United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2001 NY Rulings > NY H82398 - NY H82464 > NY H82437

Previous Ruling Next Ruling
NY H82437




July 5, 2001

CLA-2-72:RR:NC:1:117 H82437

CATEGORY: CLASSIFICATION

TARIFF NO.: 7207.12.00; 7207.20.00

Mr. James Wilson
California Steel Industries, Inc.
14000 San Bernardino Avenue
P.O. Box 5080
Fontana, California 92335

RE: The tariff classification of steel slab and country of origin of flat-rolled steel produced from slab from various countries, including Australia, Brazil and Mexico.

Dear Mr. Wilson:

In your letter dated May 23, 2001, you requested a tariff classification ruling. You also ask whether the imported product undergoes a substantial transformation as a result of processing operations performed in the United States.

The products to be imported are nonalloy steel semifinished slabs containing 0.25 percent or less of carbon. The slabs are rectangular in cross section and range from 7 to 10 inches in thickness, 30 to 72 inches in width and 13 to over 37 feet in length. The slabs are intended to be re-heated and rolled into flat-rolled steel.

The applicable subheading for the nonalloy steel slabs containing less than 0.25 percent of carbon will be 7207.12.00, Harmonized Tariff Schedule of the United States (HTS), which provides for semifinished products of iron or nonalloy steel, containing by weight less than 0.25 percent of carbon, other, of rectangular (other than square) cross section. The general rate of duty will be 1.3 percent ad valorem.

The applicable subheading for the nonalloy steel slabs containing 0.25 percent of carbon will be 7207.20.00, HTS, which provides for semifinished products of iron or nonalloy steel, containing by weight 0.25 percent or more of carbon. The general rate of duty will be 1.3 percent ad valorem.

You ask whether the imported semifinished steel slabs, after undergoing various processing operations in the United States, are substantially transformed. After importation, the steel slabs are heated in an air-atmosphere, temperature controlled furnace up to about 2250 degrees F. The slabs are then control-rolled in successive passes through roughing mills to achieve an intermediate thickness of about 1.25 inches, after which each slab is trimmed back 8 to 10 inches on the head. They are then finish-rolled at about 1600 degrees F to final gauges ranging from 0.054 to 0.625 inch in thickness. The length of the slab is drastically increased. The flat-rolled steel product is control cooled and coiled. The hot-rolled flat-rolled steel may also undergo additional processing such as pickling and oiling, an operation in which the steel is put through an acid bath to remove the surface scale and then given a protective oil film. The steel may also be cold-rolled, rolled to even thinner gauges in a cold state. The steel may be rolled to gauges less than 0.009 inch thick. The cold-rolled product may be annealed/heat-treated and galvanized, coated with zinc in a continuous hot-dip galvanize line. Semifinished steel slabs have no viable commercial use. The flat-rolled steel products produced from slabs, hot-rolled, pickled and oiled, cold-rolled and galvanized flat-rolled steel, have many uses ranging from structures, pipelines, automotive applications and industrial and agricultural construction to tubing, furniture and appliances. The value added to the slabs by the processing ranges from 25 to over 200 percent.

You express the opinion that the processing performed in the United States substantially transforms the imported steel slab into a new and different article, one having a new name, character and use. Semifinished steel slabs, having no commercial application, are transformed into finished products known as plate, sheet, or strip that are hot-rolled, cold-rolled, pickled and oiled or galvanized.

A substantial transformation occurs when, as a result of manufacturing processes, a new and different article emerges, having a distinctive name, character or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process.

This issue concerning country of origin of slab that has undergone certain processing operations has been previously addressed. Headquarters’ rulings 079628 dated August 25, 1987 and 081659 dated March 3, 1989 concerned the country of origin of steel slabs that were produced in one country and hot-rolled in a second country to produce hot-rolled plates, sheets and coils. It was held in both these rulings that the hot-rolling process constitutes a substantial manufacturing operation which alters the identity of the slab to such an extent that a substantial transformation occurs. The product known as slab, having no commercial uses, is transformed into a finished steel product with a variety of commercial applications. Therefore, when slab from one country is transformed into hot-rolled, cold-rolled, pickled and oiled and/or galvanized coils, plate or sheet in a different country, the steel will be considered a product of the country in which the hot-rolling and any additional processing subsequent to the hot-rolling takes place.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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 212-637-7016.

Sincerely,

Robert B. Swierupski
Director,

Previous Ruling Next Ruling

See also: