CLA-2-74:OT:RR:NC:N1:116
Mr. Steven Zisser
Zisser Customs Law Group
9355 Airway Road
San Diego, CA 92154
RE: The tariff classification and applicability of 9802.00.60 to copper strands manufactured from scrap gathered in the United States and returned to the United States for further processing
Dear Mr. Zisser:
In your letter dated February 16, 2022, you requested a tariff classification ruling on behalf of your client, Sark Wire. In particular, you are seeking a determination as to whether certain copper strand from Turkey qualifies for a reduction in duty under subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUS).
The product to be imported is copper strand produced from United States (U.S.) origin industrial scrap. First, the U.S. origin industrial copper scrap will be exported to Turkey where it will be processed into wire rods. Second, the copper wire rods will be drawn to create copper wire of different gauge. Third, the copper wire will be bunched and twisted to create wire strand. At this point, the copper wire strand will be returned to the U.S. where it will be further processed into cable by adding insulation.
The applicable subheading for the copper stranded wire will be 7413.00.1000, HTSUS, which provides for stranded wire cables, plaited bands and the like, including slings and similar articles, of copper, not electrically insulated: not fitted with fittings and not made up into articles: stranded wire. The general rate of duty is 3 percent ad valorem.
You have also requested a determination about on the eligibility of subheading 9802.00.60, HTSUS, which provides a partial duty exemption for:
[a]ny article of metal . . . manufactured in the United States or subject to a process of manufacture in the United States, if exported for further processing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United States, is returned for the United States for further processing.
Subheading 9802.00.60, HTSUS, therefore imposes four requirements: (1) the merchandise must be an article of metal; (2) the metal must either be manufactured in the United States or subject to a process of manufacture in the United States; (3) the metal must be exported for further processing; and (4) the metal must be returned to the United States for further processing.
For purposes of subheading 9802.00.60, HTSUS, “metal” includes “base metals enumerated in note 3 to section XV,” which in turn includes copper. Therefore, the copper scrap will qualify as an “article of metal” under subheading 9802.00.60, HTSUS, satisfying the first requirement.
The copper scrap is produced by Sark Wire’s day-to-day processing operation of drawing copper rod into wire. Industrial scrap is leftover metal from manufacturing operations performed on metal articles. If the subject copper scrap is not obtained from manufacturing operations performed on metal articles, Sark Wire may purchase U.S produced industrial scrap from other U.S. companies or scrapyards. You state that, in all cases, the industrial scrap used is the result of processing metal in the U.S. According to your submission, the industrial copper scrap obtained from leftover manufacturing operations or purchased from other U.S. companies or scrapyards may in some cases result from processing non-U.S. origin copper articles. In HQ 555096, it was determined that in order for scrap to be eligible under the statute where foreign metal is involved, the scrap must be obtained from the processing of foreign metal in the U.S. The same ruling also found if the metal article from which the scrap was obtained was subjected to a variety of processes of manufacture in the U.S. including splitting, annealing, milling, rolling, brushing, and leveling, it would satisfy the second requirement. In this case, the U.S. or non-U.S. origin copper rod from which the scrap is produced is subjected to drawing. Therefore the copper scrap, which is a by-product of U.S. processing operations of drawing copper rod into copper wire, qualifies under subheading 9802.00.60, HTSUS, satisfying the second requirement.
The copper scrap is exported to Turkey where it is processed into copper wire rods and then drawn to create copper wires. The copper wires are then bunched and twisted into copper wire strands. The conversion of copper scrap to copper wire rod, copper wire rod to copper wire, and then copper wire to copper wire strands, not only changes the shape of the metal, but also imparts new and different characteristics to the copper, constituting “further processed” under this tariff provision, satisfying the third requirement.
And finally, the copper wire strand is returned to the U.S. where it is covered with insulation. At this stage, the insulating material is added by an extrusion process at a high temperature where a uniform thickness of plastic insulation is deposited onto the entire length of the reels of bare, stranded wire. The process of insulating copper wire strand and the subsequent fabrication of insulated cable constitutes “further processed” in the U.S., satisfying the fourth requirement. Accordingly, the subject merchandise may be entered under subheading 9802.00.60, HTSUS, with duty only upon the value of the foreign processing contingent upon compliance with applicable regulations.
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 at https://hts.usitc.gov/current.
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