CLA-2-72:OT:RR:NC:N1:117
Eileen Family
Geodis USA
5101 South Broad Street
Philadelphia, PA 19112
RE: The tariff classification and country of origin of steel coils imported from Turkey
Dear Ms. Family:
In your letter dated July 2, 2019, on behalf of ThyssenKrupp Materials Trading North America, you requested a tariff classification ruling.
The products to be imported are cold-rolled annealed nonalloy steel sheet meeting both ASTM
A 1008 (Grade CS Type B) and ASTM A568 specifications. Imported in coil form, you state that this merchandise will have a width of 1524 mm (tolerance -0/+4 mm) and a thickness of 1.397 mm (tolerance -0/+0.2 mm). According to your submission, full-hard cold-rolled nonalloy steel coils, of Russian origin, are shipped to Turkey where they will be annealed and subsequently exported to the U.S.
The applicable subheading for the steel coils will be 7209.16.0070, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Flat-rolled products of iron or nonalloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated: In coils, not further worked than cold-rolled (cold-reduced): Of a thickness exceeding 1 mm but less than 3 mm: Other: Annealed. The rate of duty will be free.
In addition to classification, you have also inquired as to the country of origin of the subject products. You indicate that the annealing of the steel coils is performed “to eliminate tensions in the crystalline internal structure and subsequently increase formability” and assert that the Russian full-hard cold-rolled coils have not been substantially transformed in Turkey.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements of 19 U.S.C. §1304. Pursuant to 19 CFR 134.1(b), “country of origin” means 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. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character, or use. The U.S. Court of International Trade considered steel sheets which had been annealed and galvanized in New Zealand by a process known as “continuous hot-dip galvanizing” using cold-rolled steel sheet from Japan. See Ferrostaal Metals Corp. v. United States, 664 F. Supp 565 (CIT 1987). In Ferrostaal, the court held that "hot-dip galvanizing" cold-rolled steel sheet substantially transformed the steel sheet. The process involved two steps: annealing, undertaken to restore the steel's ductility lost in previous cold-rolling, and galvanizing, or dipping the steel in molten zinc, thus changing the steel's chemical composition to improve its resistance to rust. It is important to note that the court in Ferrostaal did not hold that either the annealing or the galvanizing alone constituted a substantial transformation, but determined that the multiple manufacturing processes effected the requisite changes necessary for a finding of a substantial transformation. CBP has held that annealing which is not extensive or complex, and does not transform or narrow the uses of the article, is not a substantial transformation. Based on this reasoning and the information provided in your request, this office is of the opinion that a substantial transformation has not taken place in Turkey. As such, we find the country of origin for the cold-rolled annealed nonalloy coils to be Russia.
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 the World Wide Web at https://hts.usitc.gov/current.
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, 7209.16.0070 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 subheadings.
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 April Cutuli at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division