OT:RR:CTF:CPMM H305658 MMM
LaFonda D. Sutton-Burke
Port Director
Los Angeles/ Long Beach Port of Entry
U.S. Customs and Border Protection
301 E. Ocean Blvd.
Long Beach, CA 90802
Attn: Nicholas Bishop/Team 059
Re: Application for Further Review of Protest Number 2704-18-100924; tariff classification of Plywood sheets
Dear Port Director,
This is in reply to the Application for Further Review (AFR) of Protest No. 2704-18-100924, dated May 14, 2018, on behalf of PERI Formwork Systems, Inc. (“Protestant”), contesting U.S. Customs and Border Protection’s (CBP) classification and liquidation of sixty-seven entries of plywood sheets in heading 4412, Harmonized Tariff Schedule of the United States (HTSUS), as plywood, veneered panels and similar laminated wood.
The subject merchandise was entered on April 3, 2017, in heading 4418, HTSUS, which provides for, in relevant part, “Builders' joinery and carpentry of wood, including cellular wood panels and assembled flooring panels; shingles and shakes.” The entry was liquidated on November 17, 2017. The plywood sheets were liquidated in heading 4412, HTSUS, as plywood, veneered panels and similar laminated wood. Protestant claims classification in heading 4418, HTSUS.
FACTS:
The imported product is rectangular wood panels that measure 4’ wide by 8’ long by 18mm thick. Each panel consists of 13 poplar (a non-coniferous wood) wood veneer plies that are laminated (i.e., bonded), one on top of the next, with the grain of each ply running at an angle to those of the subsequent plies. No ply within the panel exceeds 6mm in thickness. The panel is surface covered with an opaque phenolic resin film that obscures the grain of the wood to which it is applied. These panels have multiple uses, among which is the construction of forms used to shape concrete. The film weighs 120 g/m2.
ISSUE:
Whether the plywood sheets are classified in heading 4412, HTSUS, as plywood or in heading 4418, HTSUS, as carpentry of wood.
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3)(2006)). Further review of Protest Number 1703-19-100629 is properly accorded pursuant to 19 C.F.R.
§ 174.24(b) because the decision against which the protest was filed is alleged to involve a question of law or fact that has not previously been ruled upon by CBP or the courts.
The 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 GRIs 2 through 6 may then be applied in order.
In this case, the 2017 HTSUS headings under consideration are as follows:
4412 Plywood, veneered panels and similar laminated wood
4418 Builders' joinery and carpentry of wood, including cellular wood panels and assembled flooring panels; shingles and shakes
Additional US Note 1(c) of Chapter 44 states:
The term "surface covered," as applied to the articles of headings 4411 and 4412, means that one or more exterior surfaces of a product have been treated with creosote or other wood preservatives, or with fillers, sealers, waxes, oils, stains, varnishes, paints or enamels, or have been overlaid with paper, fabric, plastics, base metal, or other material.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System (HS) at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HS and are thus useful in ascertaining the proper classification of merchandise. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to heading 4412 state, in relevant part, as follows:
This heading covers:
Plywood consisting of three or more sheets of wood glued and pressed one on the other and generally disposed so that the grains of successive layers are at an angle; this gives the panels greater strength and, by compensating shrinkage, reduces warping. Each component sheet is known as a “ply” and plywood is usually formed of an odd number of plies, the middle ply being called the “core.”
The ENs to heading 4418 state, in relevant part, as follows:
This heading applies to woodwork, including that of wood marquetry of inlaid wood, used in the construction of any kind of building, etc., in the form of assembled goods or as recognizable unassembled pieces (e.g., prepared with tenons, mortises, dovetails or other similar joints for assembly), whether or not with their metal fittings such as hinges, locks, etc.
The term “joinery” applies more particularly to builders’ fittings (such as doors, windows, shutters, stairs, door or window frames), whereas the term “carpentry” refers to woodwork (such as beams, rafters and roof struts) used for structural purposes or in scaffoldings, arch supports, etc., and includes assembled shuttering for concrete constructional work. However, plywood panels, even if surface treated for the purposes of concrete shuttering, are classified in heading 44.12…
* * * *
The Protestant states that it imports engineered wood panels comprised of carpentry of wood identifiable, and dedicated to use, as wooden shuttering for concrete constructional work. The Protestant additionally asserts that the panels are not used for flooring, wall cladding, roofing, or other general uses like plywood (claims that it would be cost prohibitive to attempt such usage), and is designed and fabricated to be used for concrete shuttering.
