CLA-2-73:OT:RR:NC:N1:117
Ms. Cecelia A. Rothrock
Crane Worldwide Logistics, LLC
1500 Rankin Road
Houston, TX 77073
RE: The tariff classification and country of origin determination of tubes from Mexico
Dear Ms. Rothrock:
In your letter dated December 12, 2018, you requested a tariff classification and country of origin determination on behalf of your client, Riley Power, A Babcock Power, Inc. Company.
The product to be imported is identified as “u-bend tubing and other cold/hot bend tubing” used to replace fatigued sections of tubing in existing super heater assemblies for super-heated water boilers. The tubes are manufactured in Romania and exported to Mexico in 30-foot straight lengths. The alloy steel tubing is cold-drawn, seamless, and manufactured to SA-213 T22 standards, making it suitable for use in boilers, superheaters, heat exchangers, condensers, refining furnaces and feedwater heaters. Prior to export to Mexico, the tubing undergoes NDE examinations and is either hydrostatic tested, eddy current tested, or ultrasonic tested. In Mexico, the straight tubing is cut to specific lengths and configured to specific bends. Riley Power then sells the tubing to multiple clients including utilities, municipalities, industrial plants, waste-to-energy plants, refineries, and pulp and paper facilities.
You suggest classification in 8402.90.0090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for steam or other vapor generating boilers (other than central heating hot water boilers capable also of producing low pressure steam); super-heated water boilers; parts thereof: parts: other. This office disagrees.
Although the u-bent tubing will be used with super heater assemblies for super-heated water boilers, they are not identifiable articles. As such, they are excluded from being classified in 8402.90.
The applicable subheading for the tubes will be 7304.51.5045, HTSUS, which provides for tubes, pipes and hollow profiles, seamless, of iron (other than cast iron) or steel: other, of circular cross section, of other alloy steel: cold-drawn or cold-rolled (cold-reduced): other: other: suitable for use in boilers, superheaters, heat exchangers, condensers, refining furnaces and feedwater heaters: other. The rate of duty 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 at https://hts.usitc.gov/current.
You have also requested a country of origin determination, specifically whether the processing in Mexico has resulted in a substantial transformation. A substantial transformation occurs when an article emerges from a process with a new name, character, and use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and National Juice Products Ass’n v. United States, 628 F.Supp. 978 (Ct. Int’l Trade 1986).
In Mexico, the tubing is inspected and cleaned. The tubing is also cut and bent to clients’ specifications. You have stated “[t]he final product has become a specific bend, with a specific length, as a component for existing operating super heater assembly circuits.” Customs has held that in general, cutting or bending materials to defined shapes or patterns suitable for use in making finished articles, as opposed to mere cutting to length or width which does not render the article suitable for a particular use, constitutes a substantial transformation. As the u-bend tubes have been cut and bent to meet client specifications for a finished product, we find the processing in Mexico does effect a substantial transformation, making Mexico the country of origin of the finished product.
On March 8, 2018, Presidential proclamations 9704 and 9705 imposed additional tariffs and quotas on a number of steel and aluminum mill products. Exemptions have been made on a temporary basis for some countries. Quantitative limitations or quotas may apply for certain exempted countries and can also be found in Chapter 99. Additional duties for steel of 25 percent and for aluminum of 10 percent are reflected in Chapter 99, subheading 9903.80.01 for steel and subheading 9903.85.01 for aluminum. Products classified under subheading 7304.51.5045, HTSUS, may be subject to additional duties or quota. At the time of importation, you must report the Chapter 99 subheading applicable to your product classification in addition to the Chapter 72, 73 or 76 subheading listed above.
The Proclamations are subject to periodic amendment of the exclusions, so you should exercise reasonable care in monitoring the status of goods covered by the Proclamations and the applicable Chapter 99 numbers.
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 Angelia Amerson at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division