CLA-2-73:OT:RR:NC:N1:116
Mr. David Townsend
Dorsey & Whitney
50 South Sixth Street, Suite 1
Minneapolis, Minnesota 55402
RE: The country of origin of stainless steel tubes; Applicability of Section 232 Duties
Dear Mr. Townsend:
In your letter dated January 27, 2021, you requested a country of origin ruling on behalf of your client, Banner Industries of Northeast (N.E.), Inc.
The products under consideration are stainless steel tubes for use in semiconductor fabrication plants. According to your submission, stainless steel tubes manufactured in Germany, South Korea or the United States (U.S.) are electropolished and cleaned in Germany. Following these finishing operations, the tubes are imported to the U.S. You state that prior to electropolishing and cleaning in Germany, the tubes are classified in either subheadings 7304.41.30, 7304.41.60 or 7306.40.5040, Harmonized Tariff Schedule of the United States (HTSUS), and remain classified in those subheadings after these operations are performed and upon importation into the U.S.
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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.”
Please be advised when determining the country of origin for purposes of applying current trade remedies under Section 301, Section 232, and Section 201, the substantial transformation analysis is applicable. See HQ H301619 (Nov. 6, 2018); see also HQ 563205 (June 28, 2006); and Belcrest Linens v. United States, 741 F.2d 1368, 1370-71 (Fed. Cir. 1984) (stating that “the term ‘product of’ at the least includes manufactured articles of such country or area” and that substantial transformation “is essentially the test used…in determining whether an article is a manufacture of a given country”).
The test for determining whether a substantial transformation will occur 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. See 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). Also, the court in Uniroyal, Inc. v. United States, 3 CIT 220, 542 F.Supp. 1026, aff'd 1 Fed. Cir. 21, 702 F.2d 1022 (1983), emphasized that a substantial transformation will not result from manufacturing or combining processes that are minor in nature and leave the identity of the imported article intact.
In determining whether machining operations effect a substantial transformation, Customs distinguishes between the kind and amount of further processing performed, i.e. between machining operations performed to achieve a specified form and those performed to achieve more cosmetic or minor processing operations. See C.S.D.s 89-121 and 90-53. Customs consistently has found that embellishment and finishing operations, such as polishing, enameling and cleaning, are not regarded as extensive processes that result in a new and different article of commerce.
See HQ 554689 (August 21, 1987) and HQ 071314 (May 10, 1983).
Based on the information provided, the stainless steel tubes, which are manufactured in either Germany, South Korea or the United States (U.S.), are electropolished and cleaned in Germany. This office finds that the polishing and cleaning operations performed in Germany do not result in a substantial transformation. The products in question are tubes prior to polishing and cleaning and remain tubes upon importation to the U.S. As such, the country of origin of the subject tubes will be the country in which they are manufactured (i.e., Germany, South Korea or the U.S.).
On March 8, 2018, Presidential proclamations 9704 and 9705 imposed additional tariffs and quotas on a number of steel and aluminum mill products. Exemptions have been made on a temporary basis for some countries. Quantitative limitations or quotas may apply for certain exempted countries and can also be found in Chapter 99. Additional duties for steel of 25 percent and for aluminum of 10 percent are reflected in Chapter 99, subheading 9903.80.01 for steel and subheading 9903.85.01 for aluminum. Products classified under subheadings 7304.41.30, 7304.41.60 and 7306.40.5040, HTSUS, may be subject to additional duties or quota. At the time of importation, you must report the Chapter 99 subheading applicable to your product classification in addition to the Chapter 72, 73 or 76 subheading listed above.
The Proclamations are subject to periodic amendment of the exclusions, so you should exercise reasonable care in monitoring the status of goods covered by the Proclamations and the applicable Chapter 99 subheadings.
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