CLA-2-72:RR:NC:1:117 H84171
Mr. Brian Barnett
Kanematsu USA, Inc.
5847 San Felipe, Suite 2121
Houston, Texas 77057
RE: The tariff classification and country of origin of cold-rolled flat-rolled stainless steel produced from hot-rolled stainless steel coils from various countries, including France, Spain, Japan, Korea, Taiwan and South Africa.
Dear Mr. Barnett:
In your letter dated July 23, 2001, you requested a tariff classification ruling. You also ask about the country of origin of the product that is imported into the United States.
The products to be imported are cold-rolled flat-rolled stainless steel products in coil and cut-to-length form. These flat-rolled products range from 50 mm to 1219 mm in width and from 0.25 mm to 2.0 mm in thickness. Some of the products will have a No. 2B or No. 2D unpolished cold-rolled finish and some will have a No. 3 or No. 4 polished finish.
The applicable subheading for the cold-rolled flat-rolled stainless steel products measuring 600 mm or more in width and measuring over 1 mm but less than 3 mm in thickness will be 7219.33.00, Harmonized Tariff Schedule of the United States (HTS), which provides for flat-rolled products of stainless steel, of a width of 600 mm or more, not further worked than cold-rolled (cold-reduced), of a thickness exceeding 1 mm but less than 3 mm. The rate of duty will be 3 percent ad valorem.
The applicable subheading for the cold-rolled flat-rolled stainless steel products measuring 600 mm or more in width and measuring 0.5 mm or more but not over 1 mm in thickness will be 7219.34.00, HTS, which provides for flat-rolled products of stainless steel, of a width of 600 mm or more, not further worked than cold-rolled (cold-reduced), of a thickness of 0.5 mm or more but not exceeding 1 mm. The rate of duty will be 3 percent ad valorem.
The applicable subheading for the cold-rolled flat-rolled stainless steel products measuring 600 mm or more in width and measuring less than 0. 5 mm in thickness will be 7219.35.00, HTS, which provides for flat-rolled products of stainless steel, of a width of 600 mm or more, not further worked than cold-rolled (cold-reduced), of a thickness of less than 0.5 mm. The rate of duty will be 3 percent ad valorem.
The applicable subheading for the cold-rolled and polished flat-rolled stainless steel products measuring 600 mm or more in width of any thickness will be 7219.90.00, HTS, which provides for flat-rolled products of stainless steel, of a width of 600 mm or more, other. The rate of duty will be 1.8 percent ad valorem.
The applicable subheading for the cold-rolled flat-rolled stainless steel products measuring 300 mm or more but less than 600 mm in width will be 7220.20.10, HTS, which provides for flat-rolled products of stainless steel, of a width of less than 600 mm, not further worked than cold-rolled (cold-reduced), of a width of 300 mm or more. The rate of duty will be 3 percent ad valorem.
The applicable subheading for the cold-rolled flat-rolled stainless steel products measuring less than 300 mm in width and over 1.25 mm in thickness will be 7220.20.60, HTS, which provides for flat-rolled products of stainless steel, of a width of less than 600 mm, not further worked than cold-rolled (cold-reduced), of a width of less than 300 mm, of a thickness exceeding 1.25 mm. The rate of duty will be 3.5 percent ad valorem.
The applicable subheading for the cold-rolled flat-rolled stainless steel products measuring less than 300 mm in width and measuring over 0.25 mm but not over 1.25 mm in thickness will be 7220.20.70, HTS, which provides for flat-rolled products of stainless steel, of a width of less than 600 mm, not further worked than cold-rolled (cold-reduced), of a width of less than 300 mm, of a thickness exceeding 0.25 mm but not exceeding 1.25 mm. The rate of duty will be 3.2 percent ad valorem.
The applicable subheading for the cold-rolled flat-rolled stainless steel products measuring less than 300 mm in width and 0.25 mm or less in thickness will be 7220.20.90, HTS, which provides for flat-rolled products of stainless steel, of a width of less than 600 mm, not further worked than cold-rolled (cold-reduced), of a width of less than 300 mm, of a thickness not exceeding 0.25 mm, other. The rate of duty will be 2.4 percent ad valorem.
The applicable subheading for the cold-rolled and polished flat-rolled stainless steel products measuring less than 600 mm in width of any thickness will be 7220.90.00, HTS, which provides for flat-rolled products of stainless steel, of a width of less than 600 mm, other. The rate of duty will be 1.7 percent ad valorem.
You ask whether the imported products which are cold-rolled in Indonesia from hot-rolled flat-rolled stainless steel produced in various other countries, including France, Spain, Japan, Korea, Taiwan and South Africa, have been substantially transformed in Indonesia. The hot-rolled steel coils undergo the following processing operations in Indonesia. They go through a 20Hi- Sendzimir mill where they are cold-rolled, reducing the thickness of the coil from approximately
3 to 4 mm down to 0.25 to 2 mm. The steel is then pickled to clean it and remove the scale, after which it is annealed or heat-treated to give it the necessary formability. The steel goes through a 2Hi skin pass mill for a final cold-rolling to obtain the appropriate surface finish. At this point, the steel has either a No. 2B or No. 2D unpolished cold-rolled finish. When required, the steel will be polished to a No. 3 or No. 4 polished finish. The steel will finally be slit to narrower widths or cut to sheets to meet specific customer requirements. You state that the cost of producing the hot-rolled coils is approximately $800/MT and the cost of processing the finished cold-rolled flat-rolled products is approximately $500-600/MT.
A substantial transformation occurs when, as a result of manufacturing processes, a new and different article emerges, having a distinctive name, character or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process.
The issue concerning the country of origin/substantial transformation of cold-rolled flat-rolled steel produced from hot-rolled coils has been previously addressed in Headquarters’ rulings 080277 dated September 21, 1987 and 089538 dated August 7, 1991. It was held in both these rulings that the cold-rolling process alters the physical and mechanical properties of the steel, that hot-rolled and cold-rolled flat-rolled steel are commercially distinguishable and marketable to different groups and that the cold-rolling processing operations significantly increased the value/cost of the steel product. The cold-rolled flat-rolled steel was found to meet the substantial transformation test, that is, it has a name, character, and use different from that possessed by the hot-rolled flat-rolled steel. Both rulings held that the steel became a product of the country in which the cold-rolling occurred.
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 Paula Ilardi at 212-637-7016.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division