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HQ 954256




SEPTEMBER 29, 1994

CLA-2:CO:R:C:M 954256 JAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 7306.30.10, 7306.30.50

Mr. Ralph H. Sheppard, Esq.
Adduci, Mastriani, Schaumberg & Schill
330 Madison Avenue
New York, NY 10017

RE: Galvanized API-5L Line Pipe; Welded Tubes and Pipes of Nonalloy Steel; Subheading 7306.10.10, Line Pipe of a Kind Used for Oil or Gas Pipelines; Principal Use, Additional U.S. Rule 1(a), HTSUS, HQ 954370; Slip Op. 93-46, NY 877544 Modified

Dear Mr. Sheppard:

In a letter to the Area Director of Customs, New York Seaport, dated August 18, 1992, on behalf of Western American Mfg., Inc., you inquired as to the tariff classification of certain imported pipe meeting American Petroleum Institute (API) Specification 5L for line pipe.

In NY 877544, dated September 11, 1992, the Area Director replied to your request and confirmed that welded nonalloy steel line pipe was classifiable in subheading 7306.10.10, HTSUS. This letter represents a modification of the position expressed in NY 877544.

FACTS:

As described in your August 18, 1992, ruling request, the pipe in issue is welded, nonalloy steel pipe in various lengths, typically 21 feet, having outside diameters ranging from 0.5 inch to 4 inches. The inquiry covered both zinc coated or galvanized pipe and uncoated or "black" pipe. Both types were said to be certified by the manufacturers as pipe satisfying the API-5L technical specification regarding pressure and burst limitations. Galvanizing of this pipe is said to be for purposes of corrosion resistance.

You stated that pipe conforming to the API-5L specification is intended to accommodate the high pressures and adverse chemical environments associated with movement by pipe of - 2 -
volatile petrochemical products. As such, you proposed that both types be classified under the provision for tubes, pipes and hollow profiles of iron or steel, line pipe of a kind used for oil or gas pipelines, in subheading 7306.10.10, Harmonized Tariff Schedule of the United States (HTSUS).

The provisions under consideration are as follows:

7306 Other tubes, pipes and hollow profiles (for example, open seamed or welded, riveted or similarly closed), of iron or steel:

7306.10 Line pipe of a kind used for oil or gas pipelines:

7306.10.10 Of iron or nonalloy steel...1.9 percent

7306.30 Other, welded, of circular cross section, of iron or nonalloy steel:

7306.30.10 Having a wall thickness of less than 1.65 mm ...8 percent

Having a wall thickness of 1.65 mm or more:

7306.30.50 Other...1.9 percent

ISSUE:

Whether nonalloy steel pipe that has been galvanized belongs to a class or kind of pipe that is principally used for oil or gas pipelines.

LAW AND ANALYSIS:

Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

Additional U.S. Rule of Interpretation 1(a), HTSUS, states that in the absence of special language or context which otherwise requires, a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to,
date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.

The language in subheading 7306.10 "of a kind used for" explicitly invokes use as a criteria for classification and in such cases principal use is controlling. Group Italglass U.S.A., Inc. v. United States, Slip Op. 93-46, decided March 29, 1993. For tariff purposes, principal use is that use which exceeds any other single use of the goods. HQ 954370, dated September 1, 1993.

Technical information available to us indicates that for both environmental and safety reasons it is not common practice to galvanize pipe used in oil or gas pipelines. Metallurgically, there are elements in the soil that tend to attack zinc and would therefore compromise its anti-corrosive qualities. Similarly, petroleum products are high in sulfur which attacks zinc, thus contaminating the petroleum and corroding the inside of the pipe. Mechanically, most oil and gas line pipe is welded end-to-end and galvanized pipe cannot be effectively welded, as the presence of zinc weakens the weld and may cause the weld point to rust. Likewise, for safety reasons it is not common practice to coat line pipe with zinc as zinc conducts electricity and would therefore attract stray underground electrical charges. In addition, heat generated by the welding process tends to vaporize the zinc which may prove hazardous to the welder.

For these and other reasons, we are of the opinion that the galvanized AP1-5L steel line pipe in issue does not belong to that class or kind of pipe principally used for oil or gas pipelines.

HOLDING:

Under the authority of GRI 1, galvanized welded nonalloy steel pipe conforming to API Specification 5L is provided for in heading 7306. However, it has not been shown to belong to a class or kind of pipe principally used for oil or gas pipelines. The pipe is classifiable in subheading 7306.30.10 or in subheading 7306.30.50, HTSUS, as appropriate, depending on wall thickness.

NY 877544, dated September 11, 1992, is modified with respect to the galvanized welded nonalloy steel pipe.

In accordance with section 625, this ruling will become effective 60 days after its publication in the CUSTOMS BULLETIN. - 4 -

Publication of rulings or decisions does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).

Sincerely,

John Durant, Director
Commercial Rulings Division


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