OT-RR:CTF:VS H048151 GOB
U.S. Customs and Border Protection
1100 Raymond Blvd.
Newark, NJ 07102
RE: Protest 4601-05-101546; Generalized System of Preferences; Atrazine Technical
Dear Port Director:
This is in response to your memorandum of December 19, 2008, forwarding for our review the above-referenced protest filed by Dow AgroSciences LLC (the “protestant”) with respect to the importation of atrazine technical. The protestant made an additional submission of April 17, 2009. Our decision follows.
The evidence of record indicates the following. By two entries filed on June 18, 2004, the protestant imported a quantity of atrazine technical under the General System of Preferences (“GSP”). Both entries were liquidated on May 6, 2005.
The protestant states that the imported merchandise was manufactured in South Africa by the following process: Water, methyl isobutyl ketone, cyanuric chloride, isopropylamine, and sodium bicarbonate were reacted to form a “reaction mass.” The reaction mass was subsequently cooled and transferred to a second reaction vessel, where the reaction mass was reacted with ethylamine and caustic soda to produce crude atrazine. The crude atrazine was then washed, dried, milled, and packed to form atrazine. The atrazine technical was then packaged, labeled, and loaded onto pallets for shipping to the United States.
The protestant states that the following were raw materials of South Africa used in the production of the atrazine technical: water, methyl isobutyl ketone, isopropylamine, and caustic soda. It states that the bags, labels, and pallets used in the packaging of the atrazine were of South African origin. The following materials were not of South African origin: cyanuric chloride, ethylamine, and in some cases, isopropylamine.
The protestant has submitted the following documentation in support of its claim: a spreadsheet generated from its South African production database which lists specific lot codes for purchase orders tied to the subject entries; a spreadsheet detailing raw materials, atrazine formulation, bulk packaging, and 500 kg packaging; supplier correspondence concerning the origin of raw materials, some of which are not dated (no purchase orders or invoices to or from these suppliers were provided); and a GSP calculation worksheet.
The issue presented is whether the imported merchandise is eligible for treatment under the GSP?
LAW AND ANALYSIS:
Initially, we note that the information in the file indicates that the protest, with application for further review, was timely filed under the statutory and regulatory provisions for protests. 19 U.S.C. § 1514(c)(3).
Title V of the Trade Act of 1974, as amended (19 U.S.C. §§ 2461-65), authorizes the President to establish a Generalized System of Preferences to provide duty-free treatment for eligible articles imported directly from beneficiary developing countries (“BDCs”). Articles produced in a BDC (i.e., articles which are considered to be “a product of the BDC”) may qualify for duty-free treatment under the GSP if the goods are imported directly into the customs territory of the United States from the BDC and the sum of the cost or value of materials produced in the BDC, or any two or more countries that are members of the same association of countries and are treated as one country under 19 U.S.C. § 2467(2), plus the direct costs of the processing operations performed in the BDC or member countries, is equivalent to at least 35 percent of the appraised value of the article at the time of entry into the United States. See 19 U.S.C. § 2463(a)(2) and (3), and the implementing Bureau of Customs and Border Protection (“CBP”) Regulations at 19 CFR § 10.171-178.
South Africa has been designated as a BDC for purposes of the GSP and may be afforded preferential treatment under the Harmonized Tariff Schedule of the United States (“HTSUS”). See General Note 4(a), HTSUS. General Note 4(b)(ii) and (c), HTSUS, provide, in part, that special tariff treatment under the GSP is indicated in the “Special” subcolumn in the tariff by the symbols “A,” “A*” or “A+.” The record indicates that the goods imported into the United States were classified under subheading 2933.69.60, HTSUS (2004). This tariff provision is GSP-eligible. Thus, the goods imported into the United States are eligible to receive preferential treatment under the GSP, if they (1) are considered to be a “product” of South Africa; (2) meet the 35 percent value-content requirement; and (3) are “imported directly” into the United States.
A good is considered to be a “product of” a BDC if it is wholly the growth, product, or manufacture of a BDC, or has been substantially transformed in the BDC into a new or different article of commerce. See 19 U.S.C. § 2463(a)(3) and 19 C.F.R. § 10.177(a). The test for determining whether a substantial transformation has occurred is whether an article emerges from a process with a new name, character, and use, different from that possessed by the article prior to processing. See Texas Instruments v. United States, 681 F.2d 778, 782 (CCPA 1982).
HQ 560747, dated January 16, 1998, which was issued to the protestant’s predecessor company, concerned the eligibility of atrazine technical for GSP. In that ruling, CBP held that:
. . . the processing in South Africa results in chemical reactions which change the involved materials, having a wide variety of uses, into an article (Atrazine Technical) suited for specific purposes. The product, used as a herbicide, is an article with a new name, character and use when compared to the materials used in its production. Therefore, we find that the materials imported from Germany and used in the processing of the Atrazine Technical undergo a substantial transformation into a “product of” South Africa.
Based upon the facts presented, we find that the goods imported into South Africa which are involved in this protest were substantially transformed in South Africa into an article having a new name, character, and use, i.e., atrazine technical. Therefore, we determine that the subject atrazine technical is considered to be a product of South Africa for the purpose of GSP.
The record indicates that there is no controversy as to whether the subject atrazine was imported directly into the United States from South Africa.
Thus, the final inquiry is whether the 35 percent test value content requirement of 19 U.S.C. § 2463(a)(2)(A)(ii) and 19 CFR § 10.176(a)(1) is satisfied, i.e., is the sum of the cost or value of materials produced in the BDC, plus the direct costs of the processing operations performed in the BDC equivalent to at least 35 percent of the appraised value of the article? Based on the documentation of record we conclude that the protestant has not established that this requirement was satisfied. The documentation submitted by the protestant is not sufficient for this purpose. For example, certain of the documents are not dated and certain of the documents do not establish that the goods which are the subject of those documents were provided to the protestant.
Therefore, we determine that the subject imported merchandise is not eligible for treatment under the GSP.
The subject imported merchandise is not eligible for treatment under the GSP.
You are instructed to deny the protest.
In accordance with the Protest/Petition Processing Handbook (CIS HB, December 2007), 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 in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the office of 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.
Myles B. Harmon
Commercial and Trade Facilitation Division