Steel angles and plates for transmission towers

HQ 731522 December 20, 1989 CLA-2 CO:R:C:G 731522 JMH CATEGORY: Classification TARIFF NO.: Bea Brickell, Esq. Sharretts, Paley, Carter & Blauvelt, P.C. 1707 L Street, N.W. Washington, D.C. 20036 RE: Steel angles and plates for transmission towers Dear Ms. Brickell: The following is in response to your submission of June 20, 1988, requesting a ruling regarding the country of origin of certain imported steel products. FACTS: The materials in question are steel angles and plates used in the fabrication of galvanized steel transmission towers, which are to be imported from China. Possible source countries for the angles and plates are the United States, Canada, member states of the European Community, Korea, Japan and Brazil. The dimensions of the steel angles will range from 35x35x3 mm to 250x250x35 mm. The angles will be in standard material lengths. The steel plates are to be imported into China in coils of standard material widths. The thickness of the coils will vary between 5 mm to 25 mm. After entering China, the angles and plates will proceed through a fabrication process. You state that this process includes the following operations: (1) Selection and testing of steel angles and plates received from the mills to verify quality in accordance with stated specifications. (2) Cleaning of steel angles and plates, primarily through sandblasting. -2- (3) Cutting the materials to size. The angles are cut to specific lengths. The plates are cut to specific shape. (4) Precision drilling and/or punching of all holes in the cut pieces. The holes are to receive the bolts when the components are assembled into a tower. (5) Forming and bending of some pieces as required. (6) Hot dip galvanizing of all fabricated pieces. (7) Application of bichromate solution to protect components during storage and shipment. (8) Complete test assembly of each tower to verify accuracy of fabrication. (9) Disassembly and packaging of components into bundles or cases for export shipment. Upon completion of these operations the angles and plates will, when assembled, form a complete galvanized steel transmission tower. The towers are shipped into the United States unassembled. The size and design of each tower will vary according to its use. ISSUE: What is the country of origin of the unassembled pieces to be shipped to the United States upon completion of the manufacturing process? Is this unassembled tower subject to a Voluntary Restraint Arrangement (VRA)? LAW AND ANALYSIS: The dispositive question regarding the country of origin of the unassembled pieces at the time of entry into the United States is whether the steel pieces have been substantially transformed while in China. Ferrostaal Metal Corp. v. United States, 664 F. Supp. 535, 537 (CIT 1987). If a substantial transformation occurs from the operations performed in China, then China becomes the country of origin for the steel plates and angles. A substantial transformation occurs when the articles "lose their identity as such, and become new articles having...a new name, character, and use..." Koru North America v. United States, 701 F.Supp 229, 234 (CIT 1988), citing United States v. Gibson-Thomson Co., 27 CCPA 267, 270, C.A.D. 98 (1940). See also -3- Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556, 562, 28 S.Ct. 204, 206, 52 L.Ed. 336 (1907). The name, character and use test has been adhered to by the courts. Ferrostaal Metals Corp. v. United States, 664 F.Supp. 535, 538 (CIT 1987), National Juice Products Association et al. v.United States, 682 F. Supp. 678 (CIT 1986), Torrington Co. v. United States, 764 F.2d 1563 (3rd Cir. 1985), Uniroyal, Inc. v. United States, 542 F. Supp. 1026 (CIT 1982). In the present situation, the steel angles and plates arrive in China from source countries. While in China, the articles are cleaned, cut, drilled, formed, hot-dip galvanized, treated with a bichromate solution, assembled into a transmission tower, and then disassembled and packaged. It is the opinion of this office that these operations substantially transform the steel plates and angles. This fabrication process produces a product, an unassembled transmission tower, with a new name, character and use. This substantial transformation results in China becoming the country of origin. At the present time, there are no Voluntary Restraint Arrangement restrictions on the importation of steel transmission towers from China. For the future status of importation from China contact: Nicholas Tolerico, Director Office of Agreements Compliance International Trade Administration Room 7866 Department of Commerce 14th and Constitution Streets, N.W. Washington, D.C. 20230 HOLDING: The operations of cleaning, cutting, drilling, hot-dip galvanizing, treating with a bichromate solution, assembling into a transmission tower, and then disassembling and packaging the transmission tower components constitutes a substantial transformation. The steel plates and angles become a transmission tower with China as the country of origin. Currently, there are no Voluntary Restraint Arrangement restrictions on steel transmission towers imported from China. Sincerely, John Durant, Director Commercial Rulings Division