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HQ 562122

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November 26, 2001

MAR-05: RR:CR:SM 562122 BLS

CATEGORY: MARKING

Mr. Michael W. Savage
Metals Aerospace International
1330 Colorado Avenue
Santa Monica, CA 90404-3313

RE: Country of origin marking of aerospace metals

Dear Mr. Savage:

This is in reference to your letters dated April 30 and September 10, 2001, concerning the country of origin requirements for certain aerospace metals purchased abroad.

FACTS:

Metals Aerospace International imports two different forms of titanium alloy metals for the purpose of conversion to finished mill products as follows:

1) Ingots

The ingot (a casting suitable for working or re-melting) is the starting point for all conversion procedures and will range in size from 28” diameter 8,500 lbs. to 36” diameter 18,000 lbs. depending on the alloy. The procedure to be used will depend upon the customer’s end requirements. For example, if Metals Aerospace were going to fill a 2” Titanium 6A1-4V-plate requirement, the operations in the U.S. would be as follows:

Heat 36” diameter 6A1-4V ingot to 2100F Forge ingot to 12” thick x 48” wide x 191” long Cut slab in half
Re-heat both slabs to 1750F
Forge each slab to 8” thick x 48” wide x 122” long Cut each slab in half
Re-heat to 1750F
Roll 4 slabs to 2” thick x 48” wide x 248” long Cut and anneal plates to specification requirements Test the physical requirements of the plate Ultrasonic inspect for internal defects

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Plate of other sizes will utilize a slightly different procedure depending on the finished physical dimensions of the final product. Plates can range from 0.1875 to 6” in thickness.

2) Billets

Billets (and slabs) are considered semi-finished products. Billets can range from 4” square x Random Length to 24” square x Random Length. Ingots are the starting point for making billets. A typical procedure to make a 14” billet abroad is as follows:

Heat 36” diameter 6A1-4V ingot to 2100F Forge to 24” octagon, cut if necessary
Re-heat to 1950F
Forge to 18” octagon
Re-heat to 1750F
Forge to 14” square

You state that the billet is an intermediate form that is the input to make the finished product. For example, the operations required (in the U.S.) for 4” thick x 8” wide x 144 long rectangle bar from the imported billet is as follows:

Heat 14” billet to 1950F
Forge to 9” thick x 11.75” long x yield Re-heat to 1750F
Forge to 4” thick x 8” wide x yield length Test and ultrasonic inspect

Finished bars of differing dimensions will require variations of this procedure.

ISSUE:

What are the country of origin marking requirements for the imported metal products?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of

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the article (or container) will permit, in such manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. §1304.

Section 134.1(b), Customs Regulations (19 CFR §134.1(b)), defines "country of origin" as the country of manufacture, production or growth of any article of foreign origin entering the U.S. 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 the marking laws and regulations. However, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

Section 134.35(a), Customs Regulations (19 CFR §134.35(a)), provides generally that articles other than goods of a NAFTA country used in the U.S. in manufacture which results in an article having a name, character, or use differing from that of the imported article will be within the principle of the decision in the case of U.S. v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940). Under this principle, the article will undergo a substantial transformation as a result of the processing in the U.S. and the U.S. manufacturer or processor who converts or combines the imported article will be considered the “ultimate purchaser.” The article shall be excepted from the marking requirements and only the outermost containers of the imported article is required to be marked.

In Headquarters Ruling Letter (HRL) 081659 dated March 3, 1989, we held that a substantial transformation occurred when steel slabs were hot rolled into steel plate. In that case, we noted that the slabs were semi-finished products which were processed into a finished steel product known as plate or sheet which had a variety of commercial applications. We found that the processing operations resulted in a significant change in the shape and dimensions of the product, and that the identity of the slab had been fundamentally changed to a product which no longer had the essence of the slab. See also HRL 555103 dated February 2, 1989 (hot rolling of billets into bar stock and wire rod in coil substantially transforms the metal into products of the country where the processing occurs).

In these cases as well as in the instant situation, the processing in the U.S. narrows the uses of the ingots and billets from articles with general application to plate and bar of a specified dimension, in accord with the customer’s specifications of its end products. In accord with the principles set forth in HRLs 081659 and 555103, we find that the processing in the U.S. will result in a substantial transformation of the imported ingots and billets. Therefore, the ultimate purchaser of the imported materials will be Metals Aerospace International, and the resultant plate and bar in the sample scenario 4
are excepted from the marking requirements only the outermost containers of the imported articles are required to be marked. See 19 CFR 134.35(a).

HOLDING:

Based on the information submitted, the processing in the U.S. of titanium alloy ingots and billets to plate and bar in the manner described results in a substantial transformation. Therefore, the ultimate purchaser of the imported materials will be the U.S. processor and only the outermost containers of the imported articles are required to be marked. As you advise that the imported articles and the finished products may vary, sometimes dramatically, this determination applies only to the examples you have described in your ruling request. Substantive changes to these scenarios must be the subject of separate requests.

A copy of this ruling should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director

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