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Country of origin of hot-rolled stainless steel rod
Issued September 18, 1996 by U.S. Customs and Border Protection.
Cite this ruling
Copies to clipboard55 559948 (September 18, 1996)
Tariff classification
HTS codes: 1940, 1907, 1982, 1987, 1996, 1986, 1988, 1989, 1026
Headings: 1940, 1907, 1982, 1987, 1996, 1986, 1988, 1989, 1026
Product description
You state that stainless steel billet is purchased in Canada and then shipped to your facility in Korea. In Korea, it is converted to hot-rolled rod in irregular round coils and then shipped to the U.S. You have orally advised that the billets are a product of Canada when shipped to Korea.
CBP rationale
The determination of whether the imported steel rod is a product of Korea depends upon whether the steel billets have been substantially transformed while in Korea. Ferrostaal Metal Corp. v. United States, 664 F. Supp. 535, 537 (CIT 1987). If a substantial transformation occurs from the operations performed in Korea, then that country becomes the country of origin for the hot-rolled steel rods. A substantial transformation occurs when the articles "lose their identity as such, and become new articles having...a new name, character, and use..." Koru North America v. United States, 701 F.Supp. 229, 234 (CIT 1988), citing United States v. Gibson-Thomson Co,, 27 CCPA 267, 270, C.A.D. 98 (1940). See also Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556, 562, 28 S.Ct. 204, 206, 52 L. Ed. 336 (1907). The - 2 - name, character and use test has been adhered to by the courts. Ferrostaal Metals, supra, National Juice Products Association et al. v. United States, 682 F. Supp. 678 (CIT 1986), Uniroyal, Inc. v. United States, 542 F. Supp. 1026 (CIT 1982). In Headquarters Ruling Letter (HRL) 555103 dated February 2, 1989, we held that for purposes of the partial duty exemption under subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUS), Canadian stainless steel billets were substantially transformed into products of the U.S. as a result of "hot rolling" operations which resulted in the production of bar stock and wire rod in coil. We found that the U.S. processing of the Canadian billet not only changed the shape of the metal, but created a new and different article of commerce. (See also HRL 081659 dated March 3, 1989, where we found that hot-rolling steel slabs into steel plate results in a substantial transformation, as the process transformed semi-finished slabs into commercially finished products with significant change in shape and dimensions, and a fundamental change in identity; and HRL 079628 dated August 25, 1987, where we held that a manufacturing process by which steel slabs were hot rolled into a finished steel product altered the identity of the slabs to such an extent that a substantial transformation had occurred.) Similarly, in the subject case, the hot-rolling of stainless steel billets in Korea into coils of steel rod results in a significant change in shape and dimensions of the product and a change in identity of the billets. Accordingly, we find that a substantial transformation occurs as a result of the hot-rolling operations performed in Korea.
Full text
HQ 559948 September 18, 1996 MAR 2-05 RR:TC:SM 559948 BLS CATEGORY: Marking Mr. David Tuthill Product Manager Long Products (Sammi Steel) 19191 South Vermont Avenue Torrance, CA 90502 RE: Country of origin of hot-rolled stainless steel rod Dear Mr. Tuthill: This is in reference to your letter dated June 12, 1996, requesting country of origin information in connection with hot-rolled stainless steel rod shipped from Korea. FACTS: You state that stainless steel billet is purchased in Canada and then shipped to your facility in Korea. In Korea, it is converted to hot-rolled rod in irregular round coils and then shipped to the U.S. You have orally advised that the billets are a product of Canada when shipped to Korea. ISSUE: Whether the country of origin of the imported hot-rolled stainless steel rod is Korea. LAW AND ANALYSIS: The determination of whether the imported steel rod is a product of Korea depends upon whether the steel billets have been substantially transformed while in Korea. Ferrostaal Metal Corp. v. United States, 664 F. Supp. 535, 537 (CIT 1987). If a substantial transformation occurs from the operations performed in Korea, then that country becomes the country of origin for the hot-rolled steel rods. A substantial transformation occurs when the articles "lose their identity as such, and become new articles having...a new name, character, and use..." Koru North America v. United States, 701 F.Supp. 229, 234 (CIT 1988), citing United States v. Gibson-Thomson Co,, 27 CCPA 267, 270, C.A.D. 98 (1940). See also Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556, 562, 28 S.Ct. 204, 206, 52 L. Ed. 336 (1907). The - 2 - name, character and use test has been adhered to by the courts. Ferrostaal Metals, supra, National Juice Products Association et al. v. United States, 682 F. Supp. 678 (CIT 1986), Uniroyal, Inc. v. United States, 542 F. Supp. 1026 (CIT 1982). In Headquarters Ruling Letter (HRL) 555103 dated February 2, 1989, we held that for purposes of the partial duty exemption under subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUS), Canadian stainless steel billets were substantially transformed into products of the U.S. as a result of "hot rolling" operations which resulted in the production of bar stock and wire rod in coil. We found that the U.S. processing of the Canadian billet not only changed the shape of the metal, but created a new and different article of commerce. (See also HRL 081659 dated March 3, 1989, where we found that hot-rolling steel slabs into steel plate results in a substantial transformation, as the process transformed semi-finished slabs into commercially finished products with significant change in shape and dimensions, and a fundamental change in identity; and HRL 079628 dated August 25, 1987, where we held that a manufacturing process by which steel slabs were hot rolled into a finished steel product altered the identity of the slabs to such an extent that a substantial transformation had occurred.) Similarly, in the subject case, the hot-rolling of stainless steel billets in Korea into coils of steel rod results in a significant change in shape and dimensions of the product and a change in identity of the billets. Accordingly, we find that a substantial transformation occurs as a result of the hot-rolling operations performed in Korea. HOLDING: Stainless steel billets imported into Korea from Canada are substantially transformed in Korea as a result of a hot-rolling process which converts the billets into steel rod in irregular coils, articles with an identity, character and use distinct from the billets from which they were made. Therefore, the country of origin of the imported steel rod is Korea. Sincerely, John Durant, Director Tariff Classification Appeals Division
Ruling history
Applicability of partial duty exemption under HTSUS sub- heading 9802.00.60 and quota and tariff treatment to be accorded certain stainless steel bars and wire rod in coil imported from Canada.C.S.D. 84-49;substantial transformation;554592;quota;tariff;U.S. Note 2, subchapter II, Chapter 98, HTSUS
Country of Origin of Sheet Steel in Coils Hot Rolled in Canada From Slabs
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