CBP finds that the subject merchandise is, as imported, surface covered plywood; the subject merchandise meets the definition of plywood and is covered on its face and back with a phenolic resin film. Despite protestant’s claim that its panels are akin to ‘carpentry of wood,” EN 44.12 and EN 44.18 directs the classification of surface treated plywood panels to heading 4412. Additionally, EN 44.18, HTSUS, clarifies that plywood panels even if surface treated for the purposes of concrete shuttering, as the Protestant claims, are classified in heading 4412. Heading 4412 is not a use provision. Regardless of what the Protestant claims the plywood is used and marketed for, the subject merchandise is merely plywood surface treated in accordance with the Additional U.S. Note 1(c) to the chapter. The treatment consists of covering the face and back with an opaque brown or black phenolic resin film. This would meet the terms of the Additional U.S. Note as at least one side is overlaid with a plastic or other material. In fact, there are a number of such coverings available for plywood. The particular materials used to cover the plywood or the construction of the plywood itself does not turn plywood of heading 4412 into carpentry of heading 4418.
Furthermore, the subject merchandise meets the definition of Plywood under Boen Hardwood Flooring v. United States, which provides the following definition of “plywood:”
There are three common characteristics of "plywood" found in the definitions provided above: (1) there must be at least three layers; (2) each layer must be arranged at a right angle to its adjacent layer; and (3) the layers must be bonded together. There is no requirement that each layer be constructed in a certain manner.
The subject merchandise is made of 13 layers, each ply is arranged at an angle to those of the subsequent plies (“right angle to its adjacent layer”), and each layer is bonded together. Therefore, because the subject merchandise is plywood, it is specifically excluded from classification in heading 4418.
The Protestant also argues that the subject merchandise is separate and distinct from plywood classified in heading 4412, stating that:
The subject merchandise has a significantly more robust construction than mere plywood; (b) the merchandise is more expensive than plywood; (c) the merchandise is used and regard as separate and distinct from plywood; and (d) the merchandise is marketed for concrete construction, not general use as plywood.
Protestant’s argument that the merchandise is not plywood because of its construction, cost, and use is irrelevant. Heading 4412, HTSUS, is an eo nomine provision in which construction, cost, or use plays no role in the above definitions of plywood. Additionally, the Protestant is incorrect to say that the subject plywood is not general use plywood. In fact, anyone can purchase plywood of the same thickness from a home improvement store.
Lastly, the subject merchandise is neither in the form of assembled goods or as recognizable unassembled pieces and is not correctly classified in heading 4418, HTSUS. The Protestant submits that the product is a “recognizable unassembled piece” and that it passes the three-part test set out in Millenium Lumber Distrib. Ltd. Protestant neglects to mention, however, that the merchandise before the court in Millenium, being sawn woods of heading 4407, did not meet the terms of heading 4418. The situation here is analogous. The subject merchandise, like the merchandise in Millenium, would need to go through additional preparation of carpentry to be a “recognizable unassembled piece” of formwork for the purposes of shuttering. However, as imported the subject merchandise is merely general use covered plywood, even if more “robust” then other types of plywood, as claimed by the Protestant. The subject merchandise is excluded from classification in heading 4418.
The subject merchandise is correctly classified in heading 4412, HTSUS.
HOLDING:
By application of GRI 1, the plywood sheets are classified under headings 4412, HTSUS, specifically subheading 4412.32.5700, HTSUS (currently 4412.33.5700, HTSUS), which provides, in pertinent part, for: “Plywood, veneered panels and similar laminated wood: Other plywood consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm in thickness: Other, with at least one outer ply of nonconiferous wood: Other (than Not surface covered, or surface covered with a clear or transparent material which does not obscure the grain, texture or markings of the face ply).” The 2017 column one, general rate of duty for subheading 4412.32.5700 is 8% ad valorem.
You are instructed to DENY the protest. 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 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 International Trade, Regulations and Rulings, 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,
Craig T. Clark, Director
Commercial and Trade Facilitation Division