Subheading 9813.00.05, HTSUS

HQ 229940 May 6, 2003 CON-9-04 RR:CR:DR 229940RDC CATEGORY: Temporary Importation Under Bond Mr. Richard Nakamoto Meiko America, Inc. 6412 S. 216th Street Kent, WA 98032 RE: Subheading 9813.00.05, HTSUS Dear Mr. Nakamoto: This is in response to your undated letter received April 29, 2003, on behalf of your client, NGK Metals Corporation. In your letter you request a ruling on the eligibility for entry, under a Temporary Importation Bond, in subheading 9813.00.05, HTSUS, as articles to be repaired, altered or processed for beryllium copper strips. Our ruling follows. FACTS: According to your submission, beryllium copper strips in coil form in two sizes will be imported from Japan into the United States. Depending on the type of finished produce required the copper strip would be subject to either a “standard age hardenable process” or a “standard mill hardened process. Once the copper strip has undergone one of these processes the strip’s strength is increased, and it is made more narrow and thinner. Some trimming of the strip is performed to eliminate “crack[ed] edges.” About 8 percent of the material becomes scrap. Both the treated beryllium copper strip and the scrap is exported back to Japan. If the “standard age hardenable process” is used the strength of the coil is increased by “applying cold roll and heat treating process.” This process consist of subjecting the coil to “cold rolling” which reduces the thickness and increases the length of the copper strip. The thickness may be reduced up to 80 percent during one “cold roll treatment.” The strip is then annealed, i.e., the strip is subject to heat in a furnace with temperatures ranging between 1050 and 1560 degrees Fahrenheit. Depending on the beryllium copper coil thickness required, the strip may be subjected to additional cold rolling and annealing. After the final annealing the copper strip is also cleaned, which is the removal of oxidized material with chemicals and abrasives. Finally, the strip may be straightened by “level rolling under tension.” The “standard mill hardened process” is used on the copper strip when much more strength is required. The beryllium copper strip would undergo the “standard age hardenable process” but undergo additional annealing at a temperature of 640 degrees Fahrenheit. A final cleaning will also be performed. The finished product after either process is thinner and narrower beryllium copper strip or foil. ISSUE: Whether the above-described procedures constitute repair, alteration or processing (including processes which result in articles manufactured or produced in the United States) for purposes of duty-free Temporary Importation Under Bond treatment under subheading 9813.00.05, HTSUS? LAW AND ANALYSIS: General Note 1, Harmonized Tariff Schedule of the United States (“HTSUS”), dictates that all merchandise imported into the United States is subject to duty unless specifically exempted therefrom. Subheading 9813.00.05, HTSUS, provides for duty-free entry, under bond, for merchandise imported into the United States, for a temporary period, for repair, alteration, or processing. Pursuant to U.S. Notes 1(a) and (c) of Subchapter XIII of Chapter 98, HTSUS, which contains subheading 9813.00.05, articles to be repaired, altered or processed, including processes which result in articles manufactured or produced in the United States, may enter into the United States temporarily free of duty under a Temporary Importation Under Bond (TIB) for exportation within one year from the date of importation. This one year period may be extended for one or more additional periods, which when added to the initial period may not exceed three years. See 19 CFR 10.37. The imported merchandise may not be imported for the purpose of a sale or sale on approval. In HRL 224661 (January 11, 1994), regarding subheading 9813.00.05, we stated that "the processing can be a relatively minor procedure or extensive enough to be considered a manufacture or production." In other rulings involving subheading 9813.00.05, we have held the following to be a processing for purposes of subheading 9813.00.05: a melting procedure (HQ 223003 citing DB 200149 where we held a freezing procedure to be a processing); the cutting and sewing of airline seat covers (HQ 222106); embroidery (HQ 223640). In HRL 224283 (March 17, 1993), it was held that the trimming of steel coils to reduce their width constitutes a processing within the meaning of subheading 9813.00.05, HTSUS. In HRL 228509 (April 9, 2002) we held that the processing of steel which involved only slitting, and did not alter the characteristics of the imported steel would constitute a process within the meaning of 9813.00.05, HTSUS. Based upon the above authorities, we determine that the above-described procedures, as performed on the beryllium copper coil, constitute processing within the meaning of subheading 9813.00.05. Moreover, U.S. Note 2(b) of Subchapter XIII, Chapter 98, HTSUS, provides that merchandise may be admitted into the United States under subheading 9813.00.05 only on condition that: If any processing of such merchandise results in an article . . . manufactured or produced in the United States: (i) A complete accounting will be made to the Customs Service for all articles, wastes and irrecoverable losses resulting from such processing; and (ii) All articles and valuable waste resulting from such processing will be exported or destroyed under Customs supervision within the bonded period; except in lieu of the exportation or destruction of valuable wastes, duties may be tendered on such wastes or rates of duties in effect for such wastes at the time of importation. Therefore, per U.S. Note 2(b) of Subchapter XIII, Chapter 98, HTSUS, any processing of the beryllium copper coil which amounts to a manufacture or production of articles in the United States must include a complete accounting to Customs for all articles, wastes, or irrecoverable losses resulting from the processing, and all articles and valuable wastes resulting from such processing must be exported or destroyed under Customs supervision within the bonded period. HOLDING: Based on the information provided, the procedures described above to which the beryllium copper strip will be subjected qualify as a process under subheading 9813.00.05, HTSUS, for temporary admission into the United States, under bond, without the payment of duty. Sincerely, Myles Harmon, Director Commercial Rulings Division