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HQ 088894


November 4, 1991

CLA-2 CO:R:C:F 088894 RFC

CATEGORY: CLASSIFICATION

TARIFF NO.: 2905.11.20

Mr. Donald W. Paley
Sharretts, Paley, Carter & Blauvelt
Sixty-Seven Broad Street
New York, NY 10004

RE: Methyl alcohol; methanol

Dear Mr. Paley:

This ruling letter is in response to your request of March 8, 1991, on behalf of Celanese Chemical Company, concerning the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of methanol (methyl alcohol) imported from Canada.

FACTS:

Celanese imports into the United States methanol that is intended for use in producing a synthetic natural gas or for direct use as a fuel. Celanese states that these importations of methanol qualify for special-tariff treatment under the United States-Canada Free-Trade Agreement ("FTA").

ISSUE:

Whether an importer of methanol qualifying for special- tariff treatment under the FTA may enter the methanol under subheading 2905.11.10 rather than under subheading 2905.11.20 and receive the special-tariff treatment provided for under the FTA when the methanol is intended for use in producing a synthetic natural gas or for direct use as a fuel.

LAW AND ANALYSIS:

Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The tariff classification of merchandise under the HTSUSA is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes. See Sections 1204(a) and 1204(c) of the Omnibus Trade and Competitiveness Act of 1988 (19 U.S.C. 1204(a) and 1204(c)).

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule (i.e., (1) merchandise is to be classified under the 4-digit heading that most specifically describes the merchandise; (2) only 4-digit headings are comparable; and (3) merchandise must first satisfy the provisions of a 4-digit heading before consideration is given to classification under a subheading within this 4-digit heading) and any relative section or chapter notes and, provided such headings or notes do not otherwise require, then according to the other GRIs.

GRI 6 prescribes that, for legal purposes, GRIs 1 to 5 shall govern, mutatis mutandis, classification at subheading levels within the same heading. Therefore, merchandise is to be classified at equal subheading levels (i.e., at the same digit level) within the same 4-digit heading under the subheading that most specifically describes or identifies the merchandise.

Heading 2905 provides for acyclic alcohols and their halogenated, sulfonated, nitrated or nitrosated derivatives. Within that heading, subheading 2905.11 provides for methanol (methyl alcohol). In turn, within that six-digit international subheading, there exist two subheadings at the eight-digit national level that provide for importations of methanol. The first subheading is 2905.11.10. It provides for methanol that is "imported only for use in producing synthetic natural gas or for direct use as a fuel." There is a free rate of duty but one must comply with the "actual-use" requirements set forth in Additional U.S. Rule of Interpretation 1(b) to the HTSUSA and Customs Regulations 10.131 through 10.139. The second subheading is 2905.11.20. It provides for methanol other than that described in the terms of subheading 2905.11.10. The general rate of duty for that subheading is 18 percent ad valorem. Pursuant to Presidential Proclamation 6124 (which became effective as of April 1, 1990), imports of methanol qualifying for special-tariff treatment under the FTA and entered under subheading 2905.11.20 do so free of duty.

As indicated above, subheading 2905.11.10 is an "actual-use" provision whereas subheading 2905.11.20 is a residual provision (i.e., the merchandise is not specifically or eo nomine provided for but is nonetheless properly classified under that provision). In order to derive the benefits of an actual-use provision, one must comply with the applicable actual-use requirements. See Additional U.S. Rule of Interpretation 1(b) to the HTSUSA and Customs Regulations 10.131 through 10.139. If one chooses not to undertake the actual-use requirements, then entry of the merchandise should be made under the applicable alternative provision. Therefore, when an actual-use provision is involved, an importer, at its option, may choose to enter its merchandise either (1) under the actual-use provision or (2) under the applicable alternative provision. In regard to the instant case, then, an importer of methanol qualifying for special-tariff treatment under the FTA may enter the methanol under subheading 2905.11.20 (rather than under subheading 2905.11.10) and receive the special-tariff treatment provided for under the FTA when the methanol is intended for use in producing a synthetic natural gas or for direct use as a fuel.

HOLDING:

An importer of methanol qualifying for special-tariff treatment under the FTA may enter the product under subheading 2905.11.20 and receive the special-tariff treatment provided for under the FTA when the methanol is intended for use in producing a synthetic natural gas or for direct use as a fuel.

Sincerely,

John Durant,
Commercial Rulings Division

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