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HQ 950874

January 10, 1992

CLA-2 CO:R:C:M 950874 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7210.11.00; 7210.12.00

Mr. Alexander G. Arroyos
President
The Dynamic Group
P.O. Box 53538
1201 Hahlo Street
Houston, TX 77052

RE: Substantial Transformation; Country of Origin; Steel Tin Plate; Continuous Electro-Tinning Process; Ferrostaal Metals Corp. v. United States

Dear Mr. Arroyos:

This is in response to your letter of December 12, 1991, concerning the classification and country of origin of steel tin plate under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The subject merchandise consists of steel tin plate. The stock from which the steel tin plate is manufactured is purchased from Japan as black plate coil. In Taiwan, the black plate is coated with tin and then exported to the United States. The coating of the black plate coil with tin is referred to as the "continuous electro-tinning process", also known as "electroplating". The Making, Shaping and Treating of Steel, 10th Edition describes electroplating as "an old art, practiced not only to protect the base metal from corrosion but also for decorative purposes and, more recently, to protect the base metal from wear by friction or abrasion. Metals used for coatings include . . . tin . . ." You have noted that during this process, there is no change in the chemical composition of the base black plate.

ISSUE:

What is the proper classification and country of origin of the subject steel tin plate under the HTSUS?

LAW AND ANALYSIS:

COUNTRY OF ORIGIN

"Country of origin" is defined in 19 CFR 134.1(b) as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part."

"The essence . . . is that a product cannot be said to originate in the country of exportation if it is not manufactured there. The question, therefore, is whether operations performed on products in the country of exportation are of such a substantial nature to justify the conclusion that the resulting product is a manufacture of that country. 'Manufacture' implies a change, but every change is not manufacture . . . There must be transformation; a new and different article must emerge, 'having a distinctive name, character or use'." Ferrostaal Metals Corp. v. United States, 11 CIT 470, 473 (1987).

Ferrostaal Metals Corp. dealt with steel sheet which had been annealed and galvanized in New Zealand by a process known as "continuous hot-dip galvanizing" using full hard cold-rolled steel sheet from Japan. This galvanizing process created a mixed zinc-steel surface with an identifiable atomic pattern. This process is distinguishable from the "continuous electro-tinning process" which, as noted, does not change the chemical composition of the baseplate. The Court ruled that both the annealing and the "continuous hot-dip galvanizing" process constituted a substantial transformation of the merchandise.

The Court in Ferrostaal Metals Corp., states that it "does not agree with the argument that zinc coating is insignificant because a substantial transformation cannot occur in steel sheet once it is shaped. The alloy-bonded zinc coating affects the character of the sheet by changing its chemical composition and by providing corrosion resistance." (emphasis supplied). The Court, in using the conjunctive, seems to at least require a change in chemical composition before a substantial transformation can occur in cases involving a coating or plating process.

The "continuous electro-tinning process" does not change the chemical composition of the baseplate. Its main use is for the prevention of corrosion. A new and different article having a distinctive name, character, or use does not emerge.

Therefore, following the reasoning in Ferrostaal Metals Corp., it is our position that a substantial transformation has not occurred, and the country of origin of the steel tin plate is Japan.

CLASSIFICATION

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

The steel tin plate is specifically described in subheadings 7210.11.00 and 7210.12.00, HTSUS. Pursuant to GRI 1, it will be classifiable under one of these provisions depending on thickness.

HOLDING:

The country of origin of the steel tin plate is Japan.

The merchandise is classifiable under subheadings 7210.11.00 and 7210.12.00, HTSUS, which provide for: "[f]lat-rolled products of iron or nonalloy steel, of a width of 600mm or more, clad, plated or coated: [p]lated or coated with tin:

7210.11.00- [o]f a thickness of 0.5mm or more;

7210.12.00- [o]f a thickness of less than 0.5mm."

The general, column one rate of duty is 3.5 percent ad valorem in both provisions.

Sincerely,

John Durant, Director
Commercial Rulings Division

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