OT:RR:CTF:VS H317583 AP
Tomohiro Kamoshida
Sales Account Manager
Sales & Marketing
Kobelco Stewart Bolling, Inc.
1600 Terex Road
Hudson, OH 44236
RE: Preferential Tariff Treatment of a Twin Screw Extruder under the Trade Agreement between the United States and Japan
Dear Mr. Kamoshida:
This is in response to your February 20, 2021 ruling request, filed on behalf of Bridgestone Americas Tire Operations, regarding the tariff treatment of a twin screw extruder under the Trade Agreement between the United States and Japan (“JPTA”).
FACTS:
The merchandise at issue is a specialized twin screw extruder with roller die head classifiable in subheading 8477.20.00, Harmonized Tariff Schedule of the United States (“HTSUS”). The twin screw extruder is designed to accept a rubber mixture discharged from an internal intensive mixer and then form a continuous, seamless material sheet. The twin screw extruder is used in applications such as tire manufacturing, custom compounding, hose and belt, and industrial rubber goods.
The twin screw extruder is comprised of the following 17 subassemblies manufactured in Japan primarily of components of Japanese origin: screw assembly, gear reducer assembly, side guide assembly, hopper chute assembly, water piping assembly, grease piping assembly, hydraulic piping assembly, roll assembly, roll stand assembly, R/G adjusting device, drive unit assembly, bank control, cooling unit assembly, roll gap detector assembly, roll drive unit assembly, and locking assembly.
You have included a bill of materials, diagrams and photographs of the twin screw extruder, and classification of the subassemblies (all in subheading 8477.90, HTSUS). Further, you describe what materials are included in each subassembly, along with diagrams of those materials. For example, some of the parts of the screw assembly include screws, front collar, bearing, collar ring, parallel key, and conical gear. This is then installed on the gear case lower, and then the gear case upper and bearing covers are installed. This component is then installed into the hopper cylinder, then rotary joints and oil seal covers are installed.
Five of the subassemblies are combined with components from non-originating countries. The National Commodity Specialist Division (“NCSD”) reported that the non-originating components are classified in a subheading other than 8477.20, HTSUS. The final assembly and manufacturing operations of all subassemblies are completed in Japan. The final assembly involves machining, welding, adjusting, and alignment.
ISSUE:
Whether the subject twin screw extruder is an originating good under the terms of the JPTA.
LAW AND ANALYSIS:
The JPTA was signed by the Governments of the United States and Japan on October 7, 2019. On December 26, 2019, Proclamation 9974 set forth modifications to the Harmonized Tariff Schedule by inserting General Note (“GN”) 36 and to the tariffs with respect to certain goods to carry out the JPTA, effective on January 1, 2020. See 84 FR 72187 (Dec. 30, 2019).
GN 36(a), HTSUS, provides:
Originating goods under the terms of the Trade Agreement between the United States and Japan, entered into on October 7, 2019, are subject to duty as provided herein and in subchapter XXI of chapter 99 of the tariff schedule. For the purposes of this note, originating goods of Japan, as defined in Annex II of the Trade Agreement between the United States and Japan, that are imported into the customs territory of the United States and entered under a provision for which a rate of duty appears in the “Special” subcolumn of column 1 followed by the symbol “JP” in parentheses are eligible for the tariff treatment, and any applicable quantitative limitations, set forth in the “Special” subcolumn of Rates of Duty column 1.
The twin screw extruder is classified under subheading 8477.20.00, HTSUS, which has a duty-free rate for goods originating under the JPTA. The JPTA Rules of Origin and Origin Procedures (“ROO”) set out in Annex II set forth the criteria for determining whether a good is originating for purposes of the JPTA. Paragraph 2 states:
For a good listed in the Tariff Schedule of the United States, the United States shall provide that a good is originating from Japan, except as otherwise provided in these Rules of Origin and Origin Procedures, if it is:
(a) wholly obtained or produced entirely in one or both of the Parties, as defined in paragraph 3;
(b) produced entirely in one or both of the Parties, exclusively from originating materials; or
(c) produced entirely in one or both of the Parties, using non-originating materials provided such materials satisfy the applicable change in tariff classification requirement under the Product-Specific Rules of Origin set forth in paragraphs 17 through 19 and the table below,
and the good satisfies all other applicable requirements of these Rules of Origin and Origin Procedures.
Since the twin screw extruder contains non-originating materials, it is not considered a good wholly obtained or produced entirely in a JPTA party under subparagraphs (a) or (b). Next, we must then determine whether it qualifies as originating under subparagraph (c). The product specific rules of origin are set out in the table of Annex II, and paragraph 19 of the JPTA ROO defines the terms used in the product specific rules of origin. The applicable rule of origin in Annex II for products classified under 8477.20.00, HTSUS, is “CTSH.” Paragraph 19 states that “CTSH” means “that all non-originating materials used in the production of the good have undergone a change in tariff classification at the 6-digit level.” Since the non-originating components are classified in a subheading other than 8477.20, HTSUS, the requirement under the rule is met.
Therefore, the twin screw extruder classified in subheading 8477.20.00, HTSUS, qualifies as originating under the JPTA.
HOLDING:
Based on the information provided, the twin screw extruder classified under subheading 8477.20.00, HTSUS, qualifies as originating under the JPTA and is eligible for preferential tariff treatment.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a [U.S. Customs and Border Protection] field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch