CLA-2-38:OT:RR:NC:N3:135
Mr. Douglas Jacobson Jacobson Burton Kelley PLLC 1725 I Street, NW Suite 300
Washington, DC 20006
RE: The tariff classification and country of origin of Spray Dried Copper Zeolite Catalysts from various countries; Article 509.
Dear Mr. Jacobson:
In your letter dated September 4, 2019, you requested a tariff classification and country of origin ruling on behalf of Johnson Matthey Inc. Additional information was provided via email on September 17, 2019.
Spray Dried Copper Zeolite Catalysts are a chemical mixture that will be applied to a ceramic substrate and used as a catalytic converter in a vehicle. The process to produce the Spray-Dried Copper Zeolite Catalysts consists of mixing zeolite crystals, water, and metal salt together, pumping the slurry through a spray dryer to form agglomerated dry particles, then sending through a calcining oven to fix the copper onto the zeolite and removing all excess moisture for packaging.
The applicable subheading for the Spray Dried Copper Zeolite Catalysts will be 3815.19.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “[r]eaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included: [s]upported catalysts: [o]ther.” The rate of duty will be free.
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 (EPA). Information on the TSCA can be obtained by contacting the EPA at Document Control Office (7407M), Office of Pollution Prevention and Toxics (OPPT), Environmental Protection Agency, 1200 Pennsylvania Avenue, N.W., Washington, D.C., 20460, by calling the Toxic Substances Control Act Hotline at (202) 554-1404, by e-mailing 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 the World Wide Web at https://hts.usitc.gov/current.
You also request a country of origin determination for the Spray Dried Copper Zeolite Catalysts made in NAFTA (North American Free Trade Agreement) or non-NAFTA countries. The primary raw materials are sourced from different countries. The zeolite crystals are produced in Country A. The metal salt is a product of Country B. The Spray Dried Copper Zeolite Catalysts will be made in Country C (NAFTA or non-NAFTA countries, not including China).
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs and Border Protection Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304.
The "country of origin" is defined in 19 CFR 134.1(b) as:
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within this Part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
When considering a product that may be subject to safeguard measures, the substantial transformation analysis is applied to determine the country of origin. See 19 C.F.R. § 102.0; HQ 563205, dated June 28, 2006; see also Belcrest Linens v. United States, 741 F.2d 1368, 1370-71 (Fed. Cir. 1984) (finding that “the term ‘product of’ at the least includes manufactured articles of such country or area” and that substantial transformation “is essentially the test used…in determining whether an article is a manufacture of a given country”).
I. Non-NAFTA Origin Determination
The issue to be considered here is whether the Spray Dried Copper Zeolite Catalysts become a good of Country C when the zeolite crystals and the metal salt are sourced from non-NAFTA countries (Country A and Country B) and are processed as described above in Country C, another non-NAFTA country.
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). The issue of whether a substantial transformation occurs is determined on a case by case basis. See HQ 561353, dated September 19, 2002.
Based on your submissions, the production process results in physical and chemical changes of two separate chemicals, such as acidity, pore volumes, crystal nature, etc., and creates a chemical mixture with a different chemical formula having a new name, character, and use. In our opinion, the Spray Dried Copper Zeolite Catalysts are a product of a chemical reaction and the process described above effects a “substantial transformation.” Accordingly, the country of origin of the Spray Dried Copper Zeolite Catalysts will be Country C.
II. NAFTA Country of Origin Determination
When the zeolite crystals and the metal salt are sourced from non-NAFTA countries and the final mixture has been produced in one of the NAFTA countries (Country C), the NAFTA Marking Rules apply for the country of origin for marking purposes.
Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.
Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the Spray Dried Copper Zeolite Catalysts are a product of Country C for marking purposes because each foreign chemical undergoes an applicable tariff shift pursuant to 19 C.F.R. §102.11(a)(3) and 19 C.F.R. §102.20. While the NAFTA Marking Rules contained in 19 C.F.R. Part 102 will determine the country of origin for marking purposes, the substantial transformation test will determine the country of origin for purposes of the trade remedies. See, e.g., Headquarters Ruling (“HQ”) H301619, dated November 6, 2018.
This ruling is being issued under the provisions of Part 181 of the CBP Regulations (19 C.F.R. 181).
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 Fei Chen at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division