H332811

HQ H332811 February 8, 2024 OT:RR:CTF:ERH332811 FKM Angel Lui Cooper Plating Inc. 1150 Nicholson Road Newmarket, Canada L3Y9C4 RE: Temporary importation under bond of tin-plated brass strips Dear Ms. Lui: This letter is in response to your request for a ruling, dated June 8, 2023, on behalf of Cooper Plating Inc. (“Cooper”), regarding whether tin-plated brass strips may be imported under a temporary importation under bond (“TIB”) and, if so, whether the processing of the strips into brass plumbing parts are subject to the United States Mexico Canada Agreement (“USMCA”) lesser of duty rule. FACTS: In your letter, you request guidance on whether you may enter tin-plated brass strips into the United States under a TIB, as the strips are to be processed into articles manufactured or produced in the United States under subheading 9813.00.05, Harmonized Tariff Schedule of the United States (“HTSUS”). As you explained, Cooper is a Canadian metal plating and slitting manufacturer that purchases continuous brass strips from China, imports them into Canada, where the strips are plated with tin and slit. You explained that, in the United States, the strips will be processed into brass plumbing parts for use in vehicle manufacturing. The parts are then to be exported to Mexico for that use, and the scrap materials will be exported to Canada. ISSUE: Whether Cooper’s tin-plated brass strips qualify for TIB treatment under subheading 9813.00.05, HTSUS, as articles to be processed into articles manufactured or produced in the United States. Whether Cooper’s brass plumbing parts are subject to the United States Mexico Canada Agreement (“USMCA”) lesser of duty rule. LAW AND ANALYSIS: Various statutory and regulatory authorities are relevant for a determination as to whether an article qualifies for TIB treatment under subheading 9813.00.05 and the USMCA lesser of duty rule. 19 C.F.R. §§ 10.31-10.40 establishes the regulations governing TIB entries, with 19 C.F.R. § 10.38 specifically detailing the exportation process for TIBs. 19 U.S.C. § 1313 codifies U.S. Customs and Border Protection (“CBP”) procedures regarding drawback and refunds, with 19 C.F.R. § 190 expanding upon modernized drawback claims. Whether Cooper’s tin-plated brass strips qualify for TIB treatment under subheading 9813.00.05, HTSUS, as articles to be processed into articles manufactured or produced in the United States. Pursuant to General Note 1, HTSUS, all merchandise imported into the United States is subject to duty unless specifically exempted. Under subheading 9813.00.05, HTSUS, articles to be repaired, altered, or processed (including processes that result in articles manufactured or produced in the United States), may be entered temporarily free of duty, under a bond for exportation, which must occur within one year from the date of importation. To satisfy the requirements for this TIB entry, the imported article must be timely exported. See U.S. Note 1(a) of Subchapter XIII, Chapter 98, HTSUS. The one-year period may be extended for additional periods, not to exceed three years. Id. Additionally, to qualify under this provision, the merchandise may not be imported for the purpose of sale or sale on approval, id., and an application for exportation must be made on CBP Form 3495. 19 C.F.R. § 10.38. Subheading 9813.00.05, HTSUS, does not define the term “processed,” though CBP has analyzed this term for the purpose of TIB entries in previous rulings. For example, “[t]he processing can be a relatively minor procedure or extensive enough to be considered a manufacture or production.” HQ 224661 (dated January 11, 1994); see also 19 C.F.R. § 190.2 (“Manufacture or production means a process, including, but not limited to, an assembly, by which merchandise is either made into a new and different article having a distinctive name, character or use; or is made fit for a particular use even though it is not made into a new and different article.”) (emphasis added). Additionally, CBP has “liberally interpreted this provision [heading 9813.00.05 HTSUS] to include processes which would not otherwise qualify as a manufacture or production for drawback under 19 U.S.C. 1313(a) or (b).” HQ 226589 (dated March 1, 1996); see also HQ 957424 (dated May 12, 1995) (determining that slitting steel is an allowable operation under subheading 9813.00.05 even though it did not rise to the level of a manufacture). An article is “processed” when the “result is a change in the character and use” of the merchandise to meet certain customer specifications. HQ 229962 (dated August 1, 2003). For example, the blending and grading of wheat was determined to be a “process” for TIB purposes because the “character [was] changed in the grade, protein level, moisture content or falling number, and the use [was] changed to meet certain customer specifications.” Id. Perhaps more relevant to the present facts, CBP determined that “creating welded tube from the titanium strip by rolling, welding