The tariff classification of magnesium alloy ingots fromChina.

NY D85642 December 17, 1998 CLA-2-81:RR:NC:1:118 D85642 CATEGORY: Classification TARIFF NO.: 8104.19.0000 Mr. Johnny Ip Fortune Plastic & Metal, Inc. 20 Carbon Place Jersey City, N.J. 07305 RE: The tariff classification of magnesium alloy ingots from China. Dear Mr. Ip: In your letter dated October 28, 1998, you requested a tariff classification ruling. The subject items are described as follows: Transaction 1 - The export of scrap magnesium from the U.S., where the scrap would be converted by refining to an alloy ingot for a fee (tolled), and then returned to the U.S. A fee would be paid to the China facility for upgrading the scrap to ingot. The scrap would be bought and the ingot sold in the U.S. This is similar to improving the scrap to make it marketable for reuse at a higher price in the die-casting and automotive parts sectors. Transaction 2 - Simply purchasing magnesium alloy ingot from China and importing it into the U.S. for sale. In both cases, the magnesium ingot would be an alloy similar to ASTM B93/B93M-AZ91D & AM60B, which are composed of approximately 90% magnesium, with the balance other metals. In neither case, does the magnesium exceed 95% by weight. The applicable subheading for the magnesium alloy ingots in both transactions will be 8104.19.0000, Harmonized Tariff Schedule of the United States (HTS), which provides for magnesium and articles thereof, including waste and scrap: unwrought magnesium: other. The duty rate will be 6.5% ad valorem. The duty rate in 1999 will remain unchanged. Pure primary magnesium which includes products that contain 50% or greater but less than 99.8% primary magnesium, by weight, and that do not conform to ASTM Specifications for alloy magnesium are covered by Antidumping case A-570-832. We suggest that you request a scope ruling for your specific product by writing to the Department of Commerce, ITA, Office of Antidumping Compliance, Import Administration room B099, 14th Street and Constitution Avenue, NW, Washington, DC 20230. You requested additional information that we reply in a synopsis form as follows: Customs duties will be calculated based upon the Transaction Value (if it exists) of your purchase. Many factors are considered for Customs to appraise your shipment. Basically, as in most cases, it is the price paid or payable to the manufacturer of the goods plus certain additions that include packing costs, selling commissions, the value of any assist, any royalty or license fee, and the proceeds of any subsequent resale, disposal, or use of the imported merchandise that accrue, directly or indirectly, to the seller (section 152.103 of the Customs Regulations). So if your agreement with the supplier/manufacturer is at an F.O.B. price, U.S. Customs would apply the 6.5% rate of duty to that amount. The upgrading (tolling) has a direct effect in that it is a manufacturing process that is a component of the price that you pay (or is payable) to the manufacturer. To prepare and expedite the Custom Clearance Process, you may familiarize yourself with the U.S. Customs Regulations or perhaps employ the services of a U.S. Customs or Freight Forwarder. Another binding ruling, due to the fact that the consumers change is unnecessary unless the manufacturing processes change. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of this 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 Kathy Campanelli at 212-466-5492. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division