Mr. Keith Larson
Venture Global LNG, Inc.
1001 19th Street North
Arlington, Virginia 22209
RE: The tariff classification and country of origin of pipe-in-pipe assemblies
Dear Mr. Larson:
In your letter dated September 26, 2022, you requested a tariff classification ruling.
The products to be imported are prefabricated pipe-in-pipe (PIP) assemblies for use in a liquefaction plant. The PIP assemblies consist of three pipes (i.e., Liquefied Natural Gas (LNG) Main Line, LNG Offloading Line and the Recirculation Line) that transfer liquefied natural gas from the LNG storage tanks to the LNG loading arms.
The LNG Main Line Prefabricated 36"/42" pipe-in-pipe assembly consists of a 36" (914.4 mm) outside diameter (OD) inner core pipe made of Invar 36% nickel alloy steel, a 42" (1066.8 mm) OD outer pipe sleeve made of stainless steel, insulation and stainless steel sheets. The inner pipe is cold-rolled and longitudinally welded while the outer pipe is annealed, cold-rolled, pickled and longitudinally welded. You state that the inner core pipe is wrapped with Izoflex insulation and is installed into the outer pipe which is coated with epoxy novolac/silicone acrylic. The insulation is secured to the inner pipe using stainless steel sheets.
The LNG Offloading Line Prefabricated 24"/30" pipe-in-pipe assembly is comprised of a 24" (609.9 mm) OD inner core pipe made from ASME B31.3 Invar 36% nickel alloy, a 30" (762 mm) OD outer pipe sleeve made from ASTM A312 304/304L stainless steel, insulation and stainless steel sheets. The inner pipe is cold-rolled and longitudinally welded while the outer pipe is annealed, cold-rolled, pickled and longitudinally welded. You indicate that the inner core pipe is wrapped with Izoflex insulation and is installed into the outer pipe which is coated with epoxy novolac/silicone acrylic. The insulation is secured to the inner pipe using stainless steel sheets.
The Recirculation Line Prefabricated 6"/12" pipe-in-pipe assembly consists of a 6" (168.27 mm) OD inner core pipe made from ASME B31.3 Invar 36% nickel alloy, a 12" (323.9 mm) OD
outer pipe made from ASTM A358 304/304L stainless steel, insulation and stainless steel sheets. The inner pipe is cold-rolled and longitudinally welded while the outer pipe is cold-rolled, pickled and longitudinally welded. You state that the inner core pipe is wrapped with Izoflex insulation and is installed into the outer pipe which is coated with epoxy novolac/silicone acrylic EN/SA. The insulation is secured to the inner pipe using stainless steel sheets.
You indicate that the LNG passes through the Invar Ni36 inner core pipe from LNG storage tanks to the marine jetty and maintains the cryogenic state of the LNG while the stainless steel outer pipe provides external protection to the inner core pipe and double containment from LNG leaks.
The applicable subheading for the three pipe-in-pipe assemblies will be 7306.90.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other tubes, pipe, and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel, other, of alloy steel. The rate of duty will be free.
In addition to classification, you have inquired as to the country of origin of the pipe-in-pipe assemblies. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements of 19 U.S.C. 1304. Pursuant to 19 CFR 134.1(b), "country of origin" means the country of manufacture, production, or growth of any article of foreign origin entering the United States. 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 the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin.
Please be advised when determining the country of origin for purposes of applying trade remedies under Section 301, Section 232 and Section 201, the substantial transformation analysis is applicable. Since there are no USMCA countries involved, substantial transformation will be used to determine the country of origin for both marking purposes and for the applicability of trade remedies.
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. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993).
In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item's components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, or use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process may be considered when determining whether a substantial transformation has occurred. No one factor is determinative. Assembly operations that are minimal will generally not result in a substantial transformation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97.
According to your submission, the Invar Ni36 inner pipe of either Italian or German origin and the stainless steel outer pipe of Italian origin along with the Izoflex insulation panels, stainless steel sheets and preservation caps are shipped to France where the following manufacturing operations are performed: 1) the Invar Ni36 inner pipe is cut-to-length and beveled; 2) the stainless steel outer pipe is sandblasted, cut-to-length and beveled; 3) the Invar Ni36 inner pipe is insulated with Izoflex insulation and secured to the pipe by means of the stainless steel sheets; 4) a backing ring is welded onto the stainless steel outer pipe; 5) the Invar Ni36 inner pipe is inserted into the stainless steel outer pipe; 6) weld preservation caps are tacked onto the stainless steel outer pipe; 7) the PIP assembly is prepared for shipping; and 8) the PIP assembly is imported to the United States.
Based on the information provided, the pipes, insulation, stainless steel sheets and preservation caps are sent to France where they are assembled into the final product (PIP assembly). It is the opinion of this office that the assembly operations undertaken in France do not result in a substantial transformation in which a new product emerges having a different use. The essential character of the pipe-in-pipe assemblies is the stainless steel outer pipe of Italian origin which predominates by weight over the Invar Ni36 inner pipe. As such, we find that the country of origin of the PIP assemblies for both marking purposes and for the applicability of trade remedies is Italy.
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 at https://hts.usitc.gov/current.
On March 8, 2018, Presidential proclamations 9704 and 9705 imposed additional tariffs and quotas on a number of steel and aluminum mill products. Exemptions have been made on a temporary basis for some countries. Quantitative limitations or quotas may apply for certain exempted countries and can also be found in Chapter 99. Additional duties for steel of 25 percent and for aluminum of 10 percent are reflected in Chapter 99, subheading 9903.80.01 for steel and subheading 9903.85.01 for aluminum. Products classified under subheading 7306.90.5000, HTSUS, may be subject to additional duties or quota. At the time of importation, you must report the Chapter 99 subheading applicable to your product classification in addition to the Chapter 72, 73 or 76 subheading listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading.
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 Angelia Amerson at [email protected]
Steven A. Mack
National Commodity Specialist Division