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HQ 955769

May 27, 1994

CLA-2 CO:R:C:M 955769 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7404.00.00

District Director
U.S. Customs Service
127 North Water Street, Room N/A
Ogdensburg, NY 13669

RE: IA 8/94; Spent Copper Anodes; Copper Cathodes; Unrefined Copper; Section XV, Note 6(a); GRI 3(a); 7402.00.00

Dear District Director:

This is in response to your memorandum of January 31, 1994, relating to a request for internal advice initiated by counsel on behalf of Noranda Minerals, Inc., concerning the classification of spent copper anodes under the Harmonized Tariff Schedule of the United States (HTSUS). This determination is necessary to resolve whether Noranda is entitled to benefits it claimed under the U.S.- Canada Free-Trade Agreement. In preparing this ruling, we received several submissions and met with counsel and representatives of Noranda on April 26, 1994.

FACTS:

The merchandise consists of spent copper anodes, imported into Canada from a country other than the U.S. They are referred to as "spent" because, in their existing condition, they cannot be used for further refining because they have been used to a degree which renders them unsuitable for that purpose. In Canada, the spent anodes are remelted and cast into anode molds in a casting furnace, thereby creating new anodes. After this process, the new anodes are suspended by their lugs in a chemical acid bath that also contains thin "starting sheets" of refined copper. An electric current is sent from the anode to the starting sheet through the chemical bath to begin the electrolytic refining process. During this process, copper ions are stripped from the anode and plated onto the starting sheet to form a pure refined copper cathode. After enough pure copper has plated onto the cathode so that it has reached the desired thickness and weight, the cathode is removed and replaced with another starting sheet. Once this second cathode reaches the desired weight, both it and the anode are replaced and a new cycle begun. The finished copper cathodes are then imported into the U.S.

The subheadings under consideration are as follows:

7402.00.00: [u]nrefined copper; copper anodes for electrolytic refining.

The general, column one rate of duty for goods classifiable under this provision is 1 percent on the value of the copper content.

7404.00.00: [c]opper waste and scrap.

Goods classifiable under this provision receive duty-free treatment.

ISSUE:

Whether spent copper cathodes are classifiable under subheading 7402.00.00, HTSUS, as unrefined copper, or under subheading 7404.00.00, HTSUS, as copper waste and scrap.

LAW AND ANALYSIS:

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.

Section XV, note 6(a), HTSUS, states that:

[i]n this section, the following expressions have the meanings hereby assigned to them:

(a) Waste and scrap

Metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive, are to be used to determine the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). In part, Explanatory Note 74.04 (p. 1044) states that:

[t]he provisions concerning waste and scrap in the Explanatory Note to heading 72.04 apply, mutatis mutandis, to this heading . . .

In part, Explanatory Note 72.04 (p. 987) states that:

[w]aste and scrap is generally used for the recovery of metal by remelting or for the manufacture of chemicals.

It is our position that the spent copper anodes are waste and scrap as defined above. They are metal goods which are no longer effectively and commercially usable as anodes because of wear (i.e., most of the copper ions have been removed). Accordingly, they are remelted for the recovery of metal and recast before they can be reused as new anodes. Because the spent copper anodes meet the provisions of section XV, note 6(a), HTSUS, we find that they are classifiable under subheading 7404.00.00, HTSUS. As they are waste and scrap, they cannot be described as the anodes classifiable under subheading 7402.00.00, HTSUS. We note that, although not legally dispositive, in a letter to Noranda Sales Corporation Ltd., Revenue Canada (Canadian Customs) agreed with this position.

Counsel claims that because the spent copper anodes are described under subheading 7402.00.00, HTSUS, as unrefined copper, and under subheading 7404.00.00, HTSUS, as copper waste and scrap, GRI 3(a) must be consulted. It states that:

[w]hen, by application of 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to a part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

We disagree with counsel's assessment. In counsel's original submission, it is stated that "[t]he copper industry has a longstanding, clear and uniform view of spent anode as a form of anode . . . " Therefore, if we were to classify the spent anodes under subheading 7402.00.00, HTSUS, it would have to be as copper anodes, and not as unrefined copper, because counsel states the copper industry regards spent anodes as a form of copper anode. Consequently, for classification purposes, because the spent anodes cannot be classifiable as unrefined copper and are not described as copper anodes, GRI 3(a) is inapplicable because subheading 7404.00.00, HTSUS, is the only provision describing the merchandise.

Therefore, by authority of GRI 1, the spent copper anodes are classifiable under subheading 7404.00.00, HTSUS.

HOLDING:

The spent copper anodes are classifiable under subheading 7404.00.00, HTSUS, as copper waste and scrap.

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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