CON-9-04 CO:R:C:E 223899 C

Chief, Branch 1
National Import Specialist Division
New York Seaport Area
U.S. Customs Service
6 World Trade Center, Room 423
New York, New York 10048

RE: Applicability of TIB procedures under 9813.00.05, HTSUS, to the processing of Canadian softwood lumber; application of countervailing duty to TIB entries from Canada

Dear Sir:

This responds to your memorandum regarding a request for a ruling submitted by Rosboro Lumber Company concerning temporary importation under bond (TIB) for Canadian softwood lumber. We have reviewed all relevant materials and our response follows.


Rosboro Lumber Company proposes to enter lumber from Canada under TIB provisions. The lumber is described as a special laminating grade of Canadian Spruce/Pine, and it will undergo a procedure in the United States whereby it will be made into an "Export Structural Glulam Product meeting metric standards for European Structural Timbers." You have indicated that the lumber is properly classifiable under 4407.10.00, HTSUS, and that it is subject to a preliminary countervailing duty order imposing additional duties of 14.48% ad valorem. The procedure will take place, and exportation will be accomplished, within one year from the date of importation. The company requests a ruling on the applicability of subheading 9813.00.05 of the Harmonized Tariff Schedule of the United States (HTSUS).

In your memorandum, you have expressed the view that the lumber in question may be eligible for TIB treatment under the subheading. The company intimates that under TIB procedures, the 14.48% countervailing duty would not have to be paid on its imports. You have expressed the view that merchandise entered under TIB provisions would not be subject to duty, including countervailing duty. In apparent support of that proposition, you cite Headquarters Letter 221495, dated July 11, 1989, concerning applicability of TIB procedures to red cedar shakes, where a presidential proclamation declaring special duties on red cedar shakes was involved.


On the facts of this case, can the lumber in question be entered under TIB procedures? Would the countervailing duty be imposed upon TIB entry from Canada?


Subheading 9813.00.05, HTSUS, provides for duty-free importation under bond for merchandise to be repaired, altered, or processed in the United States, provided it is not imported for sale or sale on approval and that it is exported (or destroyed) in a timely manner (see U.S. Note 1(a) of Subchapter XIII, Chapter XXII, HTSUS, and 19 C.F.R. 10.37). The processing can be anywhere from relatively minor to extensive enough to be considered a manufacture or production. The processing operation here involves the production of structural timber beams, called "timbers," from imported "dimension lumber." Dimension lumber is lumber in pieces between one inch and two-and-a-half inches thick, with varying lengths. To make a timber, dimension lumber is glued together, finished, re-sized (or cut) to specifications, trimmed to proper length, and packed for shipment. This procedure falls within the meaning of "processing" under 9813.00.05, HTSUS, and qualifies for TIB treatment.

As you pointed out in your memorandum, U.S. Note 2(b) of Subchapter XIII (Chapter XXII, HTSUS) requires that any processing that amounts to a manufacture or production of articles must include an accounting for all articles, wastes, or irrecoverable losses resulting from the processing. All such articles and valuable wastes shall be exported or destroyed under Customs supervision; alternatively, duties may be paid on valuable wastes at the rate applicable to such wastes at the time of importation of the entered merchandise.

In addition to qualification for TIB entry, you have raised the question, somewhat indirectly, as to whether or not the lumber in question can be entered without payment of the applicable CVD duties. You stated your belief that these duties would not have to be paid. You also pointed out that TIB entries from Canada do not require a bond.

Ordinarily, CVD duties are charged against the TIB bond and do not have to be deposited at entry. This is so because TIB entries are not considered consumption entries for TIB purposes (see Headquarters Ruling Letter 223491, March 30, 1992, copy attached). In the instant case, however, the imported merchandise is from Canada, and a TIB bond is not required for TIB entries from Canada (see Customs Ruling Letter 221508, July 5, 1989, copy attached). Under these precedents, it is clear that the CVD duties applicable to the lumber in question do not have to be deposited at entry, nor will they have to be charged to a TIB bond. (We merely note that Customs Ruling letter 221495 did not address the issue of applicability of a special duty imposed by presidential proclamation to TIB entries of red cedar shakes. Therefore, it is not precedential authority for the proposition you appear to have had in mind when citing it; to wit, that the CVD duty in the instant case should not apply to the TIB entries of lumber.)

In summary, we conclude that the imported lumber may be entered under TIB procedures, provided that all pertinent statutory and regulatory requirements are met (including those mentioned above). The applicable CVD duties need not be deposited at entry nor charged against a bond.


The operation in question, as applied to the imported lumber, qualifies as "processing" under 9813.00.05, HTSUS, and the lumber in question can be entered under TIB procedures. The countervailing duty applicable to these lumber imports from Canada need not be deposited at entry nor charged to a TIB bond.


John Durant, Director
Commercial Rulings Division