HQ 224702 - Ruling request on the fungibility of different sizes of wire rope; same condition substitution drawback; 19 U.S.C. 1313(j)(2); 19 CFR 191.2. - United States International Trade Commision Rulings

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HQ 224702

December 17, 1993

DRA-4 CO:R:C:E 224702 TLS

CATEGORY: ENTRY

Mr. Herbert E. Harris II
Harris & Ellsworth
2600 Virginia Avenue, N.W. Suite 1113
Washington, D.C. 20037-1905

RE: Ruling request on the fungibility of different sizes of wire rope; same condition substitution drawback; 19 U.S.C. 1313(j)(2); 19 CFR 191.2.

Dear Mr. Harris:

This office has received the above-referenced request for a ruling as provided for under Customs regulations. We have considered the request and made the following decision.

FACTS:

Your client manufactures wire rope in different sizes. The wire rope is manufactured using carbon steel wire woven into strands which are then wound around a core wire. The same type of steel and grade of steel are used in every instance for a particular type of wire rope. The core may consist of steel or fibers. The steel cores may be either a single strand or an independent wire rope (IWRC).

The wire rope comes in different sizes, according to how many wires are used to produce a strand and how many strands are wound around a core. Strands are produced using either a tubular strander or planetary strander. The strands are wound around the core in a similar fashion, respectively. The completed wire ropes are distinguishable by diameter, the number and construction of strands, the grade and type of steel, and the kind of core.

You have described the four classifications of wire rope at issue here in the following fashion:

Nominal
Classification

6X7

6X19

6X37

8X19

Description

Contains 6 strands, each of which is made up of from 3 to
14 wires, of which no more than 9 are outside wires.

Contains 6 strands, each of which is made up of from 15 through 26 wires, which no more than 12 are outside wires.

Contains 6 strands, each of which is made up of from 27 through 49 wires, of which no more than 18 are outside wires.

Contains 8 strands, each of which is made up of from 15 through 26 wires, of which no more than 12 are outside wires.
In the commercial setting, wire ropes are identified by the following nomenclature:

An example: 3/4" 6x19 FW IPS IWRC. This describes a wire rope that is 3/4 inches in diameter, with six strands of 19 wires per strand of filler wire construction. The grade of steel is improved plow steel (IPS). The strands are closed around an independent wire rope core (IWRC). The "6x19" designation may encompass different constructions of wire rope; for instance, 6x21 and 6x26 may also be found under the 6x19 designation. Regardless of the number of wires per strand, each wire rope under a particular designation have the same nominal strength and weight per foot, and are sold at the same price. See American Iron and Steel Institute, Wire Rope Users Manual 2d ed. (1981).

This request is being made for a determination of fungibility on the four different nominal classifications as described above (also termed as "designations" herein) for the purposes of substitution same condition drawback.

ISSUE:

Whether improved wire rope of the same nominal classification, or designation, is fungible with its domestic counterpart.

LAW AND ANALYSIS:

The importer seeks to have the importations of wire rope ruled eligible for substitution same-condition drawback under 19 U.S.C. 1313(j)(2), which provides that:

If there is, with respect to imported merchandise on which was paid any duty, tax, or fee imposed under Federal law because of its importation, any other merchandise (whether imported or domestic) that-

(A) Is fungible with such imported merchandise;

(B) Is, before the close of three-year period beginning on the date of importation of the imported merchandise, either exported or destroyed under Customs supervision;

(C) Before such exportation or destruction-

(i) Is not used within the United States, and

(ii) Is in the possession of the party claiming drawback under this paragraph; and

(D) Is in the same condition at the time of exportation or destruction as was the imported merchandise at the time of its importation;
then upon the exportation or destruction of such other merchandise the amount of each such, duty, tax, and fee paid regarding the imported merchandise shall be refunded as drawback, but in no case may the total drawback on the imported merchandise, whether available under this paragraph or any other provision of law or any combination thereof, exceed 99% of that duty, tax, or fee. (Emphasis added.)

Under 19 CFR 191.2(k)(1), "fungible merchandise" is defined as "merchandise which for commercial purposes is identical and interchangeable in all situations." See also Guess? Inc. v. United States, 752 F. Supp. 463, 14 CIT 770 (1990). Whether merchandise is identical and interchangeable in all situations hinges upon how merchants, consumers, wholesalers, etc., respond to a certain item vis-a-vis another in the marketplace. See Guess? Inc., supra, and cases cited therein. You have noted that the industry standards allow for varying numbers of wires per strand within a particular designation and that such would not preclude the wire rope from being bought and sold at the same price. The nominal strength, weight per foot, and price of wire rope is said to be the same within the particular nominal classification even if the number of wires per strand vary. See Wire Rope Users Manual, supra. We recognize here, as we have done in previous rulings, that industry standards are useful as guidelines for determining fungibility. See, e.g., Customs ruling HQ 219181 (June 6, 1989).

Documentation has been submitted that shows customer preference to be for a particular nominal classification of wire rope and nothing beyond that. These documents consist of several copies of purchase orders for wire rope of different dimensions. The purchase orders note the nominal classification for each size of wire rope ordered and the price for each. In each case, the wire rope is specified only to the extent of its nominal classification and model number; no further specificity is noted. This is true even though, as noted above, the number of wires per strand within a particular nominal classification may differ from rope to rope.

In this instance, Exhibit 6 shows an order of 6x19 wire rope with a 7/8" diameter with 25 wires per strand. Exhibit 7 shows an order of wire rope with the same dimensions but with 26 wires per strand. The price for each is recorded as $1.48 (our office has been informed through telephone conversation between you and Tony Shurn of this office that the price is for a "per foot" measurement).

We also note that your various submissions to us indicate that there may be wire ropes within a particular classification that may be further distinguished by what type of core is used (steel or fiber), the type of "lay" it has (right regular lay [RRL], left regular lay [LRL], right lang lay [RLL], or left lang lay [LLL]), the type of steel used (plow or otherwise), how the steel is processed (uncoated or galvanized), and diameter of the rope. Fiber cores are more flexible than steel cores. Regular lays are stated to be more stable and resistant to crushing while lang lays are more fatigue and abrasion resistant. Whether a rope is a right or left lay is of no consequence. Galvanized steel is more corrosion resistant. It has been noted that the vast majority of wire ropes manufactured are of standard construction; this ruling will apply only to such wire rope and not to non-standard constructions.

Based on this evidence, we find that your claim of fungibility of wire rope of different numbers of wires per strand within a nominal classification to be valid. We find that wire ropes of standard construction within a particular nominal classification with the same lay (regular or lang), same type of core, and same type of steel are fungible.

HOLDING:

The wire rope at issue here is fungible on a nominal classification basis when they are of standard construction, have the same lay (regular or lang, regardless of whether left or right), same type of core, same type of steel (plow or otherwise), the steel is processed the same (galvanized or non-galvanized), and the diameter of the rope is the same. This is true even of ropes within a classification that differ in the number of wires per strand. This ruling is based upon the evidence provided under cover letters of November 17 and 24, 1993, and December 2, 1993.

Sincerely,

John Durant, Director

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