N339760

N339760 May 21, 2024 CLA-2-84:OT:RR:NC:N1:103 CATEGORY: Classification; Country of Origin TARIFF NO.: 8419.90.9580 Melissa Brewer Kelley Drye & Warren LLP 3050 K Street NW, Suite 400 Washington, DC 20007 RE: The tariff classification, country of origin, and United States-Mexico-Canada Agreement (USMCA) eligibility of structured packing and trays/internals Dear Ms. Brewer: In your letter dated April 26, 2024, you requested a binding ruling on behalf of your client, Sulzer Chemtech USA Inc., concerning the tariff classification, the country of origin, and the eligibility under the USMCA of structured packing and trays/internals. The first item under consideration is referred to as structured packing, which is used in a distillation tower for the purposes of mass transfer. The structured packing is constructed of sectional layers of thin, corrugated, and surface textured metal. Multiple layers are intentionally stacked to form flow channels that promote liquid distribution. The stacks are placed inside a distillation tower, where fluids (in both a liquid and gas phase) travel through the structured packing to improve mass transfer and separation. The second item under consideration is referred to as a tray or internal that is used within a distillation tower, and is further categorized into conventional trays, high-capacity trays, and hi-fi trays. While functionally the same, each variant possesses different capacities and efficiencies. The trays are installed horizontally inside a distillation tower and contain openings throughout their structure. The openings help fluids interact as they pass through the tower. You state that the purpose of the trays is to serve as a “theoretical stage” which you explain enhances the intensity of separation within the tower as more trays are added. The applicable subheading for the structured packing and tray products, will be 8419.90.9580, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: Parts: Other: Other: Other.” The rate of duty will be 4.0 percent ad valorem. In your letter, you inquire whether Section 301 measures are applicable to the structured packing and tray products. Pictures and a description of the manufacturing processes were provided with your submission. The structured packing is manufactured in Mexico from stainless steel coil sourced from China. Using a semi-automated process, the steel coil is fed into a texturing press machine that simultaneously adds surface texturing to the coil material and creates openings of a precise size and shape. The coiled material continues through a corrugation machine where it is further formed and shaped into a particular pattern. A machine cuts the formed material into individual pieces, which are used by a worker to build a segment or block. To construct a segment, a worker stacks individual pieces into a specialized fixture, which combines the pieces into a single unit. The tray products are manufactured in Mexico from Chinese flat sheets of steel that are placed in a laser and punch machine to create openings of a specific size and shape. The machine also cuts out profiles from the sheets, which will serve as the basic pieces needed to form a panel. At the next station, a worker uses a press brake to bend and work each profile into the specified formation. Lastly, a worker welds the component parts together to form the final tray product. With regard to your request for the appropriate country of origin of the structured packing and tray products, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part. When determining the country of origin for purposes of applying trade remedies, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use, different from that possessed by the article prior to processing. See Texas Instruments, Inc. v. United States, 681 F.2d 778 (CCPA 1982). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Here, the metal coils and sheets will be manufactured into the corresponding structured packing and tray products using various metalworking machinery. Once the materials are bent, punched, textured, shaped, cut, and joined, they are no longer non-dedicated materials but emerge as new and different articles dedicated for use within a distillation tower. The sum of all the processing steps alters the physical characteristics of the metal sheets and coils, thereby limiting their potential uses. Each material undergoes a change in name, use, and character that differs from the original material subjected to the processing. As such, the country of origin of the structured packing and tray products is Mexico for purposes of Section 301 Trade Remedies. You also inquire whether the structured packing and tray products are eligible for preferential treatment under the USMCA. The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if— (i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; (ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from origina

is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use, different from that possessed by the article prior to processing. See Texas Instruments, Inc. v. United States, 681 F.2d 778 (CCPA 1982). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).Here, the metal coils and sheets will be manufactured into the corresponding structured packing and tray products using various metalworking machinery. Once the materials are bent, punched, textured, shaped, cut, and joined, they are no longer non-dedicated materials but emerge as new and different articles dedicated for use within a distillation tower. The sum of all the processing steps alters the physical characteristics of the metal sheets and coils, thereby limiting their potential uses. Each material undergoes a