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NY C83026




February 2, 1998

CLA-2-73:RR:NC:1:117 C83026

CATEGORY: CLASSIFICATION

TARIFF NO.: 7304.39.00; 7306.30.10; 7306.30.50; 7307.99.50

Mr. David R. Amerine
Manatt, Phelps & Phillips
1501 M Street N.W., Suite 700
Washington, D.C. 20005-1702

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of steel pipe nipples from Mexico; Article 509

Dear Mr. Amerine:

In your letter dated January 5, 1998 on behalf of Niples Del Norte, you requested a ruling on the status of steel pipe nipples from Mexico under the NAFTA.

Steel pipe manufactured in the United States will be exported to Mexico where it will be cut to various lengths, threaded on one or both ends and then imported back into the United States.

The U.S. manufactured pipe may be of either welded or seamless construction. The outside diameters will range from 1/4 inch to 6 inches and the wall thicknesses will range from 1/32 inch (0.794 mm) to 1/4 inch (6.35 mm). The seamless pipe is classifiable under HTSUS subheading 7304.39.00. The welded pipe is classifiable under HTSUS subheadings 7306.30.10/50.

The U.S. manufactured pipe is cut to various lengths in Mexico and threaded on one or both ends. The threaded pipes, known as long steel pipe nipples, will range from 12 inches to several feet in length. These long steel pipe nipples are imported back into the United States.

The seamless long steel pipe nipples measuring over 12 inches in length which are imported back into the United States are classifiable under HTSUS subheading 7304.39.00. The welded long steel pipe nipples measuring over 12 inches in length which are imported back into the United States are classifiable under HTSUS subheadings 7306.30.10/50. The seamless and welded long steel pipe nipples measuring exactly 12 inches in length which are imported back into the United States are classifiable under HTSUS subheading 7307.99.50.

Section 102.11, Customs Regulations, sets forth the required hierarchy for determining whether a good is a good of a NAFTA country for marking purposes. This section states that the country of origin of a good is the country in which (1) the good is wholly obtained or produced; (2) the good is produced exclusively from domestic materials; or (3) each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in section 102.20 and satisfies any other applicable requirements of that section. In this case the change in tariff classification must be made in accordance with section 102.20(n), Section XV: Chapters 72 through 83, heading 7301-7307 which requires "A change to heading 7301 through 7307 from any other heading, including another heading within that group."

The long steel pipe nipples which measure over 12 inches in length which are initially classified under headings 7304 and 7306 remain classified under these headings subsequent to the processing performed in Mexico. There is no tariff classification change within the requirements of section 102.20.

Section 102.11(b) states that where the country of origin cannot be determined under paragraph (a), the country of origin of the good: (1) is the country of origin of the single material that imparts the essential character of the good. Noting section 102.18(b), it is the steel pipe of U.S. origin which imparts the essential character of the finished long steel pipe nipples. For country of origin marking purposes, the country of origin of the long steel pipe nipples which measure over 12 inches in length is the United States. Because the marking requirements of 19 U.S.C. 1304 apply only to articles of "foreign origin", these long steel pipe nipples need not be marked upon entry into the United States.

The long steel pipe nipples which measure exactly 12 inches in length which are initially classified under headings 7304 and 7306 are classified under heading 7307 subsequent to the processing performed in Mexico. There is a tariff classification shift within the requirements of section 102.20 so the country of origin would be Mexico in accordance with section 102.11(a)(3).

19 U.S.C. 1304(c)(1) requires that all iron and steel pipe, tube and pipe fittings be marked to indicate the proper country of origin by one of five methods, die stamping, cast-in-mold lettering, etching, engraving or continuous paint stenciling.

Article 401 of the NAFTA is incorporated into General Note 12, HTSUS. General Note 12(a)(i) and (ii) provides in part that goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of either Canada or Mexico under the terms of the marking rules, when such goods are imported into the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" or "MX" in parentheses, are eligible for such duty rate.

The seamless and welded long steel pipe nipples which measure exactly 12 inches in length and which are classifiable under HTSUS subheading 7307.99.50 will be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

With regard to the seamless and welded long steel pipe nipples which measure over 12 inches in length, application of the marking rules of section 102.11, Customs Regulations, did not yield an origin determination of either Canada or Mexico, but of the United States. However, the NAFTA preference override set forth in section 102.19(b), Customs Regulations, states that if, under any provision of this part, the country of origin of a good which is originating...is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition. The seamless long steel pipe nipples which measure over 12 inches in length and which are classifiable under HTSUS subheading 7304.39.00 will be entitled to a 4 percent rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

The welded long steel pipe nipples which measure over 12 inches in length and which are classifiable under HTSUS subheading 7306.30.10 will be entitled to a 4 percent rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

The welded long steel pipe nipples which measure over 12 inches in length and which are classifiable under HTSUS subheading 7306.30.50 will be entitled to a 0.9 percent rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Paula Ilardi at 212-466-5476.

Sincerely,

Robert B. Swierupski
Director,

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