H311142

HQ H311142 May 28, 2024 OT:RR:CTF:FTM H311142 BJK JMV CATEGORY: Classification; Valuation TARIFF NO.: 3921.90.15 Center Director U.S. Customs and Border Protection Apparel, Footwear, Textiles Center 555 Battery Street, Room 401 San Francisco, CA 94111 ATTN: Stephen Bono, Import Specialist RE: Application for Further Review of Protest No. 1503-20-100026; Tariff Classification of material constructed from ultra-high molecular weight polyethylene filaments; Valuation Dear Center Director: Below is CBP’s decision regarding the Application for Further Review (“AFR”) of Protest No. 1503-20-100026, timely filed on or about March 11, 2020, by the law firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, on behalf of their client DSM Dyneema BV, LLC (“Protestant” or “DSM Dyneema”), concerning: (1) the tariff classification of several materials constructed from ultra-high molecular weight polyethylene filaments under the Harmonized Tariff Schedule of the United States (“HTSUS”); and (2) the proper method of appraisement under 19 U.S.C. § 1401a of the imported merchandise from the Netherlands. FACTS: The merchandise at issue consists of three styles of material referred to as “HB25,” “HB26,” and “HB50” (collectively “HB materials”). According to Protestant, the HB materials are constructed from ultra-high molecular weight polyethylene filaments (“UHMWPE”) for low weight hard armor applications. Protestant provided an excerpt of an article from the European Journal of Mechanics – A/Solids entitled “The effect of shear strength on the ballistic response of laminated composite plates” that describes the manufacturing process of HB materials. The article describes the manufacturing process of the HB materials as follows: Step I: Fibres are produced by a gel-spinning/hot drawing process [...]. The UHMWPE is dissolved in a solvent at a temperature of 150°C and the solution is pumped through a spinneret containing a few hundred capillaries in order to form liquid filaments. These liquid filaments are then quenched in water to form a gel-fibre. The gel-fibre is drawn at a strain rate on the order of l s?1 in hot air (at 120°C), resulting in a highly oriented (crystalline) fibre of diameter 17 ?m. Step II: Fibres are aligned into tows, coated in matrix resin solution and are then formed into a [0°/90°/0°/90°] stack. The stack is dried to remove the matrix solvent. Step III: The [0°/90°/0°/90°] stack is cut, laid-up to the required thickness and hot pressed (20 MPa at 120° C). Bonding of the layers is achieved by the matrix material. The fibre diameter is unchanged by the hot-pressing operation, although a proportion of the fibres change their cross-sectional shape. See K. Karthikeyan et. al., The effect of shear strength on the ballistic response of laminated composite plates, 42 European Journal of Mechanics – A/Solids 35-37 (2012). U.S. Customs and Border Protection (“CBP”) tested the HB materials, and the San Francisco CBP Laboratory Report No. SF20190618, dated August 14, 2019, details the initial analysis of the HB materials. The New York CBP Laboratory Report Nos. NY20210282, NY20210283, and NY20210284, dated April 28, 2021, provide additional information pertaining to the HB materials. Their cumulative findings are detailed below: HB25 SF Laboratory Report No. SF20190618: The HB25 sheet is composed of two layers of filament fiber tow of polyethylene. The parallel fiber layers alternate at 90 degree angles. The two layers of the HB25 sample are held together with a polyetherurethane resin. The HB25 sheet has the following composition, by weight: 83 percent polyethylene textile fibers and 17 percent polyurethane plastic. NY Laboratory Report No. NY20210282: The sample, a swatch claimed to be “HB25”, weighs 134.3 grams per square meter. The sample is composed of two layers bonded together with a resin material. Each layer has parallel oriented filament fibers held together with a binder/resin. The direction of fibers in each layer [are oriented] 90 degrees to the direction of fibers in the adjacent layer. HB26 SF Laboratory Report No. SF20190618: The HB26 sheet is composed of four layers of filament fiber tow of polyethylene. The parallel fiber layers alternate at 90 degree angles. The four layers of the HB26 sample are held together with a polyetherurethane resin. The HB26 sheet has the following composition, by weight: 93 percent polyethylene textile fibers and 7 percent polyurethane plastic. NY Laboratory Report No. NY20210283: The sample, a swatch claimed to be “HB26”, weighs 270.8 grams per square meter. The sample is composed of