RE: The tariff classification and GSP eligibility of steel belted radial tires from Serbia
Dear Ms. Vair:
This letter serves to expand ruling N275641, dated May 13, 2016. In that letter this office did not specify clearly whether the item under consideration was eligible for GSP. Please see corrected letter below.
In your letter dated April 29, 2016, you requested a tariff classification ruling on your client, Cooper Tire & Rubber Company, located in Krusevac, Serbia.
The merchandise under consideration has been identified as three (3) sizes of steel-belted radial tires (14 inch: 185/65R14, 15 inch: 195/60R15 & 16 inch: 205/60R16). The tires are produced at Cooper Tire's facility in Serbia. In your ruling you state that imported raw materials including synthetic rubber, natural rubber, carbon black, various chemicals and processing oil are combined in a mixer and are substantially transformed in the production of a rubber compound, which is a new article of commerce. The rubber compound is then combined with steel reinforcements (steel tire cord and bead wire) and fabric reinforcements to form a desired configuration and then placed in a curing press under pressure and temperature to undergo a second substantial transformation in the form of a finished steel-belted radial tire.
The applicable subheading for the steel-belted radial tires (14 inch: 185/65R14) will be 4011.10.1030, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “New pneumatic tires, of rubber: Of a kind used on motor cars (including station wagons and racing cars): Radial: Having a rim diameter greater than 35.56 cm (14 inches) but not more than
38.10 cm (15 inches)”. The duty rate will be 4%.
The applicable subheading for the steel-belted radial tires (15 inch: 195/60R15) will be 4011.10.1040, HTSUS, which provides for “New pneumatic tires, of rubber: Of a kind used on motor cars (including station wagons and racing cars): Radial: Having a rim diameter greater than 38.10 cm (15 inches) but not more than 40.64 cm (16 inches)”. The duty rate will be 4%.
The applicable subheading for the steel-belted radial tires (16 inch: 205/60R16)) will be 4011.10.1050, HTSUS, which provides for “New pneumatic tires, of rubber: Of a kind used on motor cars (including station wagons and racing cars): Radial: Having a rim diameter greater than 40.64 cm (16 inches) but not more than 43.18 cm (17 inches)”. The duty rate will be 4%.
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 https://hts.usitc.gov/current.
You have also inquired as to whether tires manufactured in Serbia from foreign material and exported to the United States qualify for preferential duty treatment under the GSP. Under the GSP, eligible articles the growth, product or manufacture of a designated beneficiary developing country (BDC) which are imported directly into the customs territory of the U.S. from a BDC may receive duty-free treatment if the sum of (1) the cost or value of materials produced in the BDC, plus (2) the direct costs of the processing operations performed in the BDC, is equivalent to at least 35% of the appraised value of the article at the time of entry. See 19 U.S.C. 2463(b). 19 CFR 10.176, country of origin criteria, provides merchandise produced in a beneficiary developing country or any two or more countries which are members of the same association of countries, generally, may qualify for duty-free entry under GSP upon the article being either wholly the growth, product, or manufacture of, or is a new or different article of commerce that has been grown, produced, or manufactured in the BDC. Under 19 CFR 10.175, eligible articles shall be imported directly from a BDC to qualify for treatment under the GSP. For purposes of 19 CFR 10.175, the words “imported directly” in pertinent part means: at (a) direct shipment from the beneficiary country to the United States without passing through the territory of any other country; at (b) if the shipment is from a BDC to the U.S. through the territory of any other country, the merchandise in the shipment does not enter into the commerce of any other country while en route to the U.S., and the invoice, bills of lading, and other shipping documents show the U.S. as the final destination; and at (d) if the shipment is from any BDC to the U.S. through the territory of any other country and the invoices and other documents do not show the U.S. as the final destination, the articles in the shipment upon arrival in the U.S. are imported directly only if they: (1) remained under the control of the customs authority of the intermediate country; (2) did not enter into the commerce of the intermediate country, except for the purpose of sale other than at retail, and the port director is satisfied that the importation results from the original commercial transaction between the importer and the producer or the latter’s sales agent; and (3) were not subject to operations other than loading and unloading, and other activities necessary to preserve the articles in good condition. See 19 CFR 10.175, a through e, for a complete understanding of the term – imported directly. For purposes of GSP, Serbia is designated as a BDC. The processing of synthetic rubber, natural rubber, carbon black, and oils does result in a new or different article of commerce where the sum cost of the materials plus the direct costs of the processing operations performed in the BDC, is equivalent to at least 35% value content requirement. As such, the finished tires originating in Serbia, and subsequently imported directly into the United States would be eligible for duty-free treatment under GSP. Articles classifiable under subheading 4011.10.1030, 4011.10.1040 and 4011.10.1050, HTSUS, which are products of Serbia may be entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations. The GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check our Web site at www.cbp.gov and search for the term “GSP”.
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 Matthew Sullivan at (646) 733-3013.
Sincerely,
Deborah C. Marinucci
Acting Director
National Commodity Specialist Division