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HQ 968077




February 14, 2006

CLA-2 RR:CTF:TCM 968077 KSH

Category: CLASSIFICATION

Mr. Bryan Lathbury
Kuehne & Nagel
10 Exchange Place
Jersey City, NJ 07302

RE: Eligibility for preferential treatment of Ammonium Paratungstate under subheading 9802.00.50 or 9802.00.60

Dear Mr. Lathbury:

This letter is in response to your request of December 5, 2005, on behalf of your client, Alldyne Powder Technologies, in which you requested a binding ruling pertaining to the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of Ammonium Paratungstate (APT). Specifically, your request concerns the eligibility for preferential tariff treatment of the APT under subheadings 9802.00.50 or 9802.00.60, HTSUSA. Your request has been forwarded to this office for response by the National Commodity Specialist Division in New York. Samples have been forwarded with your request.

FACTS:

The merchandise at issue consists of ferbertite ore, also commercially known as tungsten ore concentrate. The tungsten ore was purchased from the U.S. Defense Logistics Agency where it had been stored since the middle 1950s as part of the National Defense Stockpile. The tungsten ore concentrate will be exported to China to be converted into APT. The refining process in China is an intermediary process to reduce the tungsten ore concentrate to pure tungsten metal powder. You outline the refining process that takes place in China as follows:

Ball-milling: tungsten ore concentrate is ground into ore slurry with an additive; Decomposition: the slurry is decomposed into soluable sodium tungstate. The insoluable materials and impurities are removed by filtering; Ion Exchange: negative ions of sodium tungstate are absorbed onto resin. Tungsten oxide in sodium tungstate is separated from other impurities and sodium tungstate is converted to an ammonium tungstate solution; Evaporation and crystallization: the ammonium tungstate solution is evaporated to produce ammonium tungstate crystals; Separation, drying and packing: after separation of solids from liquids, the ammonium paratungstate is dried and packaged for export to the United States.

Upon completion of the refining process, the APT will be reimported into the United States to be converted to tungsten oxide and then to pure tungsten metal powder.

ISSUE:

Whether the APT is eligible for preferential treatment under subheading 9802.00.50, HTSUSA, or in the alternative, subheading 9802.00.60, HTSAUS.

LAW and ANALYSIS:

Subheading 9802.00.50, HTSUS, provides a full or partial duty exemption for articles that are returned after having been exported to be advanced in value or improved in condition by means of repairs or alterations, provided that the documentary requirements of 19 CFR 10.8 are met.

In circumstances where the operations abroad destroy the identity of the exported article or create a new or commercially different article, entitlement to subheading 9802.00.50, HTSUS, is precluded. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff’d C.D. 1752, 36 Cust. Ct. 46 (1956); and Guardian Industries Corporation v. United States, 3 CIT 9 (1982). Moreover, entitlement to this tariff treatment is not available where the exported articles are incomplete for their intended purpose prior to the foreign processing and the foreign processing is a necessary step in the preparation or manufacture of the finished articles. Dolliff & Company, Inc. v. United States, 455 F. Supp. 618 (Cust. Ct. 1978), aff’d, 599 F.2d 1015 (CCPA 1979).

You contend that the APT is complete at the time of export in terms of chemical composition and remains complete throughout the manufacturing process in China. You argue that the refining process modifies the tungsten ore to APT but does not create a new or commercially different article.

Tungsten ores are classified in subheading 2611.00.6000, HTSUSA, which provides for tungsten ores and concentrates: concentrates. In contrast, APT is classified in 2841.80.0010, HTSUSA, which provides for salts of oxometallic or peroxometallic acids: tungstates (wolframates), of ammonium. The processing which occurs in China changes the product from an ore of Chapter 26, HTSUSA, to a synthetic chemical of Chapter 28, HTSUSA. The molecular change of the APT from an ore to a chemical creates a new or commercially different article of commerce which precludes classification in 9802.00.50, HTSUSA. Moreover, the processing in China is an intermediary step necessary to manufacture the finished tungsten powder. As such entitlement to tariff treatment under 9802.00.50, HTSUS, is not available.

