CLA-2-73:OT:RR:NC:N5:116
Harold Jackson
Roberts & Kehagiaras LLP
2339 Commerce St.
Houston, Texas 77003
RE: The tariff classification and country of origin of bulkhead assemblies
Dear Mr. Jackson:
In your letter dated February 10, 2025, you requested a tariff classification and country of origin determination ruling on behalf of your client, ITP SA.
The products under consideration are identified as two types of bulkhead assemblies: (1) the 36% Nickel Alloy Bulkhead Assembly (“36NiFe Bulkhead Assembly”) and (2) the Low-Temperature Carbon Steel Bulkhead Assembly (“LTCS Bulkhead Assembly”). You state that the bulkhead assemblies are a type of cryogenic insulated pipeline system which consists of pipe in an insulated pipe-in-pipe (PIP) pipeline system.
The 36NiFE Bulkhead Assembly consists of a cold-rolled longitudinally welded inner pipe with an outside diameter (OD) of 865.2 mm, a cold-rolled welded outer pipe with an OD of 1018 mm, a cold-rolled welded outer pipe sleeve with an OD of 1168.4 mm, concentric reducers, all of which are made from Invar 36% nickel alloy steel, steel transition pieces, Izoflex® pipes, and a stainless steel Inline Bulkhead. Based on the information provided, the nickel alloy pipes predominate by weight over the other components.
The LTCS Bulkhead Assembly is comprised of a cold-rolled longitudinally welded inner pipe made from Invar 36% nickel alloy steel with an OD of 712.8 mm, a cold-rolled longitudinally welded outer pipe with an OD of 863.6 mm, a cold-rolled longitudinally welded outer pipe sleeve with an OD of 1016 mm, concentric reducers, all of which are made from carbon (nonalloy) steel, steel transition pieces, Izoflex® pipes, and pipes and an Inline Bulkhead made of stainless steel. You indicate that the nonalloy steel components (i.e., outer pipes, concentric reducers, and outer pipe sleeve) account for over 52% of the total weight of the LTCS Bulkhead Assembly.
The applicable subheading for the 36NiFe Bulkhead Assembly will be 7305.31.6090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other tubes and pipes (for example, welded, riveted or similarly closed), having circular cross sections, the external diameter of which exceeds 406.4 mm, of iron or steel: other, welded: longitudinally welded: other: of alloy steel, other. The rate of duty will be free.
The applicable subheading for the LTCS Bulkhead Assembly will be 7305.31.4000, HTSUS, which provides for other tubes and pipes (for example, welded, riveted or similarly closed), having circular cross sections, the external diameter of which exceeds 406.4 mm, of iron or steel: other, welded: longitudinally welded: other: of iron or nonalloy steel. 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/.
You have asked for a country of origin determination for purposes of marking and for purposes of the applicability of a trade remedy or trade program. Regarding the country of origin for marking purposes, Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States 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 United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940).
Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 CFR 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” 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 the marking laws and regulations.
A substantial transformation occurs when, as a result of manufacturing process, a new and different article emerges, having a distinct name, character or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process. See United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940).
According to your submission, the bulkhead assemblies, which are made from multiple components from various countries, are shipped to Italy where the following operations are performed: 1) The inner transition pieces and inner pipe sections will be welded to the bulkhead forged piece and then insulated with Izoflex® and stainless-steel sheet; 2) Next, the outer transition piece and outer pipe sections will be welded to the Bulkhead forged piece; 3) The above components will then be inserted into the sleeve outer pipe and concentric reducers will be welded onto the ends of the sleeves; and 4) Afterwards, the full bulkhead assembly will be coated.
The pipes, concentric reducers, transition pieces, etc. are sent to Italy where they are assembled into the final product (bulkhead assemblies). It is the opinion of this office that the assembly operations, welding, and the coating undertaken in Italy do not result in a substantial transformation in which a new product emerges having a different use. We find that the essential character of the 36NiFe Bulkhead Assembly is the nickel alloy steel pipes of German origin which predominate by weight over the other bulkhead components. As such, we find that the country of origin for the 36NiFe Bulkhead Assembly for marking purposes is Germany. Regarding the LTCS Bulkhead Assembly, we find that the essential character is imparted by the nonalloy steel pipes from the United Kingdom which predominate by weight over the other components that make up the assembly. Therefore, we find that the country of origin of the LTCS Bulkhead Assembly for marking purposes is the United Kingdom.
When determining the country of origin for purposes of applying current trade remedies under Section 232, as appropriate, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. 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. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
As stated above, this office finds that the operations performed in Italy do not result in a substantial transformation. The components are shipped to Italy where they undergo a simple assembly process and then the final product is coated. Since a substantial transformation does not take place, it is the opinion of this office that the country of origin for purposes of the applicability of trade remedies should be determined by the essential character of each bulkhead assembly which is imparted by the steel pipes, i.e., the nickel alloy steel pipes of German origin for the 36NiFe Bulkhead Assembly and the nonalloy steel pipes from the United Kingdom for the LTCS Bulkhead Assembly. As such, we find that the country of origin for purposes of applying trade remedies for the 36NiFe Bulkhead Assembly is Germany and the country of origin for purposes of applying trade remedies for the LTCS Bulkhead Assembly is the United Kingdom.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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