CLA-2 OT:RR:CTF:VS H303280 EGJ
Mr. Alan Park
idX Corporation Los Angeles
5005 East Philadelphia Street
Ontario, CA 91761
RE: Country of origin of quartz countertops; Section 301 trade remedy;
9903.88.03, HTSUS
Dear Mr. Park:
This is in response to your request, dated March 13, 2019, regarding the country of origin of quartz countertops. In your letter, you request a binding ruling on the applicability of subheading 9903.88.03 of the Harmonized Tariff Schedule of the United States (HTSUS), a Section 301 trade remedy provision, to proposed transactions involving U.S. origin quartz slabs which are cut and polished in China.
FACTS:
You state that idX Corporation will export agglomerated quartz slabs of U.S. origin quartz to a workshop in China. At exportation, you note that these slabs will measure approximately 56.5” x 120”. After arriving in China, the workshop will cut the slabs down to between 22” to 24” in depth. The workshop will also cut them to length based upon the size of the ordered kitchen or bathroom countertop. Depending on the final countertop design, holes may be cut into the slab to accommodate sink and faucet installation. After cutting, the workshop will polish the countertops. Then, you state that idX Corporation will import the cut and polished countertops into the United States.
You note that both the agglomerated quartz slabs and the finished countertops are classified under subheading 6810.99.00, HTSUS, which provides, in relevant part, for “Articles of … artificial stone, whether or not reinforced: Other: Other.” Goods of this subheading which are products of China are subject to Section 301 trade remedies under subheading 9903.88.03, HTSUS. Therefore, you have requested that we determine whether the U.S. origin quartz slabs are substantially transformed in China, or whether they remain products of the United States after they are cut and polished. To assist in making a determination, you have provided pictures of the U.S. origin slabs and the finished countertops, which are provided below:
ISSUE:
What is the country of origin of the imported countertops for the purpose of applying the Section 301 trade remedy under subheading 9903.88.03, HTSUS?
LAW AND ANALYSIS:
Effective July 6, 2018, the Office of the United States Trade Representative imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. See Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 28710 (June 20, 2018). Later, the USTR imposed additional tariffs on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), U.S. Note 20(f) and U.S. Note 20(g), HTSUS. The corresponding products of China that are provided for in subheadings 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04, and are classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to Subchapter III, shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings. Products of China classifiable in subheading 6810.99.00, HTSUS, are subject to the applicable duty rate plus an additional 10 percent under subheading 9903.88.03, HTSUS.
When determining the country of origin for purposes of applying current trade remedies under Section 301, 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. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (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).
Courts have held that when the properties and uses of a product are predetermined by the material from which it was made, no substantial transformation occurs. For example, in Superior Wire v. United States, 669 F. Supp. 472 (Ct. Int’l Trade 1987), aff’d 867 F.2d 1409 (Fed. Cir. 1989), wire rod in coils was shipped to Canada where it was drawn into finished wire. The tensile strength of the final product was increased by approximately 30 to 40 percent as the rod was reduced in cross-sectional area by about 30 percent and was elongated. The court determined that the drawing operation did not result in a substantial transformation, pointing out that the properties of the wire rod and its uses were determined by the chemical content of the rod and the cooling processes used in its manufacture, and that the wire rod dictated the final form of the finished wire.
Similarly, the instant agglomerated quartz slabs have a predetermined end use as kitchen and bathroom countertops. The thickness, strength and aesthetic appearance of the finished countertops are already imparted by the slabs. In China, the workshop merely cuts the slabs to size, cuts holes for fixtures, and then polishes them. In New York Ruling Letter (NY) N101559, dated May 10, 2010, we examined agglomerated quartz slabs which were produced in South Korea and then shipped to the United States. In the U.S., the slabs were further worked into various forms, such as countertops, vanity tops, tabletops, windowsills and thresholds. In that ruling, we found that the further working in the United States did not constitute a substantial transformation. But see Headquarters Ruling Letter (HQ) 732330, dated June 28, 1989, (unformed blocks of granite and marble quarried in China and shipped to Portugal for processing into tiles, slabs or memorial markers were substantially transformed in Portugal). Based upon the information provided, the production processes performed upon the instant agglomerated quartz slabs in China do not constitute a substantial transformation.
As the processing in China does not result in a substantial transformation, the imported countertops remain products of the United States. Accordingly, the countertops are not products of China, and the Section 301 measures will not apply.
Please be advised that the subject merchandise may be subject to antidumping duties (“AD”) or countervailing duties (“CVD”). We note that the U.S. International Trade Administration is not necessarily bound by a country of origin or classification determination issued by CBP, with regard to the scope of AD/CVD orders. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by CBP. The Import Administration can be contacted at http://www.trade.gov/ia/ (see Contact Information). A list of current AD/CVD cases at the U.S. International Trade Commission can be viewed on its website at http://www.usitc.gov (click on “Import Injury” and then “Antidumping and Countervailing Duty Investigations”). AD/CVD deposit and liquidation messages can be searched using ACE, the system of record for AD/CVD messages, or the AD/CVD Search tool, at http://adcvd.cbp.dhs.gov/ adcvdweb/.
HOLDING:
The country of origin of the agglomerated quartz countertops, for purposes of the application of subheading 9903.88.03, HTSUS, is the United States. As the merchandise will be a product of the United States, Section 301 measures will not apply.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy of this ruling, it should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch