Applicability of partial duty exemption to copper cathode sheets from Canada; eligible article; 554901; 067757; 067419; 055336

HQ 556118 September 26, 1991 CLA-2 CO:R:C:S 556118 DSN CATEGORY: Classification TARIFF NO.: 9802.00.60 Mr. William T. Corcoran Manager, Regulatory Affairs The Myers Group, Inc. Myers Building Rouses Point, New York 12979-1091 RE: Applicability of partial duty exemption to copper cathode sheets from Canada; eligible article; 554901; 067757; 067419; 055336 Dear Mr. Corcoran: This is in response to your letter of July 3, 1991, as well as other submissions forwarded to us by our New York office, on behalf of Hudson Bay Mining & Smelting Co., Ltd., requesting a ruling on the applicability of subheading 9802.00.60, Harmonized Tariff Schedule of the United States (HTSUS), to certain copper cathodes sheets imported from Canada. FACTS: According to your submissions, copper sulfide concentrates of U.S. origin (containing 30% copper) are exported to Manitoba, Canada for processing. In Manitoba, the concentrates are blended with Canadian-origin copper sulfide concentrates and then smelted to produce copper anodes with assays of 99.3% to 99.4% copper. The copper anodes are then further refined electrolytically to produce copper cathode sheets. The copper cathode sheets upon importation into the U.S. will be used primarily in the manufacture of continuous cast copper rods which are utilized in the manufacture of wire and cable for automotive, building, power and telecommunications industries. ISSUE: Whether the copper cathode sheets will be entitled to the partial duty exemption under HTSUS subheading 9802.00.60 when returned to the U.S. LAW AND ANALYSIS: HTSUS subheading 9802.00.60 provides a partial duty exemption for: [a]ny article of metal (as defined in U.S. note 3(d) of this subchapter) manufactured in the United States or subjected to a process of manufacture in the United States, if exported for further processing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United States, is returned to the United States for further processing. Articles of metal satisfying these statutory requirements may be classified under HTSUS subheading 9802.00.60 with duty only on the value of such processing done outside the U.S., upon compliance with the documentation requirements of section 10.9, Customs Regulations (19 CFR 10.9). To receive subheading 9802.00.60, HTSUS, treatment, the product upon exportation from the U.S. must be an "article of metal" as defined in U.S. note 3(d), subchapter II, Chapter 98, HTSUS. U.S. note 3(d), states: For purposes of subheading 9802.00.60, the term "metal covers (1) the base metals enumerated in additional U.S. note 1 to section XV (2) arsenic, barium, boron, calcium, mercury, selenium, sililcon, strontium, tellurium, thorium, uranium and the rare-earth elements; and (3) alloys of any of the foregoing. The base metals enumerated in additional U.S. note 1, Section XV, HTSUS, include "copper." The General Explanatory Notes to chapter 26, HTSUS, describe ores and concentrates as follows: The term "ores" applies to metalliferous minerals associated with the substances in which they occur and with which they are extracted from the mine; it also applies to native metals in their gangue (e.g., metalliferous sands). Ores are seldom marketed before "preparation" for subsequent metallurgical operations. The most important preparatory processes are those aimed at concentrating the ores. For the purposes of headings 26.01 to 26.17, the term "concentrates" applies to ores which have had part or all of the foreign matter removed by special treatments, either because such foreign matter might hamper subsequent metallurgical operations or with a view to economical transport. In Headquarters Ruling Letter (HRL) 067757 of June 25, 1982, dry alumina extrudate (an oxide) was exported for further processing, and we held that, in its chemical oxide form, it would not be considered an article of metal within the meaning of item 806.30, Tariff Schedules of the United States (TSUS) (the precursor provision to subheading 9802.00.60, HTSUS). In HRL 067419 of November 4, 1981, oxide materials containing molybdenum were similarly deemed to be chemical compounds of metal and not articles of metal, thereby rendering the materials ineligible for item 806.30, TSUS treatment. In HRL 055336 of November 7, 1978, we held that a rare earth fluorocarbonate was not a metal article for purposes of item 806.30, TSUS, and stated that "unless the product involved is chiefly in a metallic form, the ordinary ores, minerals, concentrates, residues, oxides, and dross or slag obtained from processing a metal, are more likely to be a combination of chemical elements such as oxides, sulfates, salts, and similarly combined forms." In addition, we have held that molybdenum containing ores and molybdic oxides do not constitute an article of metal for tariff purposes. See HRL 554901 of January 26, 1989. We stated that molybdenum ores bear none of the characteristics of molybdenum metals, and molybdic oxides are non-metallic compounds derived from molybdenum ore or the oxidation of molybdenum metal. Consistent with the above-cited rulings, it is our opinion that the copper sulfide concentrates are chiefly non-metallic chemical compounds derived from ore and not articles of metal for purposes of subheading 9802.00.80, HTSUS. We also note that copper concentrates are classified under Section V, HTSUS, relating to mineral products (specifically, Chapter 26, HTSUS -- "Ores, slag and ash"), rather than Section XV, HTSUS, relating to base metals and articles of base metal. Therefore, we find that the copper cathode sheets are not eligible for the partial duty exemption when returned to the U.S., as the exported copper sulfide concentrates do not qualify as articles of metal for purposes of subheading 9802.00.60, HTSUS. HOLDING: On the basis of the information provided, the copper sulfide concentrates to be exported do not constitute articles of metal within the meaning of subheading 9802.00.60, HTSUS, and, therefore, the copper cathode sheets will not be eligible for the partial duty exemption provided thereunder when returned to the U.S. Sincerely, John Durant, Director Commercial Rulings Division