CLA-2-84:OT:RR:NC:1:104
Mr. William Da Costa Hooper
FMC Technologies Inc.
1777 Gears Rd.
Houston, TX 77067
RE: The tariff classification of casing hangers from the United Kingdom
Dear Mr. Hooper:
In your letter dated November 13, 2009 you requested a tariff classification ruling.
Casing hangers, Part Numbers P1000044956 and P152293, are used in exploratory and production wells. The material grade is generally made from either 8630, 85 Ksi yield steel alloy (M20409) or from 8630, 110 Ksi steel alloy (M20412). They are bracket supports designed to fit on a wellhead in order to suspend the weight of casing strings in the well. The casing hangers are not made from casts. Rather they are machined from forgings. They are permanently installed inside of the wellheads. You indicate that each casing hanger is imported “without any casing threads being machined on the hanger (99% complete) finished machined and with its essential character”. After importation, casing hanger blanks are put into inventory. While slots and indentations are present at time of importation, sizes and threads are not determined until they are pulled out of inventory. At that point, the hanger is sent to a threading company to be machined to the customer’s required thread profile. A threaded casing hanger uses the male/female threads to hold the casing.
Part Number P1000044956 is a 14” large bore casing hanger which is part of casing hanger assembly Part No. P1000044058. This casing hanger must be able to expand into the recessed wellhead load shoulder in order to support the casing weight. The load ring in this type of casing hanger is used in wellheads that have a larger ID with a recessed load shoulder. The load ring is mechanically set, that is, expansion is accomplished by gravity pulling the casing weight down. Sliding sleeves and lock rings automatically actuate/function as the hanger is set into place.
Part Number P152293 is a 13 5/8” casing hanger which is part of casing hanger assembly Part No. 152292. It is designed with passive mandrel load shoulders. There are no trigger shoulders or expandable load rings. There is no actuation or functioning taking place. It is a solid piece of steel to which the casing is threaded.
In your letter, you suggest classifying the goods in subheading 8431.43.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Parts suitable for use solely or principally with the machinery of headings 8425 to 8430: of machinery of heading…8430: parts for boring or sinking machinery of subheading 8430.41 or 8430.49: of offshore oil and natural gas drilling and productions platforms. As an alternative classification, you propose subheading 7326.90.8530, HTSUS, which provides for Other articles of iron or steel: Other: Other: Other: Other…Hangers and similar supports for tubes and pipes.
Although used in wells, the casing hangers are associated with the bored well casings and not the well boring or sinking machinery of HTSUS 8430. They are therefore not parts of the machinery of HTSUS 8430 and not classifiable in HTSUS 8431.
With regard to your alternative proposal, subheading 7326.90.8530, HTSUS, the hangers’ differing methods of operation must be taken into consideration. Part Number P1000044956 contains mechanical features which when activated set the hanger into its proper position. Part Number P152293 is a passive (non-moving) piece of equipment (referred to in your letter as “dumb iron”) with no mechanical activation.
It is also noted that in your letter you refer to the merchandise in question as casing hanger “blanks”. You indicate that this term refers to a complete casing body without threading, sliding sleeves and load ring. The latter two items are sourced domestically and installed in the US. The Explanatory Notes (“ENs”) to General Rule of Interpretation 2(a) [“GRI 2(a)”] provide guidance on the application of the rule to “blanks”. Said ENs state, in part,
(II) The provisions of this Rule also apply to blanks unless these are specified in a particular heading. The term “blank” means an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into the finished article or part (e.g., bottle performs of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape).
Semi-manufactures not yet having the essential shape of the finished articles (such as is generally the case with bars, discs, tubes, etc.) are not regarded as “blanks”.
It is this office’s opinion that each of the casing hangers, in its imported condition, qualifies as a blank for tariff purposes. The casing hangers meet the two criteria for articles which are “blanks” for GRI 2(a) purposes, i.e., (1) have approximate shape or outline and (2) sole use for completion into the finished part. Each has the character of a complete casing hanger. As imported, these articles are not merely shapes that may be used to make a variety of articles. Even before the machining of the threads and installation of the load rings, the shape or outline of the finished casing hanger has been machined.
The applicable subheading for mechanically set casing hanger, Part Number P1000044956 will be 8479.89.9899, HTSUS, which provides for Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other…Other…Other. The rate of duty will be 2.5% ad valorem.
The applicable subheading for passive casing hanger, Part Number P152293, will be 7326.90.8530, HTSUS, which provides for Other articles of iron or steel: Other: Other: Other: Other…Hangers and similar supports for tubes and pipes. The rate of duty will be 2.9 percent ad valorem.
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 Patricia O’Donnell at (646) 733-3011.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division