CLA-2 RR:CR:TE 958134 jb

Port Director
U.S. Customs Service
4477 Woodson Rd.
St. Louis, MO 63134

RE: Decision on Application for Further Review of Protest No. 4503-95-100012; carbon fiber precursor; Chapter 55

Dear Sir:

This is a decision on application for further review of a protest timely filed by Zoltek Corporation, and received by Customs on March 27, 1995, against your decision regarding the classification of 100 percent acrylic filaments intended to be used as a "precursor" material for carbon fiber. All entries were liquidated on February 24, 1995. Samples were submitted to this office for examination.

FACTS:

The submitted merchandise in its condition as imported, consists of a continuous group of 320,000 parallel acrylic filaments loosely packed into 350 to 400 pound boxes. The group of parallel strands is laid out in such a way that it is roughly flat in shape, and approximately 6 inches in width. Based on information submitted by the Protestant, twenty five feet of the material is equivalent to about one pound. As such, multiplying the weight of the box by the length per pound, results in approximately 8,750 to 10,000 continuous feet of this material per box.

The U.S. Customs Laboratory report states that the material:

...is a bundle of crimped, white multifilaments with a knot at one end, is composed of 100 percent by weight acrylic multifilaments, a type of synthetic man-made filaments.

The Protestant indicates that subsequent to importation, the material is to be subjected to processes of stabilization, oxidation and graphitization, resulting in an end product that is carbon fiber which is 95 percent carbon by weight. Ultimately, the material that is later oxidized and graphitized in the United States is used for reinforcement materials in a large variety of products and construction applications.

At the time of importation the Protestant attempted entry of the merchandise under heading 6815, HTSUS, which provides for, articles of stone or of other mineral substances (including carbon fibers, articles of carbon fibers and articles of peat). Customs classified the subject merchandise in heading 5402, HTSUS, which provides for synthetic filament yarn. We note however, that Customs classification of the subject merchandise in heading 5402, HTSUS, as synthetic filament yarn, was based on incomplete information which was provided at the time. The correct classification of the subject merchandise follows in the analysis below.

ISSUE:

What is the proper classification for the subject merchandise?

LAW AND ANALYSIS:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the rules of the headings and any relative section or chapter notes, taken in order. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI.

The subject merchandise, in its imported condition, consists of 100 percent acrylic with a small amount of methylacrylate and other materials added to facilitate the carbonization process which occurs after importation. The composition of the subject acrylic filament, in purely chemical terms, is noted as CH2=CH-CðN. Calculating based on atomic weights of 12 for carbon (C), 1 for hydrogen (H), and 14 for nitrogen (N), results in 68 percent of the weight of this polymer attributed to the presence of carbon atoms. However, the carbon in this material does not exist as an independent element; it exists only as part of the acrylic polymer molecules which comprise the formula CH2=CH-CðN. As such, the Protestant's belief that the imported acrylic filament has an "essential character" of carbon is erroneous. Determinations of "essential character" for materials of this sort are properly made at the molecular level, not at the atomic level, as the Protestant suggests. Carbon atoms behave far differently as parts of acrylic molecules (or other polymers, as is the case here), than as independent atoms. A polymer containing carbon differs from pure carbon in virtually all physical characteristics, as for example, appearance, melting point, and light absorption. As such, the subject merchandise which simply contains carbon as part of its molecular composition, can in no way be compared to elemental carbon.

An analysis such as that put forth by the Protestant, that is, premised on essential character at the atomic level, would lead to absurd results. This principle would have to be extended to all man-made fibers, whether synthetic or artificial, because carbon is the element that predominates by molecular weight in virtually all of the various polymers that make up the different types of man-made fibers. It is a basic tenet of Customs law that classification is based on condition as imported. The subject merchandise is still essentially acrylic by nature, it will not become essentially carbon by nature until later when the graphitization process breaks the chemical bonds and removes the hydrogen and nitrogen from the molecules. Thus, the classification of this merchandise is based on its nature as an "acrylic" filament.

Heading 5501, HTSUS, provides for synthetic filament tow. The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN) to that heading state:

This heading covers synthetic filament tow produced as described in the General Explanatory Note to this Chapter, only if it meets the following specifications (see also Chapter Note 1):

(A) The tow must exceed 2 m in length. (B) The tow must be untwisted or be twisted less than 5 turns per metre. (C) Each filament must measure less than 67 decitex. (D) The tow must have been drawn, i.e., it must be incapable of being stretched by more than 100 percent of its length. (E) The total measurement of the tow must exceed 20,000 decitex.

Chapter Note 1 states:

Headings 5501 and 5502 apply only to man-made filament tow, consisting of parallel filaments of uniform length equal to the length of the tow, meeting the following specifications:

(a) Length of tow exceeding 2 m; (b) Twist less than 5 turns per meter; (c) Measuring per filament less than 67 decitex; (d) Synthetic filament tow only; the tow must be drawn, that is to say, be incapable of being stretched by more than 100 percent of its length; and (e) Total measurement of tow more than 20,000 decitex

Tow of a length not exceeding 2 m is to be classified in heading 5503 or 5504.

The subject merchandise in its imported condition, is well over 2 meters in length and is untwisted, thus meeting the terms of Chapter Note 1 (A),(B), and the EN (a),(b). Based on the information submitted that one pound of this material is 25 feet in length, we calculate the linear density of the material to be approximately 595,000 decitex, which is well over the 20,000 decitex required by Note 1 to chapter 55 (E) and the EN (E). Dividing the total decitex of 595,000 by the total number of filaments, which is 320,000, we estimate that each individual filament has a decitex of less than 2, yielding the very fine filaments submitted, and thus, meeting the requirements set out by Note 1 to chapter 55 (C) and the EN (c). Finally, we assume, based on the fact that these filaments are not-stretchable, that they have been drawn, thus meeting the requirements set out by Note 1 to chapter 55(D) and the EN(d). Accordingly, as the characteristics of the subject merchandise satisfy the criteria set out by those notes, the merchandise is classifiable as tow of chapter 55, HTSUS.

The Protestant contends that the subject merchandise cannot be classified as tow because it is not destined for textile applications. The terms of the notes however, do not limit the uses to which this material must be put in order to fit within the parameters outlined above. Both Note 1 to chapter 55, HTSUS, and the EN to that heading merely establish the criteria that qualify a material for classification as "tow". Thus, whether or not material can be considered "tow" is not premised on end use but on physical attributes as enumerated by those notes. Furthermore, classification of this merchandise as tow is consistent with past Customs rulings which determined that materials which would not be used to make yarn, or ultimately used to weave or knit material, were nonetheless classified as tow in heading 5501, HTSUS. See for example, Headquarter Ruling (HQ) 083445, dated November 29, 1989, which classified a material designed to make cigarette filters as "tow" because the material satisfied all the requirements set out by the chapter note and EN to heading 5501. Similarly, in HQ 950469, dated September 11, 1992, material intended for use as brake linings was nonetheless classified as tow in heading 5501, HTSUS. As the subject merchandise meets all of the criteria for tow under heading 5501, HTSUS, there is no need to discuss other headings. As such, the proper classification for this merchandise is in subheading 5501.30.0000, HTSUSA, which provides for synthetic filament tow: acrylic or modacrylic. The applicable rate of duty at the time of importation was 10 percent ad valorem.

HOLDING:

The protest should be denied. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant, Director
Commercial Rulings Division