Alternatively, you argue that sufficient precedent exists to qualify the APT for a partial duty exemption under 9802.00.60, HTSUS. Subheading 9802.00.60, HTSUS, provides a partial duty exemption for certain metal articles that are manufactured or subjected to a process of manufacture in the United States, exported for further processing, and returned for further processing in the United States. Under subheading 9802.00.60, HTSUS, duty is assessed only on the cost or value of the foreign processing, provided that the documentary requirements of 19 CFR 10.9 are satisfied.

Pursuant to U.S. Note 3(e) of Subchapter II, Chapter 98, HTSUSA, for purposes of subheading 9802.00.60, the term “metal” covers (1) the base metals enumerated in Note 3 to section XV, HTSUS; (2) arsenic, barium, boron, calcium, mercury, selenium, silicon, strontium, tellurium, thorium, uranium and the rare-earth elements; and (3) alloys of any of the foregoing. Base metals are further enumerated in additional U.S. note 3, section XV, HTSUSA, which provides that:

[f]or the purposes of the tariff schedule, the term "base metals" embraces aluminum, antimony, beryllium, bismuth, cadmium, chromium, cobalt, copper, gallium, germanium, hafnium, indium, iron and steel, lead, magnesium, manganese, molybdenum, nickel, niobium (columbium), rhenium, tantalum, thallium, tin, titanium, tungsten, vanadium, zinc and zirconium.

CBP has previously considered whether certain materials should be considered metals for purposes of subheading 9802.00.60, HTSUS. In Headquarters Ruling Letter (“HRL”) 067757, dated June 25, 1982, dry alumina extrudate (an oxide) was exported. We determined that this chemical oxide form is not an article of metal within the meaning of item 806.30, TSUS (now denominated as HTSUS subheading 9802.00.60). In HRL 067419, dated November 4, 1981, oxide materials containing molybdenum were deemed chemical compounds of metal and not articles of metal, thereby rendering the materials ineligible for preferential treatment under 806.30, TSUS. In HRL 055336, dated November 7, 1978, CBP held that a rare earth fluorocarbonate was not a metal article for purposes of TSUS item 806.30 and stated that “unless the product involved is chiefly in a metallic form, the ordinary ores, minerals, concentrates, residues, oxides, and dross or slag obtained from processing a metal, are more likely to be a combination of chemical elements such as oxides, sulfates, salts, and similarly combined forms.” Accordingly, we stated that where the component material of chief value is a chemical compound containing combined metal, the product is not considered to be an article of metal within the meaning of TSUS item 806.30

In two prior rulings, CBP has ruled that neither tungsten oxide nor ammonium paratungstate exported for conversion into tungsten metal powder or tungsten carbide qualified for preferential treatment under 806.30, TSUS, as the exported materials consisted of chemical compounds rather than actual metals. See HQ 067631, dated December 29, 1981, and HQ 052750, dated October 14, 1977.

Consistent with the above-cited rulings, it is our opinion that the tungsten ore concentrate is a chemical compound of metal and not an article of metal for purposes of subheading 9802.00.60, HTSUSA. The tungsten ore is used to produce metal but does not contain metal itself. We also note that tungsten concentrates are classified under Section V, HTSUSA, relating to mineral products (specifically, Chapter 26, HTSUS -- "Ores, slag and ash"), rather than Section XV, HTSUSA, relating to base metals and articles of base metal.

Therefore, we find that the APT is not eligible for the partial duty exemption when returned to the United States, as the exported tungsten ore concentrates do not qualify as articles of metal for purposes of subheading 9802.00.60, HTSUSA.

HOLDING:

Based on the facts presented, we find that the APT, upon re-importation into the United States does not qualify for preferential tariff treatment under subheading 9802.00.50 or 9802.00.60, HTSUSA. The APT is classified in heading 2841, HTSUSA. Specifically, it is classified in subheading 2841.80.0010, HTSUSA, which provides for salts of oxometallic or peroxometallic acids: tungstates (wolframates), of ammonium. The general, column one rate of duty is 5.5% ad valorem.

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

Sincerely,

Gail A. Hamill, Chief
Tariff Classification and Marking Branch

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