CLA-2-84:OT:RR:NC:N1:104
Mr. Aaron Marx
Crowell & Moring, LLP
1001 Pennsylvania Ave. NW
Washington, DC 20004
RE: The tariff classification of a Modularized Lithium Hydroxide Plant from China
Dear Mr. Marx:
In your letter dated November 1, 2018 on behalf of FMC Lithium USA Corp., you requested a tariff classification ruling.
The Modularized Lithium Hydroxide Plant converts lithium carbonate into lithium hydroxide through a endothermic chemical/double substitution reaction. As water, lithium carbonate and calcium hydroxide are mixed in the reactor, a homogeneous slurry profile is produced. Calcium carbonate is precipitated out and the lithium hydroxide compound is formed. Once the reaction is complete, the precipitated calcium carbonate is separated from the lithium hydroxide solution. The solution is then subjected to crystallization, dewatering, drying and screening before being sent to the storage bins prior to packaging as finished goods.
In your letter, reference is made to Heading 8419, Harmonized Tariff Schedule of the United States, HTSUS, which provides for “ Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnace, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature … , other than machinery or plant of a kind used for domestic purposes; …” as a possible classification for the Modularized Lithium Hydroxide Plant. It is the opinion of this office that the presence of the agitator makes the Modularized Lithium Hydroxide Plant akin to the BioBundle Bioreactor Systems addressed in the Applikon Biotechnology Inc. v. United States (Slip Opinion 11-154/8479.82). In said case, the bioreactor systems, which utilized heat and mixing/stirring, were classified in Heading 8479, HTSUS. In this instance, the facts indicate that the agitation/mixing function of the plant is essential to the system primary purpose of converting lithium carbonate into lithium hydroxide throgh a chemical reaction. The application of heat and steam during the mixing process and the endothermic reaction, respectively, is necessary but heating is not necessary during the separation phase. Thus, the application of heat, while necessary, is secondary or at least equally important to the agitation process. In view of these facts, it is the opinion of this office that the Modularized Lithium Hydroxide Plant is provided for in heading 8479, HTSUS.
Due to the size of the Modularized Lithium Hydroxide Plant, you state that the plant will be “imported unassembled, in modular form” to be assembled subsequent to importation into the United States. Components will be divided into 75 separate steel structures/modules. Modules will contain components such as mixers, reactors, vats, tanks, heaters, centrifuges, pumps and structural elements (stairs, railings, etc.). In view of this fact, you have requested a ruling as to the tariff classification of this plant under the following two scenarios:
A) All modules imported on a single conveyance. B) Modules shipped separately on multiple conveyances meeting the timeframes and
arrival dates outlined in 19 C.F.R. § 141.58(b)(4).
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's taken in order. The instant plant as stated in the ruling request will be delivered disassembled in scenarios A and B. General Rule of Interpretation “GRI” 2(a) states as follows:
Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or failing to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
Furthermore, the Explanatory Notes to the Harmonized Commodity Description and Coding System (ENs) represent the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The EN for GRI 2(a) states in “Rule 2(a) (Articles presented unassembled or disassembled) (V)”:
The second part of Rule 2 (a), provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.
You state that that modules in question are specifically designed to be permanently attached to each other within a common frame. Section XVI, Note 3, HTSUS, states, in relevant part, that composite machines are “machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function”. In this case, the agitator is the module performing the principal function.
In accordance with GRI 2(a) and Note 3 to Section XVI, the applicable subheading for the Modularized Lithium Hydroxide Plant, as described above, will be 8479.82.0040, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Mixing, kneading, crushing, grinding, screening, sifting, homogenizing, emulsifying or stirring machines: Mixing, kneading or stirring machines”. The rate of duty will be free.
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) 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(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) 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 the aforementioned Chapter 99 subheadings.
Products of China classified under subheading 8479.82.0040, 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., 9903.88.01, in addition to subheading 8479.82.0040, 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.
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 Patricia O’Donnell at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division