H332368

H332368 May 13, 2024 OT:RR:CTF:VS H332368 RRB CATEGORY: Origin Mr. Lawrence M. Friedman Barnes, Richardson & Colburn LLP 303 East Wacker Drive Suite 305 Chicago, IL 60601 RE: USMCA eligibility; Country of origin of aluminum billets for Section 232 and Section 301 duties; Marking; De Minimis Dear Mr. Friedman: This is in response to your ruling request, dated March 3, 2023, filed on behalf of HMA, Inc. (“HMA”). In your letter, you request a binding ruling regarding preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”) for aluminum billets produced in Mexico. You also request determinations on the country of origin of the finished aluminum billets for purposes of Section 232 and Section 301 duties and country of origin marking. Finally, you seek guidance on the applicability of the USCMA de minimis rule under General Note (“GN”) 11(e), Harmonized Tariff Schedule of the United States (“HTSUS”), and the de minimis rule for purposes of country of origin marking under 19 C.F.R. § 102.13. On March 5, 2024, we requested additional information that is necessary to respond to your ruling request. You submitted a supplemental submission, dated March 13, 2024, responsive to this request. In response to further email exchanges, you submitted additional comments in an email dated April 2, 2024. Our response below considers the information presented in both of your submissions and email exchanges. FACTS: The products at issue are identified as alloyed aluminum billets made with 0.5% by weight of silicon, which will be sold to manufacturers of commercial buildings and construction, trucks, trailers, and military motor vehicles. You state that the aluminum billets will be produced in Mexico under three different manufacturing scenarios carried out by HWM, the Mexican subsidiary of HMA, at their factory in Mexico. Under scenario 1, you state that non-alloyed aluminum materials in ingot form that are either domestic products of Mexico, foreign products of Canada, or commingled products of Mexico and Canada will be melted and mixed with other materials, consisting of silicon and copper from Korea, and iron, magnesium, manganese, titanium, and chromium from China, to create a newly alloyed aluminum billet. Under scenario 2, you state that non-alloyed aluminum materials in ingot form with the relative portions (by weight)1 likely to be 60% from China, 20% from South Korea, and 20% from Australia will be melted and mixed with other materials, consisting of silicon and copper from Korea, and iron, magnesium, manganese, titanium, and chromium from China, to create a newly alloyed aluminum billet. Under scenario 3, you state that non-alloyed aluminum materials in ingot form with the relative portions (by weight)2 likely to be 60% from South Korea or Australia, 10% from Canada, and the remaining 30% from alloyed aluminum scrap generated as a result of production in Mexico will be melted and mixed with other materials, consisting of silicon and copper from Korea, and iron, magnesium, manganese, titanium, and chromium from China, to create a newly alloyed aluminum billet. For all three production scenarios, you explain that melting the aluminum materials requires one multi-chamber furnace and two single-chamber furnaces. A pre- heat oven and electronic pot are required for stirring molten metal. A degassing pot is also used to remove impurities and hydrogen gas from the metal. The billets are formed in a casting machine. The billets also undergo stress-relieving heat treatment in a continuous homogenizing furnace and a batch homogenizing furnace area. Next, a billet cutter cuts the billets. A grinder is used to produce samples for analysis. The billets are inspected for cracking using an ultrasonic flaw detector. A spectrum analyzer is used to confirm the appropriate chemical composition of the billets. The billets undergo a final uniformity check before packaging for export and sale to customers in the United States. Based on the information provided, we confirm that the classification of the finished aluminum billets is under subheading 7601.20, HTSUS, as “[u]nwrought 1 You indicate in your submission, dated March 3, 2023, that non-alloyed aluminum materials are sourced from non-USMCA countries with the relative portions (by value) likely to be 60% from China, 20% from South Korea, and 20% from Australia. However, via email dated March 1, 2024, you corrected your submission, and stated that these percentages are by weight, and not by value. 2 You indicate in your submission, dated March 3, 2023, that non-alloyed aluminum materials are sourced from non-USMCA countries with the relative portions (by value) likely to be 60% from South Korea or Australia, 10% from Canada, and the remaining 30% from Mexican alloyed aluminum scrap. However, via email dated March 1, 2024, you corrected your submission, and stated that these percentages are by weight, and not by value. 2 aluminum: [a]luminum alloys.” We also confirm that the non-alloyed aluminum materials are classified in subheading 7601.10, HTSUS, as “[u]nwrought aluminum: [a]luminum, not alloyed,” while the aluminum scrap described in scenario 3 is classified in subheading 7602.00, HTSUS, as “[a]luminum waste and scrap.” ISSUES: (1) Whether the aluminum billets produced under three different manufacturing scenarios are eligible for preferential tariff treatment under the USMCA. (2) What is the country of origin of the aluminum billets for purposes of Section 232 and Section 301 trade measures? (3) What is the country of origin of the aluminum billets produced under three different manufacturing scenarios for marking purposes? LAW AND ANALYSIS: 1. Eligibility for preferential tariff treatment under 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(a)(i) provides: Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; and . . . 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 originating materials; 3 (iii) the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); … In all three production scenarios, the aluminum billets may contain non- originating ma

1. Eligibility for preferential tariff treatment under 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(a)(i) provides: Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; and . . . 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 originating materials; 3 

(iii) the good is a good produced