CLA-2 OT:RR:CTF:TCM H192516 AMM
Port Director
U.S. Customs and Border Protection
Service Port – Champlain
237 West Service Road
Champlain, NY 12919
Attn: Rebecca Rabideau, SIS
RE: Tariff classification of Esacote OP80 and Esacote DP170; Protest Number 0712-11-100408
Dear Port Director:
This is in reply to an application for further review (AFR) of Protest Number 0712-11-100408, dated August 16, 2011, filed on behalf of Cambrian Chemicals (Cambrian), against U.S. Customs and Border Protection’s (CBP) reclassification and subsequent liquidation of two entries at the Service Port of Champlain (the Port) of Esacote OP80 and Esacote DP170, under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The instant products were entered at the Port in July 2010, and are identified as “Esacote OP80” and “Esacote DP170.” Esacote OP80 is a white liquid, while Esacote DP170 is a clear gel. Both products consist of high-density polyurethane dispersed in water. Rigid samples of both products were submitted to the CBP Laboratory for testing in accordance with Additional U.S. Note 1 to Chapter 39, HTSUS. Cambrian also submitted information detailing the manufacturing process for these products.
The CBP Laboratory determined that the specimens of Esacote OP80 and Esacote DP170 submitted could be stretched to three times their original length without breaking. See CBP Lab Report NY20110644, dated May 2, 2011. The CPB Lab also determined that the specimens would return to within 150% of their original length within five minutes of being stretched to two times their original length. See CBP Lab Report NY20110644.
ISSUE:
Whether the instant merchandise is classified as an elastomeric polyurethane in subheading 3909.50.10, HTSUS, or as other than elastomeric in subheading 3909.50.50, HTSUS.
LAW AND ANALYSIS:
Initially we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification and the rate and amount of duties chargeable. The protest was timely filed on August 17, 2011, within 180 days of liquidation, pursuant to 19 U.S.C. §1514(c)(3).
Further review of Protest No. 0712-11-100408 was properly accorded to protestant pursuant to 19 C.F.R. §174.24. Specifically, in accordance with Section 174.24(b), the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. Cambrian alleges that the instant merchandise meets the definition of “elastomeric” contained in Additional U.S. Note 1 to Chapter 39, HTSUS, and has submitted facts which were not considered at the time of the protest.
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied.
The 2010 HTSUS provisions at issue are as follows:
3909 Amino-resins, phenolic resins and polyurethanes, in primary forms:
3909.50 Polyurethanes:
3909.50.10 Elastomeric
3909.50.50 Other
Note 1 to Chapter 39, HTSUS, states, in pertinent part:
Throughout the tariff schedule the expression “plastics” means those materials of headings 3901 to 3914 which are or have been capable, either at the moment of polymerization or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticizer) by molding, casting, extruding, rolling or other process into shapes which are retained on the removal of the external influence.
* * *
Note 6 to Chapter 39, HTSUS, states, in pertinent part: “In headings 3901 to 3914, the expression “primary forms” applies only to the following forms:
(a) Liquids and pastes, including dispersions (emulsions and suspensions) and solutions; …”.
Additional U.S. Note 1 to Chapter 39, HTSUS, states:
For the purposes of this chapter, the term “elastomeric” means a plastics material which after cross-linking can be stretched at 20C to at least three times its original length and that, after having been stretched to twice its original length and the stress removed, returns within five minutes to less than 150 percent of its original length. Elastomeric plastics may also contain fillers, extenders, pigments or rubber-processing chemicals, whether or not such plastics material, after the addition of such fillers, extenders, pigments or chemicals, can meet the tests specified in the first part of this note.
[emphasis added]
The importer entered the instant merchandise under heading 3909, HTSUS, specifically under subheading 3909.50.10, which provides for “[P]olyurethanes, in primary forms: Polyurethanes: Elastomeric”. The Port liquidated this merchandise under subheading 3909.50.50, HTSUS, which provides for “[P]olyurethanes, in primary forms: Polyurethanes: Other”. Cambrian argues in their protest that the merchandise is properly classified under subheading 3909.50.10, HTSUS, and has submitted additional data and samples to CBP for testing and consideration.
The instant products, Esacote OP80 and Esacote DP170, consist of a proprietary polyurethane polymer suspended in a liquid form. CBP Laboratory testing has confirmed that the instant merchandise is polyurethane. See CBP Lab Report CH201100139S, dated May 20, 2011. There is no dispute that both Esacote OP80 and Esacote DP170 are properly classified under heading 3909, HTSUS. See Notes 1 and 6(a) to Chapter 39, HTSUS. Rather, the issue is the proper classification at the 8-digit subheading level. As a result, GRI 6 applies.
GRI 6 states:
For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
Specifically, the issue is whether the instant products are “elastomeric.” This term is specifically defined in Additional U.S. Note 1 to Chapter 39, HTSUS. To be elastomeric, a given substance must have certain material properties, namely, that it be a plastic material, and that it must be able to be cross-linked. After being cross-linked, test samples must satisfy the stretch and return test given in the Note. See Additional U.S. Note 1 to Chapter 39, HTSUS.
Samples submitted to CBP for testing on April 18, 2011, were tested in accordance with the Note. The CBP Laboratory found that the samples could be stretched to three times their original length without breaking, and that after being stretched to twice their original length, they would return to within 150% of their original length within five minutes. See CBP Laboratory Report NY20110644. However, there was no evidence submitted at this time as to whether the polyurethane had been cross-linked.
Cross-linking is defined as “attachment of two chains of polymer molecules by bridges, composed of either an element, a group, or a compound, that join certain carbon atoms of the chains by primary chemical bonds[.]” See Hawley’s Condensed Chemical Dictionary, 15th Ed., p. 346 (John Wiley & Sons, Inc., 2007). See also Headquarters Ruling Letter (HQ) 956342, dated September 20, 1994. Cross-linking is a chemical reaction, where long chains of polymers are linked together with other atoms or compounds.
On June 21, 2011, Cambrian submitted additional dumbbell-shaped samples and additional information to CBP. The information submitted described the manufacturing process of both Esacote OP80 and Esacote DP170. In that submission, Cambrian detailed the method by which the high density polyurethane polymer chains are cross-linked with both water and isocyanate compounds. Furthermore, the dumbbell-shaped samples were tested in accordance with the requirements of Additional U.S. Note 1 to Chapter 39, HTSUS, and it was determined that the samples could be stretched to three times their original length without breaking, and that after being stretched to twice their original length, they would return to within 150% of their original length within five minutes. See CBP Laboratory Report NY20120697. Therefore, based on documentation submitted by the importer and analyses of the product by the CBP Laboratory, we have concluded that the products known as Esacote OP80 and Esacote DP170 are elastomeric products. Although the instant merchandise is imported in a liquid form, they meet the definition contained in Additional U.S. Note 1 to Chapter 39, HTSUS, as they are plastic materials which, after cross-linking, meet the required stretch and return tests described in the Note. Thus, the instant products are properly classified under subheading 3909.50.10, HTSUS, by operation of GRI 6.
HOLDING:
By application of GRI 6, the instant products, identified as Esacote OP80 and Esacote DP170, which are the subject of protest number 0712-11-100408, are classified in heading 3909, HTSUS, specifically under subheading 3909.50.10, HTSUS, which provides for: “Amino-resins, phenolic resins and polyurethanes, in primary forms: Polyurethanes: Elastomeric”. The 2010 column one, general rate of duty is free. You are instructed to GRANT the protest in full.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter.
Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division