CLA-2-81:OT:RR:NC:N1:117
Paul S. Anderson
The Anderson Law Firm, LLC
125 South Wacker Drive, Suite 1825
Chicago, Illinois 60606
RE: The tariff classification and country of origin of various bismuth products
Dear Mr. Anderson:
In your letter dated February 11, 2019, on behalf of your client, Vitals Materials Co., Limited (Vital), you requested a tariff classification ruling.
The products under consideration are needle shapes, shot and powder derived from 4N/99.99% bismuth ingots. As indicated in your submission, the ingots are sourced from various countries and are sent to China for processing into other forms used in the production of bismuth chemicals.
According to the information provided, both the needle shapes and shot are produced by the same method. First, an ingot is melted down. Then molten bismuth is subjected to H20 quenching which entails dropping the molten metal into water through the appropriate screen to obtain the desired shape. Lastly, the resulting product is dried. The powder, on the other hand, is produced by mechanically crushing an ingot and passing the resulting powder through a sieve to obtain the required size. You state that 90% of this powder is capable of passing through a sieve having a mesh aperture of 1 mm.
The applicable subheading for the needle shapes, shot and powder will be 8106.00.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Bismuth and articles thereof, including waste and scrap. The rate of duty will be free.
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.
In addition to classification, you have also inquired as to the country of origin of the subject products. Based on your submission, you view the Chinese processing as a simple change in physical form and rely upon the unchanged chemical composition of the products from beginning to end to support your claim that a substantial transformation has not taken place. You also cite several rulings to substantiate your position, although none of them involved the transformation of an ingot.
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. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character, or use.
It is the opinion of this office, that a substantial transformation has taken place in China. Bismuth ingots are converted into three different bismuth products: needle shapes, shot and powder. Although these newly formed products may be classified in the same single bismuth subheading as the ingots and may also be considered unwrought products for tariff purposes, they are, in fact, separate and distinct articles of commerce, as they possess a new name, character and use.
The Chinese processing changes a standard 99.99% pure bismuth ingot into specific 99.99% pure bismuth forms. There is little in the character of the ingot that suggests the ultimate form or purpose of the subject products. Conversely, the needle shapes, shot and powder are said to be used in the production of bismuth chemicals when even and rapid dissolution of metal is required, a requirement that the bismuth ingots are not able to fulfill. Furthermore, Vital states that “Each of the three products are in a specific shape for a reason and comprise a specific bismuth grade, therefore the various shapes cannot be exchanged with bismuth in another physical form.” As such, we find the country of origin of the subject products to be China.
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings.
Products of China classified under subheading 8106.00.0000, HTSUS, unless specifically excluded, are subject to the additional 10 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8106.00.0000, HTSUS, listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice 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 April Cutuli at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division