CLA-2-44:OT:RR:NC:N1:130
Mr. Jacob Fish
United Supply Industries
5620 Fulton Industrial Blvd.
Atlanta, GA 30336
RE: The country of origin of Japanese cedar lumber
Dear Mr. Fish:
In your letter, dated June 12, 2019, you requested a country of origin ruling. Product information was submitted for our review.
You outline a scenario wherein Japanese cedar logs (Cryptomeria japonica (syn. Cupressus japonica)) are harvested in Japan. The logs are further worked in Japan; they are cut to millable lengths and partially debarked. The cut logs are then loaded and shipped to China, where they are milled into dimensional lumber, i.e., cut lengthwise along the grain of the wood into individual boards with continuous rectangular profiles, such as 2x4 boards. You indicate that the boards will be cut to various dimensions; we presume that all of the boards will exceed 6mm in thickness. You do not indicate whether the boards will be planed.
Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)) provides that the "[c]ountry 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 Part 134, Customs Regulations (19 CFR Part 134). Substantial transformation requires that "[t]here must be a transformation; a new and different article must emerge, ‘having distinctive name, character, or use.’" Anheuser-Busch Brewing Association v. United States, 207 U.S. 556, 28 S. Ct 204 (1908).
In the instant scenario, live trees are harvested in Japan, and the logs are cut to millable lengths and partially debarked. Such logs would be classifiable in heading 4403, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Wood in the rough, whether or not stripped of bark or sapwood,or roughly squared. In China, the logs are cut lengthwise along the grain of the wood to create dimensional lumber. Dimensional lumber would be classifiable in heading 4407, HTSUS, which provides for Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm. While Japan is the country of harvest of the trees, the harvested logs undergo significant manufacturing in China. We find that the milling into dimensional lumber in China constitutes a substantial transformation, as the milling yields “a new and different article…‘having distinctive name, character, or use.’” Logs are distinctly different from dimensional lumber. Logs are not traded in the same channels as lumber, e.g., at retail establishments. Logs, generally, are not in a form suitable for building. The milling yields a new and different article – lumber – and constitutes a substantial transformation. The country of origin of the imported lumber will be China.
You do not indicate whether the lumber will be imported in a rough state. “Rough” is defined in Statistical Note 1 to Chapter 44, HTSUS:
For the purposes of heading 4407, the term "rough" includes wood that has been edged, resawn, crosscut or trimmed to smaller sizes but it does not include wood that has been dressed or surfaced by planing on one or more edges or faces or has been edge-glued or end-glued.
We will, therefore, provide classifications for both rough and planed lumber.
The applicable subheading for the rough Japanese cedar dimensional lumber will be 4407.19.1076, HTSUS, which provides for Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm: Coniferous: Other: Other: Other: Not treated: Other cedar (Thuja spp., Juniperus spp., Chamaecyparis spp., Cupressus spp. and Libocedrus spp.): Rough. The rate of duty will be free.
The applicable subheading for the non-rough Japanese cedar dimensional lumber will be 4407.19.1077, HTSUS, which provides for Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm: Coniferous: Other: Other: Other: Not treated: Other cedar (Thuja spp., Juniperus spp., Chamaecyparis spp., Cupressus spp. and Libocedrus spp.): Other. The rate of duty will be free.
Effective July 6, 2018, the Office of the United States Trade Representative 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(f), HTSUS. For additional information see “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). Products of China that are provided for in subheading 9903.88.03 and classified in one of the subheadings enumerated in U.S. note 20(f) 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 subheading 9903.88.03.
Products of China classified under subheadings 4407.19.1076 and 4407.19.1077, HTSUS, unless specifically excluded, are subject to the additional 25 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 4407.19.1076 and 4407.19.1077, 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.
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.
Importation of these products may be subject to import regulations administered by the U.S. Department of Agriculture (U.S.D.A.). Information regarding applicable regulations administered by the U.S.D.A. may be addressed to that agency at the following location: U.S. Department of Agriculture A.P.H.I.S., PPQ 4700 River Road, Unit 136 Riverdale, MD 20737
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 Laurel Duvall at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division