N081818
CLA-2-73: OT: RR: NC: 1:117
Mr. Kevin J. Mayer
International Sales
Bead Industries
11 Cascade Boulevard
Milford, CT 06460
RE: The tariff classification of bead chain from South Korea
Dear Mr. Mayer:
In your letter dated October 27, 2009 you requested a tariff classification ruling.
The product you intend to import is described as metal bead chain manufactured in South Korea. From the product catalog pages submitted with your request it appears that the various metal compositions of the bead chain can be steel, stainless steel, brass, or brass coated steel.
There are two possible scenarios of shipment and further processing of the chain described in your inquiry. The first situation is that the chain will be imported into the U.S. where it will be warehoused and then sent to Costa Rica. The work performed in Costa Rica is described as cutting to a certain length and adding an attachment. The catalog shows attachments to be detachable pendants used for pulls, splicing links for key chains, novelties and other uses, and other assorted endings and connectors.
The second situation is that the chain is sent directly from South Korea to Costa Rica for further processing which can include cutting to length and adding the same type of attachments as described in the first scenario. You further state that in some cases the cost of labor in Costa Rica exceeds the value of the bead chain and that some of the attachments are made in the U.S. and have more value than the chain.
We will first provide the classifications of the chain itself as imported from South Korea. You suggest that the chains are classifiable in 7419.10.0000 Harmonized Tariff Schedule of the United States (HTSUS), and 7315.89.0000 Harmonized Tariff Schedule of the United States (HTSUS). Actually, the number 7315.89.0000 does not exist in the Harmonized Tariff Schedule of the United States (HTSUS).
The applicable subheading for the steel bead chain, stainless steel bead chain and brass coated steel chain will be 7315.89.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Chain and parts thereof, of iron or steel: Other chain: Other: Other. The rate of duty will be 3.9 percent ad valorem.
The applicable subheading for the brass bead chain will be 7419.10.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other articles of copper: Chain and parts thereof. The rate of duty will be 3 percent ad valorem.
The applicable subheading for the steel bead chain, stainless steel bead chain and brass coated steel chain, following cutting to length and adding attachments described and pictured in this inquiry to be performed in Costa Rica, will remain the same as the chain alone at 7315.89.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Chain and parts thereof, of iron or steel: Other chain: Other: Other. The rate of duty will be 3.9 percent ad valorem.
The applicable subheading for the brass bead chain, following cutting to length and adding attachments as described to be performed in Costa Rica, will remain in subheading 7419.10.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other articles of copper: Chain and parts thereof. The rate of duty will be 3 percent ad valorem.
It is our opinion that the cutting to length and addition of attachments as described and pictured in your inquiry does not constitute a substantial transformation of the chain manufactured in South Korea. The test for determining whether a substantial transformation occurs is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. The essential character of the chain with attachments remains the chain itself. The country of origin for duty and marking purposes would remain South Korea. The cost of labor and use of the attachments, some of which are produced in the U. S., would not alter the essential character of the finished product.
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 Mary Ellen Laker at (646) 733-3020.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division