CLA-2-72:OT:RR:NC:N1:117
Misty G. Gibbins
Pacific Customs Brokers Inc.
1400 A Street
Blaine, Washington 98230
RE: The tariff classification and country of origin certain steel coils imported from Canada
Dear Ms. Gibbins:
In your letter dated March 16, 2022, on behalf of Meteor Horticulture Systems Inc., dba Meteor Systems, you requested a tariff classification ruling.
The products under consideration are certain steel coils imported from Canada. According to your submission, coils of hot-dipped galvanized, primed and polyester coated cold-rolled nonalloy steel are manufactured in France. Measuring from 1120 mm to 2000 mm in width and 0.6 mm in thickness, this material is sent to the Netherlands where it is uncoiled, slit to widths of either 312 mm or 375 mm, punched/perforated with two holes at equal intervals along its length, recoiled and, subsequently, shipped to Canada. The coils will then be sent to the United States where they are to be used in the manufacture of greenhouse gutter systems.
The applicable subheading for the subject coils will be 7212.40.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Flat-rolled products of iron or nonalloy steel, of a width of less than 600 mm, clad, plated or coated: Painted, varnished or coated with plastics: Other. The rate of duty will be free.
You have asked us to consider whether the slitting and perforating have an effect on the country of origin of the coils. 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.
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). 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). We find that the operations performed in the Netherlands, namely slitting and perforating, do not result in a substantial transformation. The merchandise leaves France as a flat-rolled product, and despite the further processing performed in the Netherlands, remains as such. Therefore, we find that the country of origin of the subject steel coils is France.
Though you are of the same opinion, you arrived at your decision based on a CFR 102 analysis. Because the coils are merely shipped into and out of Canada and not processed in that country, they are not goods of a USMCA country, and therefore, the country of origin cannot be determined on this basis.
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.
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 subheading 7212.40.5000, 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 April Cutuli at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division