HQ 0083331 - Classification of insulated composite panels - United States International Trade Commision Rulings

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HQ 083331

May 2, 1989

CLA-2 CO:R:C:G 083331 VEA

CATEGORY: CLASSIFICATION

TARIFF NO.: 7308.90.90

Mr. Robert Keller
Trans-National Trade Development Corp.
2 Dag Hammarskjold Plaza
New York, New York 10017

RE: Classification of insulated composite panels

Dear Mr. Keller:

In a letter to our New York office dated November 8, 1989, you requested a ruling on the tariff classification of foam core insulating composite panels imported from Spain, under the Harmonized Tariff Schedule (HTS).

FACTS:

The merchandise in question consists of plastic foam core insulating composite panels manufactured by Perfrisa, a company in Spain. These panels consist of two steel sheets (an internal and external sheet, which are cold-rolled from pre- finished steel coils) and a plastic foam center (rigid polyurethane foam or polyisocyanurate foam). The steel sheets are 26 ga. hot dipped galvanized G-90 specification meeting ASTM-A-525, and are finished with one of the following coatings: PVF-2 (Kynar) silicone polyester color coating, PVC (Plastisol), or galvanized. The rigid polyurethane foam or polyisocyanurate foam serves as insulation and fills the space between the metal sheets. The panels are attached with a special joint and clamp system, and all the joints and fastners are concealed and protected by snap-on capping pieces. The joint capping pieces are 22 ga. hot-dipped galvanized G-90 steel sheet meeting specification ASTM-A-525, with the same finishes as the external and internal sheets. The panels are
approximately three feet wide. Their thickness varies from one and three-eights inches to six inches, depending on the desired insulation, and they are usually from 3 to 38 feet long.

These panels are used in various buildings requiring insulation. You argue that they should be classified in subheading 4411.29.20 as laminated boards bonded in whole or in part, or impregnated, with synthetic resins and dutiable at a rate of 2.9c/kg plus 2.3%, or in heading 3925 as builders' wares of plastics. Our New York office classified the merchandise under subheading 7308.90.90 as parts of structures (File # 834289).

This inquiry has been submitted to Headquarters for a proper tariff classification.

ISSUE:

Whether the composite insulated panels are properly classified as laminated boards bonded in whole or in part in subheading 4411.29.20 and dutiable at a rate of 2.9c/kg plus 2.3% percent ad valorem; as builders' wares of plastics in subheading 3925.30.50 and dutiable at a rate of 5.3 percent ad valorem; or as structures in subheading 7308.90.9090 and subject to a duty rate of 5.7 percent ad valorem.

LAW AND ANALYSIS:

The General Rules of Interpertation (GRI's) govern classification under the Harmonized Tariff Schedule. According to GRI 1, the primary consideration in determining whether merchandise should be classified in a heading should be given to the language of the heading and to any relevant chapter or section notes. The headings at issue in this case include:

4411 Fiberboard of wood or other ligneous materials whether or not bonded with resins or other organic substances:

4411.29 Other:

Tongued, grooved or rabbetted continuously along any of its edges and dedicated for use in the construction of walls, ceil- ings or other parts of buildings:

4411.29.20 Laminated boards bonded in whole or in part, or impreg- nated, with synthetic resins.

3925 Builders' ware of plastics, not elsewhere specified or included:

3925.30.50 Other

7308 Structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, balustrades, pillars and columns) of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel:

7308.90.90 Other

7308.90.9090 Other

Under GRI 1, the merchandise at issue in this case cannot be classified in heading 4411. To qualify for classification in chapter 44, an article must be made of wood, or a wood-related product. The Explanatory Notes, the official interpretation of the HTS at the international level, although not legally binding, provide some guidance on interpreting provisions under the HTS and also confirm that the items classified in heading 4411 are made of wood. The Explanatory Notes to heading 4411 state that fiberboard is most often manufactured from wood chips which have been mechanically defibred (defibrated) or steam exploded or from other defibred ligno-cellulosic material.

The article in this case is not a wood, or a wood- related product. The panels are made of two 1/16 inch steel sheets and a plastic foam center and, therefore does not meet the primary requirement for classification in heading 4411.

The importer also argues that the composite panels qualify as builders' ware of plastics, classifiable in heading 3925. To be classified in this heading, an article must be a builders' ware made of plastic and not included in any other provision. As sections for walls and roofs of buildings, these panels are builder's wares. Even though the panels in this case are composed of a plastic foam center, they are also composed of steel components. Heading 7308 provides for structures and parts of structures made of iron and steel. Therefore, there are two headings, which describe the panels, but each heading refers to only one of the materials in the panel. Under GRI 2(b), the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3.

GRI 3(a) directs us to 3(b). According to 3(b), mixtures and composite goods consisting of different materials, or made up of different components, shall be classified as if they consisted of the material or component which gives them their essential
character. The factor that determines the essential character of an article varies between the different kinds of articles. It may be the nature of the material or component, its weight, value, bulk, or quantity, or its role in relation to the use of the goods.

The panels at issue in this case consist of four parts: the external steel sheet, the internal steel sheet, the plastic foam center and the special joint and clamp system made of steel. The importer argues that the plastic foam center gives the composite panels their essential character, because it comprises a larger part of the cost of the finished product, represents a larger volume of the finished product, and its thickness determines the thermal values of the panel. The combined plastic foam cost is 30% of the finished product, while the steel cost is only 15%.

We agree with the importer that these factors are to be considered in assessing essential character. However, they are not dispositive of the issue in this case. The role that the steel sheets and the steel fastners play in relation to the use of the panel suggests that the steel components give the panels their essential character. The panels comprise four parts, three of which are steel components, i.e. the external steel sheet, the internal steel sheet, and the special joint clamp system. Clearly, the steel components provide the bulk of the product. The quantity of the plastic foam in each panel is determined by the individual purchaser's specification depending on the desired level of insulation, and can vary from as little as one inch to as much as six inches. The steel sheets provide the exterior and interior walls of the structure, and also give the panels their outward appearance. Moreover, the panel is only able to function as a panel if its three key parts are connected. The joint capping piece, the connector, also made of steel performs that function. Under these facts, the steel components give the composite panels their essential character.

Based on the facts presented in this case and the language of heading 7308, it is the appropriate heading for classifying the composite panels. To be classified in this heading, an article must one, be a structure, or a part of a structure; and two, be made of iron and steel. There are no relevant section or chapter notes under chapter 73. The

Explanatory Notes to heading 7308 note that these structures are made up from bars, rods, tubes, angles, shapes, sections, sheets, plates, wide flats including so-called universal plates, hoop, strip forgings or castings, by riveting, bolting, or welding; and once they are put in a position, they generally remain in that position.

The composite panels at issue have these characteristics. They are made of two 26 ga. hot-dipped galvanized steel sheets. After the steel sheets are put together to form the panel, these panels make up the interior and exterior walls of the structures, and thus remain in a fixed position. Since it has been established that the steel components give these panels their essential character, they meet the requirement that they be made of iron or steel.

HOLDING:

The composite insulated panels are properly classified classified as structures in heading 7308, subheading 7308.90.9090 and subject to a duty rate of 5.7 percent ad valorem. Articles classified in heading 7308 require an original valid Export Certificate to enter the Commerce of the United States. If you need additional information regarding this requirement, you should contact the Office of Agreements Compliance, Department of Commerce, at 14th and Constitution Ave., N.W., Washington, D.C. 20230 (202-377-4037).

Sincerely,

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