CLA-2-27:OT:RR:NC:N2:237
Ms. Rhonda F. MacKenzie
Customs Compliance Manager
Newalta Corporation
211 11th Avenue SW
Calgary, Alberta T2R 0C6
Canada
RE: Tariff classification, country of origin and NAFTA eligibility of waste oil from Canada.
Dear Ms. MacKenzie:
In your letter dated September 12, 2013 you requested a tariff classification, country of origin and eligibility ruling under the North American Free Trade Agreement (NAFTA) for used oil.
Newalta currently collects used oil from networks in Canada to be recycled at several Canadian facilities. Due to the high volumes collected, Newalta will begin shipping excess quantities of used oil to customers in the U.S. for recycling in the near future. Extensive processing is required to convert used oil with high levels of complex additives and contaminants into quality base oils and fuel oils. Chemical and physical treatment removes water and solids. The waste stream is vaporized in cracking pots to distill fluids from sludge. The vapors are condensed into light hydrocarbon condensate and oil distillate. Heavier molecules are thermally cracked into lighter molecules. Refining produces base oil for use in lubricants and distillate oils for use in industrial fuel oil. The remaining sludge is thermally processed into inert, non-leachable, solid ash cake.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the HTSUS. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989). EN 27.10(II)(1) is relevant to your product and in pertinent part provides for: waste petroleum and similar waste oils no longer fit for use in primary products (e.g., used lubricating oils, used hydraulic oils and used transformer oil).
The applicable subheading for the used oil will be 2710.99.3100, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Waste oils: Other: Wastes of lubricating oils and greases (whether or not containing additives): Of oils. The rate of duty is 84 cents per barrel. However, goods from Canada meeting the criteria for originating in GN 12(b), HTSUS, are eligible for duty free treatment under the NAFTA.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the North American Free Trade Agreement (NAFTA).
General Note 12(b), HTSUS, (19 U.S.C. ยง 1202) states, in pertinent part, that: For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if-- (i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or (ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that-- (A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein.
Under General Note 12(n)(ix), a good can be considered to be "wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States," when it consists of "waste and scrap derived from-- (A) production in the territory of one or more of the NAFTA parties, or (B) used goods collected in the territory of one or more of the NAFTA parties, provided such goods are fit only for the recovery of raw materials."
The used oil containing high levels of complex additives and contaminants is no longer fit for use in primary products. Extensive recycling, thermal processing and refining are required to convert the used oil into base oils for use in lubricants and distillate oils for use in fuel oils.
Consequently, we find the used oil falls within scope of General Note 12(n)(ix)(B) because the used oil is collected in Canada, a NAFTA party, and the only use the used oil may have is for the possible salvaging of the raw materials from which the used oil is made. Therefore, we conclude that the used oil will be considered NAFTA originating under GN 12(n)(ix)(B) as waste or scrap and will be entitled to duty free entry under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
This merchandise may be subject to the requirements of the Toxic Substances Control Act (TSCA), which are administered by the U. S. Environmental Protection Agency. Information on the TSCA can be obtained by contacting the EPA at 1200 Pennsylvania Avenue, N.W., Washington, D.C. 20460, by calling the TSCA Assistance Line at (202) 554-1404, by Fax at (202) 554-5603, by e-mail to: [email protected] or by visiting their website at www.epa.gov.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Frank Cantone at (646) 733-3038.
Sincerely,
Gwenn Klein Kirschner
Acting Director
National Commodity Specialist Division