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HQ 083733


May 1, 1989

CLA-2 CO: R:C:G: 083733 JLJ, 835140

Category: CLASSIFICATION

TARIFF NO.: 4418.90.40

Mr. Gordon Leontowich, Director
Western Wood Preservers, Ltd.
26035 31B Avenue
Aldergrove, British Columbia, VOX IAO
Canada

RE: Tariff classification of drilled lumber sent to Canada to be microincised and pressure treated with a preserative

Dear Mr. Leontowich:

You requested a tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) for United States drilled lumber which is shipped to Canada to be microincised and pressure treated with a preservative, then imported into the United States.

FACTS:

You state that Bellingham Marine Industries Inc., of Bellingham, Washington, has sent its United States cut and drilled Douglas fir (i.e., softwood) lumber to your firm in British Columbia, Canada, for treatment for more than three years. Under the Tariff Schedules of the United States (TSUS), the lumber was imported into the United States under the tariff provision for lumber and wood siding, drilled or treated: softwood lumber and siding, drilled, or pressure treated with wood creosote or other wood preservative, or both, but not otherwise treated, in item 202.52, TSUS, which was a duty-free provision. We note that item 202.52, TSUS, specifically provided for drilled softwood lumber which had been pressure treated with a wood preservative.

Under the HTSUSA, you have been advised by a Customs import specialist that the returning lumber is subject to duty under the provision for builders' joinery and carpentry of wood, other, other, in subheading 4418.90.40, HTSUSA, which carries a 5.1 percent ad valorem duty rate. You believe that this subheading is incorrect because merchandise classified accordingly is
subject to duty, while the instant lumber was duty-free under the TSUS. You ask that Customs reconsider this advice.

The exact details of the finishing of the lumber are as follows:

1. United States softwood lumber cut to dimensional stock sizes and drilled with as many as 6 holes per piece are sent from Bellingham Marine Industries (BMI) in Washington state to Western Wood Preservers, Ltd. (WWP), in British Columbia, Canada.

2. In Canada, WWP microincises and pressure treats the lumber with chromated copper arsenate (CCA), a water borne preservative purchased from a United States firm.

3. Once the lumber has been treated, it is exported to the United States.

Once back in the United States, BMI uses the drilled and pressure treated lumber for making flotation units and docks for marinas. (You advise that the end use of the instant lumber is such that the drilling and cutting to dimensional stock size must be done before the pressure treatment with CCA. The drilled holes are used for fasteners, such as bolts and pins, necessary to assemble the docks.)

ISSUE:

What is the tariff classification of such drilled and treated lumber under the HTSUSA?

LAW AND ANALYSIS:

You argue that subheading 4418.90.40, HTSUSA, is not applicable to the drilled lumber in question because it results in the merchandise being subject to duty. You believe that this is an inequitable result, particularly since the United States- Canada Free Trade Agreement (CFTA) was intended to lower and eliminate duty rates between the two countries and since the CFTA was inaugurated at the same time as the HTSUSA.

Heading 4418, HTSUSA, reads as follows:

Builders' joinery and carpentry of wood, including cellular wood panels and assembled parquet panels; shingles and shakes.

The Explanatory Notes, HTSUSA, for Heading 4418 state that:

This heading applies to woodwork, including that of wood marquetry or inlaid wood, used in the construction of any kind of building, etc., in the form of assembled goods or as recognizable unassembled pieces (e.g., prepared with tenons, mortises, dovetails or other similar joints for assembly), whether or not with their metal fittings such as hinges, locks, etc.

The term..."carpentry" refers to woodwork (such as beams, rafters and roofstruts) used for structural purposes...

Inasmuch as the instant drilled, treated lumber is used for structural purposes in the construction of flotation units and docks for marinas and fits within Heading 4418, it must be classified accordingly. Since the instant lumber does not fit within any of the eo nomine subheading in Heading 4418 and is not edge-glued lumber, it is classified as builders' joinery and carpentry of wood, other, other, in subheading 4418.90.40, HTSUSA.

We note that another letter concerning the instant lumber, from Mr. Robert L. Wenman, a member of the Canadian Parliament, raises two other possible HTSUSA classifications, in Heading 4403 or Heading 4407, HTSUSA. Heading 4403 provides for wood in the rough, whether or not stripped of bark or sapwood, or roughly squared; it covers wood in the rough prior to being made into lumber, e.g., timber, poles and logs. The Explanatory Notes to Heading 4403 state that this heading excludes wood cut in the form of planks, beams, etc., which are covered in either Heading 4407 or 4418, depending upon what has been done to the wood. Heading 4407 covers wood sawn or chipped lenghwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding 6 millimeters. The Explanatory Notes to Heading 4407 indicate that this heading covers such products as sawn beams, planks, flitches and boards. Wood classified in Heading 4407 may only be planed, sanded or finger-jointed; it may not be further processed. Again, the Explanatory Notes to Heading 4407 specifically state that the heading excludes builders' joinery and carpentry, which is classified in Heading 4418.

Mr. Wenman also argues that subheading 9802.00.40, HTSUSA, may be applicable to the instant lumber. Subheading 9802.00.40 provides for articles exported for repairs or alterations; it is the successor of item 806.20, TSUS, with identical language.

Concerning the application of item 806.20, TSUS, it has been held that the operations performed on the articles must not constitute a part of the total manufacturing process begun in the United States. Dolliff & Company, Inc. v. United States, 66 CCPA 77, C.A.D. 1225 (1979).

Lumber which is specifically intended for exterior construction, ground contact areas or marine use is not a finished product until it has been further manufactured by being pressure treated with a wood preservative.

The instant lumber exported to Canada is not a finished product ready for its intended use. The microincising and pressure treatment of the lumber in Canada constitutes a part of the manufacturing process begun in the United States.

The Canadian finishing operations exceed the scope of the term "repairs or alterations" under item 806.20, TSUS, and hence under subheading 9802.00.40, HTSUSA. Guardian Industries Corporation v. United States, 3 CIT 9, Slip Op. 82-4 (1982). Therefore, the drilled and pressure treated lumber is not entitled to the benefits of this provision.

Goods classified in subheading 4418.90.40, HTSUSA, which originate in Canada are entitled to a 4.5 percent ad valorem rate of duty under the CFTA upon compliance with all applicable regulations.

HOLDING:

The instant drilled, treated lumber is classified as other carpentry in subheading 4418.90.40, HTSUSA.

Sincerely,

John Durant, Director

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