CLA-2-81:OT:RR:NC:N1:116
Mr. Joseph Dion
Norsk Titanium
44 Martina Circle
Plattsburgh, NY 12901
RE: The classification and country of origin of a titanium “substrate”
Dear Mr. Dion:
In your letter dated February 9, 2023, you requested a tariff classification and a country of origin ruling determination for marking purposes for a titanium “substrate.”
The merchandise under consideration is described as a titanium “substrate” that will be used as a base for 3D additive wire printing of an “NXT Carrier Tray.” You state that a generic titanium plate of Chinese origin is imported into Norway and measures 1600 mm by 1200 mm and will be either 40 mm thick or 25.4 mm thick.
In China, titanium is melted into an ingot, then forged and pressed into a slab. The titanium slab is then hot-rolled and exported to Norway as a simple titanium plate. After receipt in Norway, the plate is water jet cut to 760 mm x 560 mm, which is the length and width required for printing in the United States (U.S.). Holes are then drilled in the four corners of the plate. You state the holes serve two purposes:1) to facilitate the handling of the plate during all phases of production as points of attachment for mechanical lifting equipment; and 2) post-production locating, or indexing, holes during machining operations.
You have suggested classification of the titanium plate in subheading 8108.90.3060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for titanium and articles thereof, including waste and scrap: other: articles of titanium: other. We disagree. The cutting and drilling does not change the article from a titanium plate to an article of titanium. The appropriate subheading for the titanium “substrate” will be 8108.90.6045, HTSUS, which provides for titanium and articles thereof, including waste and scrap: other: other: plates, sheets, strips and foil. The rate of duty is 15 percent ad valorem.
You have also requested a country of origin determination. 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.
The courts have held that 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). 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). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
The operations performed in Norway consist of cutting the plate in half and drilling holes in the four corners. This office considers these processes to be minor, leaving the titanium plate with the same name, character, and use. As such, it is the opinion of this office, that the cutting and drilling processes performed in Norway do not result in a substantial transformation and the country of origin is China.
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. The marking will be 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. Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. In general, as provided at 19 C.F.R. 134.1, the country of origin of an article is the country in which it was manufactured, produced, or grown. Additional processing, manufacture, 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. See 19 C.F.R. § 134.1(b). Section 134.33, Customs Regulations (19 CFR 134.33), lists certain articles designated as “J-List” exceptions from the country of origin marking requirement. As metal plates are indicated to be a “J-List” exception to the marking statute, the titanium plates at issue are exempted from being marked with a country of origin. However, the outermost container in which the plate is imported must be marked to indicate the country of origin. In addition, if the plates are to be repacked in new containers after release from Customs custody, the certification requirements set forth in section 134.25, Customs Regulations, apply.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8108.90.6045, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8108.90.6045, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas
/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301
-certain-products-china respectively.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
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.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Angelia Amerson at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division