and cutting is a process within the meaning of subheading 9813.00.05, HTSUS, and the titanium strip may be entered into the U.S. under subheading 9813.00.05, HTSUS.” HQ 230286 (dated April 12, 2004). The “welded tubing [was] an article manufactured or produced in the U.S., because, when compared with the imported titanium strip, the welded tubing [was] a new and different article having a distinctive name, character and use.” Id. (citing Anheuser-Busch v. United States, 207 U.S. 556 (1908)). The transformation of tin-plated brass strips to plumbing parts constitutes “processing” under subheading 9813.00.0520, HTSUS, as the activity results in a new and different article having a distinctive name, character, and use. HQ 230286 (dated April 12, 2004). When imported, the strips act as a raw material to be made into the final brass plumbing part, which will ultimately be used for the manufacture of vehicles. This U.S. processing alters the name of the article, from brass strips to a plumbing part, which has a distinct character—as further noted by the new HTSUS subheading—and the use of the article changes, as it is now able to be used for vehicle manufacturing. Accordingly, we find that the changing of the tin-plated brass strips to brass plumbing parts is indeed “processing” under subheading 9813.00.05, HTSUS. For articles to make entry under subheading 9813.00.05, HTSUS, two conditions must be met. First, articles may not be processed into “alcohol, distilled spirits, wine, beer or any dilution or mixture of any or all of the foregoing; a perfume or other commodity containing ethyl alcohol . . . ; or a product of wheat.” Ch. 98, Sub. XIII, U.S. Note 2(a), HTSUS. Second, if the processing results in an article other than that described above in U.S. Note 2(a): A complete accounting will be made to the Customs Service for all articles, wastes and irrecoverable losses resulting from such processing; and All articles and valuable wastes resulting from such processing will be exported or destroyed under customs supervision within the bonded period; except that in lieu of the exportation or destruction of valuable wastes, duties may be tendered on such wastes at rates of duties in effect for such wastes at the time of importation. Ch. 98, Sub. XIII, U.S. Note 2(b), HTSUS. The first condition for entry under subheading 9813.00.05, HTSUS has been met, as the articles will not be processed into “alcohol, distilled spirits, wine, beer or any dilution or mixture of any or all of the foregoing; a perfume or other commodity containing ethyl alcohol . . . ; or a product of wheat.” Ch. 98, Sub. XIII, U.S. Note 2(a), HTSUS. In regard to the second condition, Cooper has represented that any scraps from the U.S. processing will be exported to Canada. Thus, to satisfy this condition, Cooper must provide CBP with a complete accounting for all articles, wastes and irrecoverable losses resulting from the aforementioned processing, as established in Ch. 98, Sub. XII

Various statutory and regulatory authorities are relevant for a determination as to whether an article qualifies for TIB treatment under subheading 9813.00.05 and the USMCA lesser of duty rule. 19 C.F.R. §§ 10.31-10.40 establishes the regulations governing TIB entries, with 19 C.F.R. § 10.38 specifically detailing the exportation process for TIBs. 19 U.S.C. § 1313 codifies U.S. Customs and Border Protection (“CBP”) procedures regarding drawback and refunds, with 19 C.F.R. § 190 expanding upon modernized drawback claims.Whether Cooper’s tin-plated brass strips qualify for TIB treatment under subheading 9813.00.05, HTSUS, as articles to be processed into articles manufactured or produced in the United States.Pursuant to General Note 1, HTSUS, all merchandise imported into the United States is subject to duty unless specifically exempted. Under subheading 9813.00.05, HTSUS, articles to be repaired, altered, or processed (including processes that result in articles manufactured or produced in the United States), may be entered temporarily free of duty, under a bond for exportation, which must occur within one year from the date of importation. To satisfy the requirements for this TIB entry, the imported article must be timely exported. See U.S. Note 1(a) of Subchapter XIII, Chapter 98, HTSUS. The one-year period may be extended for additional periods, not to exceed three years. Id. Additionally, to qualify under this provision, the merchandise may not be imported for the purpose of sale or sale on approval, id., and an application for exportation must be made on CBP Form 3495. 19 C.F.R. § 10.38.Subheading 9813.00.05, HTSUS, does not define the term “processed,” though CBP has analyzed this term for the purpose of TIB entries in previous rulings. For example, “[t]he processing can be a relatively minor procedure or extensive enough to be considered a manufacture or production.” HQ 224661 (dated January 11, 1994); see also 19 C.F.R. § 190.2 (“Manufacture or production me