CLA-2-81:RR:NC:1:118 D85642
Mr. Johnny Ip
Fortune Plastic & Metal, Inc.
20 Carbon Place
Jersey City, N.J. 07305
RE: The tariff classification of magnesium alloy ingots from
China.
Dear Mr. Ip:
In your letter dated October 28, 1998, you requested a
tariff classification ruling.
The subject items are described as follows:
Transaction 1 - The export of scrap magnesium from the
U.S., where the scrap would be converted by refining to an alloy
ingot for a fee (tolled), and then returned to the U.S. A fee
would be paid to the China facility for upgrading the scrap to
ingot. The scrap would be bought and the ingot sold in the U.S.
This is similar to improving the scrap to make it marketable for
reuse at a higher price in the die-casting and automotive parts
sectors.
Transaction 2 - Simply purchasing magnesium alloy ingot
from China and importing it into the U.S. for sale.
In both cases, the magnesium ingot would be an alloy
similar to ASTM B93/B93M-AZ91D & AM60B, which are composed of
approximately 90% magnesium, with the balance other metals. In
neither case, does the magnesium exceed 95% by weight.
The applicable subheading for the magnesium alloy ingots
in both transactions will be 8104.19.0000, Harmonized Tariff
Schedule of the United States (HTS), which provides for magnesium
and articles thereof, including waste and scrap: unwrought
magnesium: other. The duty rate will be 6.5% ad valorem. The
duty rate in 1999 will remain unchanged.
Pure primary magnesium which includes products that
contain 50% or greater but less than 99.8% primary magnesium, by
weight, and that do not conform to ASTM Specifications for alloy
magnesium are covered by Antidumping case A-570-832. We suggest
that you request a scope ruling for your specific product by
writing to the Department of Commerce, ITA, Office of Antidumping
Compliance, Import Administration room B099, 14th Street and
Constitution Avenue, NW, Washington, DC 20230.
You requested additional information that we reply in a
synopsis form as follows:
Customs duties will be calculated based upon the
Transaction Value (if it exists) of your purchase. Many factors
are considered for Customs to appraise your shipment. Basically,
as in most cases, it is the price paid or payable to the
manufacturer of the goods plus certain additions that include
packing costs, selling commissions, the value of any assist, any
royalty or license fee, and the proceeds of any subsequent
resale, disposal, or use of the imported merchandise that accrue,
directly or indirectly, to the seller (section 152.103 of the
Customs Regulations). So if your agreement with the
supplier/manufacturer is at an F.O.B. price, U.S. Customs would
apply the 6.5% rate of duty to that amount. The upgrading
(tolling) has a direct effect in that it is a manufacturing
process that is a component of the price that you pay (or is
payable) to the manufacturer. To prepare and expedite the Custom
Clearance Process, you may familiarize yourself with the U.S.
Customs Regulations or perhaps employ the services of a U.S.
Customs or Freight Forwarder. Another binding ruling, due to the
fact that the consumers change is unnecessary unless the
manufacturing processes change.
This ruling is being issued under the provisions of Part
177 of the Customs Regulations (19 C.F.R. 177).
A copy of this 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 Kathy
Campanelli at 212-466-5492.
Sincerely,
Robert B. Swierupski
Director
National Commodity
Specialist
Division