CLA-2-72:OT:RR:NC:N1:117
Elizabeth T. Gutmann
Savino Del Bene USA, Inc.
149-10 183rd Street
Jamaica, New York 11413
RE: The tariff classification and country of origin of certain welding wire imported from Italy
Dear Ms. Gutmann
In your letter dated April 29, 2020, on behalf of your client Elbor SPA, you requested a tariff classification ruling.
The merchandise under consideration is type ER70S-6/ER70S-3 silico-manganese steel welding wire. According to your submission, irregularly wound Brazilian made wire rod is shipped to Italy. Here, the 5 mm rod will undergo a 3 step wire production process which includes stretching and drawing, cleaning and spooling. Upon completion, the resulting welding wire will measure from .60 mm - 1.60 mm in diameter and be wound in a spirally oscillated manner.
Throughout your submission, you repeatedly stress the importance of the cooling and annealing operations performed upon the steel in Brazil. The cooling is stated to impart the necessary tensile and yield strengths for welding material, while the annealing softens the steel before the rod is reduced in cross-section via drawing.
The applicable subheading for the welding wire will be 7229.20.0090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Wire of other alloy steel: Of silico-manganese steel: Other. The rate of duty will be free.
In addition to classification, you have inquired as to the country of origin of the wire. 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 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. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
In Superior Wire v. United States, 867 F.2d. 1409 (Fed. Cir. 1989), the Court of Appeals for the Federal Circuit affirmed the determination of the Court of International Trade (CIT) that drawing wire from wire rod was not a substantial transformation. The Court held that because the properties of the wire were predetermined by the chemical content of the rod and the cooling process used in its manufacture, the character of the final product was predetermined and the processing did not result in a significant change in either character or use of the imported material. The Court found that the wire drawn from the rod was not a new and different product, but was instead the last stage in the processing operation. Thus, the Court concluded that there was no substantial transformation.
Noting past precedent and the scenario presented above, we are of the opinion that the welding wire, despite having been drawn from wire rod, does not undergo a substantial transformation in Italy. As such, we find the country of origin of the subject product to be Brazil.
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 subheadings 7229.20.0090, 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.
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.
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