CLA-2-76:OT:RR:NC:N1:116
Ms. Sheri G. Lawson
Willson International Inc.
160 Wales Avenue, Ste. 100
Tonawanda, New York 14150
RE: The tariff classification, country of origin, status under the United States-Mexico-Canada Trade Agreement (USMCA) of aluminum extrusions and Applicability of Section 232
Dear Ms. Lawson:
In your letter dated June 13, 2022, submitted on behalf of your client, Samuel, Son & Co. (USA) Inc., you requested a tariff classification and a country of origin ruling for aluminum extrusions. Also, you inquire whether the aluminum extrusions are eligible for duty free treatment under the United States-Mexico-Canada (USMCA) Trade Agreement and if Section 232 additional duties are applicable.
The products under consideration are aluminum extrusions/profiles. You indicate that the extrusions/profiles are made from aluminum alloy types 6063, 6061 and 6005 and are intended to be manufactured into window frames. However, you state that this may be subject to change due to market and other conditions.
According to your submission, aluminum alloy billets from South Korea, Australia, Canada, India, Russia, China or other source countries are imported into Mexico. The billets range from 6 to 9 inches in diameter and from 20 to 228 inches in length. In Mexico, the logs/billets are initially cut/trimmed to the desirable length if needed, heated, extruded, cut to the requested length per customer specifications, anodized, painted, inspected, packaged and then shipped to the United States (U.S.). You state that some of the profiles will be hollow, and others will not (i.e., open construction) and that the dimensions will vary due to shape, end use and customer specifications.
The applicable subheading for the hollow aluminum extrusions/profiles having one enclosed void will be 7604.21.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for aluminum bars, rods and profiles: of aluminum alloys: hollow profiles: heat-treatable industrial alloys of a kind described in statistical note 6 to this chapter. The rate of duty will be 1.5 percent ad valorem.
The applicable subheading for the aluminum extrusions/profiles that are not hollow (i.e., open construction) will be 7604.29.1010, HTSUS, which provides for aluminum bars, rods and profiles: of aluminum alloys: other: other profiles: heat-treatable industrial alloys of a kind described in statistical note 6 to this chapter. The rate of duty will be 5 percent ad valorem.
USMCA
You inquire whether the extrusions/profiles are eligible for preferential treatment under the USMCA. The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11, HTSUS, implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA.
GN 11(b) states, in relevant part:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country … is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
(i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
(iii) the good is a good produced entirely in the territory of one or more USMCA countries using non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); ….
The subject extrusions/profiles are comprised of non-originating material. Therefore, the extrusions/profiles are not considered goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and (ii). We must next determine whether the extrusions/profiles qualify under GN 11(b)(iii). The imported extrusions are classified in heading 7604, HTSUS. The applicable rule of origin for merchandise classified in heading 7604, HTSUS, is in GN 11(o), HTSUS, which provides, in relevant part:
Chapter 76 (4) “A change to heading 7604 from any other heading.” Aluminum billets classified in heading 7601, HTSUS, are sent to Mexico where they are manufactured into aluminum extrusions/profiles classified in heading 7604, HTSUS. As such, the tariff shift requirement is met, and the extrusions/profiles would be considered originating goods and eligible for preferential treatment under the USMCA.
Country of Origin
In addition to USMCA eligibility, you are requesting a country of origin determination for the subject extrusions/profiles for marking purposes. The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
The "country of origin" is defined in 19 CFR 134.1(b) as “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” within the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin.”
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11. Applied in sequential order, the required hierarchy establishes that the country of origin of a good is the country in which:
(a)(1) The good is wholly obtained or produced;
(a)(2) The good is produced exclusively from domestic materials; or
(a)(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in the cases described above because the imported aluminum extrusions are neither wholly obtained or produced or produced exclusively from “domestic” materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). Pursuant to 19 C.F.R. §102.11(a)(3), the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 C.F.R. §102.20 and satisfies any other applicable requirements of that section.
Based on the facts presented, because the aluminum extrusions/profiles imported into the U.S. from Mexico are classified in heading 7604, HTSUS, the change in tariff classification must be made in accordance with section 102.20(n), Section XV: Chapters 72 through 83, heading 7601 - 7604, HTSUS, which requires “A change to heading 7601 through 7604 from any other heading, including another heading within that group.” The aluminum alloy billets that are shipped to Mexico are classified in heading 7601, HTSUS. In Mexico, the billets are manufactured into aluminum extrusions/profiles classified in heading 7604, HTSUS. As such, the tariff shift requirement of section 102.11(a)(3) is met. The country of origin of the aluminum extrusions/profiles for marking purposes is Mexico.
Applicability of Section 232 Duties
Please be advised when determining the country of origin for purposes of applying trade remedies under Section 301, Section 232 and Section 201, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use, different from that possessed by the article prior to processing. This determination is based on the totality of the evidence. See Texas Instruments, Inc. v. United States, 681 F.2d 778 (CCPA 1982).
Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
Based on the information provided, aluminum alloy billets are sent to Mexico where they are made into a new product, namely aluminum extrusions/profiles. This office finds that the operations performed in Mexico result in a substantial transformation. As such, the country of origin of the subject extrusions will be Mexico. Products of Mexican origin are excluded from Section 232 trade remedy duties.
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