CLA-2-73:OT:RR:NC:N1:117
Mr. Brett T Lipman
KPMG LLP
550 S Tryon St.
Charlotte NC 28202
RE: The country of origin of a plastic-lined, alloy steel line pipe assembled in Canada using United States (U.S.) origin steel pipe
Dear Mr. Lipman:
In your letter dated May 10, 2019 you requested a country of origin ruling determination for your client, CORE Linepipe for purposes of applicability of trade remedy Section 232 as it applies to steel.
The merchandise under consideration is CORE Liner pipe, a pipe-in-pipe system that utilizes an outer steel pipe for structural strength and an inner polymer liner pipe for corrosion resistance. The CORE Liner pipe is marketed for use in the oil industry (specifically frac water, produced water, or enhanced oil recovery transport).
You state the outer steel pipe is of U.S. origin. The outer pipe is exported to Canada, where it is visually inspected and cleaned. Once cleaned, the ends are widened by hand operation of a hydraulic swage, in preparation of the insertion of ClickWeld components and fittings. After a plastic coupling is fused halfway onto the polymer pipe, the polymer pipe is then inserted into the steel pipe. Pressing the ClickWeld components into the coupling end of the pipe completes the processing done in Canada.
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 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. The courts have held that 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). 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).
With regard to the origin of the subject pipe, it is the opinion of this office that the processing performed in Canada does not result in a change in name, character, or use. The pipe enters Canada as a line pipe and leaves Canada as a line pipe. The processing performed in Canada does not affect a substantial transformation. Based upon the facts presented, it is the opinion of this office that the origin of the line pipe is the U.S. and is therefore not subject to Presidential proclamations 9704 and 9705, also known as Trade Remedy Section 232. 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].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division