four layers bonded together with a resin material. Each layer has parallel oriented filament fibers held together with a binder/resin. The direction of fibers in each layer [are oriented] 90 degrees to the direction of fibers in the adjacent layer. HB50 SF Laboratory Report No. SF20190618: The HB50 sheet is composed of four layers of filament fiber tow of polyethylene. The parallel fiber layers alternate at 90 degree angles. The four layers of the HB50 sample are held together with a co-polymer matric of polyisoprene rubber and styrene plastic. Polyisoprene rubber appears to be the predominate polymer in the mixture. The HB50 sheet has the following composition by weight: 85 percent polyethylene textile fibers and 15 percent rubber/plastic co-polymer. NY Laboratory Report No. NY20210284: The sample, a swatch claimed to be “HB50[“] weighs 244.3 grams per square meter. The sample is composed of four layers bonded together with a resin material. Each layer has parallel oriented filament fibers held together with a binder/resin. The direction of fibers in each layer [are oriented] 90 degrees to the direction of fibers in the adjacent layer. The HB materials were entered into the United States between November 9, 2018 and March 27, 2019, under subheading 5407.30.1000, HTSUSA (“Annotated”), which provides for “[w]oven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Fabrics specified in note 9 to section XI: Over 60 percent by weight of plastics.” The 2018-2019 applicable rate of duty for subheading 5407.30.1000, HTSUSA, was Free. Between September 13, 2019 to October 25, 2019, CBP liquidated the HB materials under subheading 5407.30.9000, HTSUSA, which provides for “[w]oven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Fabrics specified in note 9 to section XI: Other.” The 2019 applicable rate of duty for subheading 5407.30.9000, HTSUSA, was 8% ad valorem. Protestant now argues that the subject merchandise is classified in subheading 5603.14.90, HTSUS, which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated: Of man-made filaments: Weighing more than 150 g/m2: Other.” The 2019 applicable rate of duty for subheading 5603.14.90, HTSUS, was Free. Moreover, Protestant provides that the HB materials were not appraised correctly. On the entry summary, the only deductions calculated were the expenses for the customs brokerage and duties and fees. Specifically, Protestant provides the following with regard to the deductions that were not made: The terms of sale reflected on the commercial invoices is DDP delivery point (Tarboro NC). The bill of lading also states that all freight charges are prepaid to Tarboro, NC. Based upon these facts, the proper transaction value of the merchandise is the invoice price, with the deductions for: the actual costs of transportation from the seller’s premises until delivery in Tarboro, NC; all other costs incident to international shipment and delivery in the U.S. (e.g., customs brokerage fees and related expenses; insurance; and customs duties and fees payable upon importation). See 19 C.F.R. §§ 152.102(f), 152.103. Therefore, Protestant concludes that the actual proper transaction value of the HB material is the invoice price, with the deductions for any costs ass

CLASSIFICATION Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed on or about March 11, 2020, within 180 days of liquidation. 19 U.S.C. § 1514(c)(3). Further Review of Protest No. 1503-20-100026 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(c) because the decision against which the protest was filed is alleged to be inconsistent with matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts. Classification of goods under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied in order. The 2020 HTSUS provisions under consideration are as follows: 3921 Other plates, sheets, film, foil and strip, of plastics:3921.90 Other:3921.90.15 Other* * *5407 Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404:* * *5603 Nonwovens, whether or not impregnated, coated, covered or laminated:* * *Note 1(h) to Section XI, which covers Chapter 54 and 56, HTSUS, provides: This section does not cover: …(h) Woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof, of chapter 39;* * *Note 9 to Section X1, which covers Chapter 54, provides:The woven fabrics of chapters 50 to 55 include fabrics consisting of layers of parallel textile yarns superimposed on each other at acute or right angles. These layers are bonded at the intersections of the yarns by an adhesive or by thermal bonding.* * *Note 3 to Chapter 56, HTSUS, provides the following: