United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1990 HQ Rulings > HQ 0085561 - HQ 0085622 > HQ 0085594

Previous Ruling Next Ruling


HQ 085594


January 29, 1990

CLA-1 CO:R:C:G 085594 KWM

CATEGORY: CLASSIFICATION

TARIFF NO.: 3907.99.0050

Mr. Charles Johnson
Powder Coatings Division
Ferro Corporation
P.O. Box 6550
4150 East 56th Street
Cleveland, Ohio 44101

RE: Reconsideration of NYRL 839783, powder coatings

Dear Mr. Johnson:

We have received your letter of September 19, 1989, requesting reconsideration of a classification ruling under the Harmonized Tariff Schedule of the United States (hereinafter "HTSUSA") for "Powder Coatings". Upon careful consideration of your submission, we have determined that the ruling in question is correct, and we decline to revoke or modify such ruling for the reasons set forth below.

FACTS:

In a letter dated March 28, 1989, you requested of our New York office a binding tariff classification ruling under the HTSUSA for "VP-188 Clear Polyester Powder Coating". A breakdown of the component materials in VP-188 powder coating reveals that "saturated polyester resin" constitutes over 89% of the goods. Of the remaining components, none exceeds 6.6% (triglycidyl isocyanurate), and most are less than 1%.

The classification ruling issued in response to your letter classified the subject goods in HTSUSA subheading 3907.99.0050, as an article of plastic, specifically of other polyesters. That classification was based upon the rationale, that the polyester resin component of the goods provided the essential character of the goods. Your current letter, dated September 19, 1989, questions that rationale, and requests our reconsideration of the ruling.

ISSUE:

Is the powder coating classified in subheading 3910.99.0050, HTSUSA? If not, what is the proper classification?

LAW AND ANALYSIS:

After considering your request of September 19, 1989, we have determined that New York Ruling Letter (hereinafter "NYRL") 839783 correctly classifies the subject powder coating.

NYRL 839783

Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (hereinafter "GRI(s)") 1 through 5. The systematic detail of the harmonized system is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relevant Section or Chapter Notes. Then, if GRI 1 fails to classify the goods, and if the headings and legal notes do not otherwise require, the remaining GRIs may be applied, taken in order.

In reviewing the eligible headings for classification of powder coatings, we note that heading 3210, HTSUSA, may include goods such as these. That heading reads:

3210 Other paints and varnishes (including enamels, lacquers and distempers); prepared water pigments of a kind used for finishing leather.

The question is this case is whether the VP-188 polyester powder coating is considered a "paint" within the terms of the heading. In our opinion, it is not. NYRL 839783 stated that the powder coating in question did not qualify as a paint because it was not dispersed in a liquid medium. In your letter of September 19, you dispute that finding based on a reading of the heading terms, which do not appear to require dispersion in a liquid medium for classification purposes. While we agree that the heading terms do not include the terms "dispersed in a liquid medium", we are of the opinion that goods must be in such a form for inclusion in heading 3210, HTSUSA.

The Explanatory Notes to the Harmonized Tariff Schedule, while not legally binding, do constitute the official interpretation of the tariff headings at the international level. Because the heading in question here is a 4-digit, or international level heading, they are particularly pertinent. The Explanatory Notes are intended to provide guidelines for determining what goods are included within the scope of the tariff heading terms "other paints and varnishes". While the heading terms in this case do not include a reference to dispersion of paint in an aqueous or non-aqueous medium, the notes indicate that the heading classifies goods of that type. The exemplars of Explanatory Notes A(1)-(3)and B(1)-(5) for heading 3210 are products either dispersed in solution or in liquid form. Further, all of the headings terms in Chapter 32 must be considered in pari materia, or in relation to other headings of the chapter and of the nomenclature. Heading 3210, HTSUSA, read in pari materia, is a 'basket' provision for those headings which immediately precede it, and classifies paints dispersed in an aqueous or non-aqueous medium not specifically included in the prior headings (i.e., headings 3208 and 3209, HTSUSA).

Moreover, the Explanatory Notes to heading 3210, HTSUSA, also include the following:

This heading does not cover:

(c) Powder paints consisting principally of plastics and containing additives and pigments, used for application to objects by the effect of heat with or without the application of static electricity, and . . . ([of] Chapter 39). (Emphasis added)

Exclusion (c) of the Explanatory Notes would appear to encompass goods of the type at issue here. The exclusion, we believe, clearly manifests an intent by the drafters of the nomenclature not to classify goods of this type in heading 3210, but in Chapter 39, under a plastics-related heading. The Explanatory Notes to Chapter 39 reiterate this intent by providing for the inclusion of goods such as these in the plastics-related headings of that chapter:

Headings 39.01 to 39.14 . . . appl[y] only to the following forms:

(2) Powder, granules and flakes: . . . Powders may be used, for example, to coat objects by the application of heat with or without static electricity. (Emphasis added)

It is the opinion of this office that powder paints such as those at issue here are not classified in Chapter 32, HTSUSA, but are excluded from the headings of that chapter. Further, powder paints such as these containing high proportions of plastic resins are classified in the plastics-related headings of Chapter 39, HTSUSA.

In addition to the provisions of the Explanatory Notes, the application of the GRIs underscores the classification of powder paints such as these in a plastics-related heading. Since no other heading exists whose terms would include these goods, they are classified by application of GRI 3. Under GRI 3, composite goods such as these are classified by determining which of the component materials provides the goods with their essential character. After reviewing the material breakdown you provided, we are of the opinion that the polyester resin component provides the essential character. This determination is based primarily on the overriding percentage of the goods which the polyester resin comprises. We are also of the opinion that this case illustrates the policy rationale for excluding powder paints such as these from the 'paint' headings of Chapter 32, as expressed in the Explanatory Notes. When, as in this case, a product's nature is so clearly determined by a single component material, such as plastics, the nomenclature classifies the product in the heading associated with that material. In that manner, the Legal and Explanatory Notes make a de facto essential character determination. The Explanatory Notes to heading 3210 recognize the overriding contribution of the plastics component to "powder paints consisting principally of plastics", and so classify them in a plastics-related heading.

On the basis of the Explanatory Notes to heading 3210 and the application of GRI 3(b) to the classification of these goods, we affirm their classification in subheading 3907.99.0050, HTSUSA, dutiable at the rate of 3.1 cents per kilo plus 9 percent ad valorem.

Other Issues

Your letter also raises several ancillary issues which we will attempt to answer in brief here. First, it is not necessary that the goods imported here fall strictly within the definition of "plastics" to be classified in a plastics related heading. By virtue of GRIs 2 and 3, composite goods may be classified under any heading which includes goods made wholly of the component material which provides their essential character. In this case, since the polyester resin provides the essential character, the entire product is considered to be composed of polyester resin for classification purposes. Polyester resin is a product falling within the definition of "plastics" found in the chapter notes.

Contrary to your assertion that "all powder coatings would have to fall under one of the subheadings of 3907", the rationale of our determination here leaves open the possibility that powder coatings could be classified under almost any subheading of the HTSUSA. This is so because classification of these goods is based on essential character, and essential character is determined by the component materials unique to each individual product. While we agree with your assertion that the formulation of each powder coating would have to be known prior to importation, we note that such technical data is required with regard any goods imported into the United States whose classification depends on component materials. See, 19 CFR 141.87, Breakdown on component materials.

Finally, we note your comments regarding the chemical aspects, commercial fungibility and EPA standards for powder paints. One function of the Customs Service is to interpret and administer the Harmonized Tariff Schedule, enacted into law by the Omnibus Trade and Competitiveness Act of 1988, 1204(c), 19 U.S.C.A. 3004(c) (West Supp. 1989). Unfortunately, it is not within the power or authority of the Customs Service to change the scope of a heading or the applicable duty rate. The HTSUSA was enacted by the United States Congress, and that body is charged with making policy decisions with regard to issues and concerns you have raised. Further consideration of your concerns is not properly within the purview of this office.

HOLDING:

New York Ruling Letter 839783 is affirmed. The goods in question, powder coatings consisting of 89.2% polyester resins, are classified in subheading 3907.99.0050, HTSUSA. As such, they are dutiable at the rate of 3.1 cents per kilo plus 9% ad valorem.

Sincerely,

John A. Durant
Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: