Request for a Classification, Country of Origin and Marking Ruling

HQ H018547 December 12, 2007 CLA-2 OT:RR:CTF:TCM H018547 JER CATEGORY: Classification, Country of Origin, Marking TARIFF NO.: 3825.69.00 Michael Theodore Livingston Consulting 300 Meridian Corporate Park 3636 23rd Street, NE Calgary, Alberta T2E 8Z5 Canada RE: Request for a Classification, Country of Origin and Marking Ruling Dear Mr. Theodore: This letter is in response to your request dated September 13, 2007, for a Classification, Country of Origin and Marking Ruling Letter, on behalf of US Ecology Idaho, Inc., under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). This request was made in accordance with Customs and Border Protection (CBP) Regulations Part 177 (19 CFR 177). FACTS: US Ecology Idaho, Inc., a subsidiary of American Ecology Corporation has been subcontracted to import and dispose of approximately 6,700 tons of Depleted Uranium contaminated soil from Kuwait. MKM Engineers, Inc. (MKM) was contracted by the Kuwait Ministry of Defense, to segregate, characterize and repackage the Depleted Uranium contaminated soil for secured disposal in the United States. According to MKM’s report the contaminated soil is the result of a major fire which occurred at the U.S. Army Camp Doha base in 1991. During the Camp Doha fire, U.S. Army Depleted Uranium (DU) munitions known as DU Penetrators or DU tank Penetrators rounds, were burned and the residue thereof seeped into the soil at Camp Doha in Kuwait. After excavating the soil, the waste material was segregated and sifted to remove any remaining DU Penetrator fragments, shrapnel and other large DU contaminated debris. Soil with high levels of radioactive concentration were removed from the subject waste material. According to reports from several federal regulatory bodies, the subject contaminated soil is either in compliance with or exempt from the jurisdiction of federal agencies which govern nuclear and radioactive materials. The maximum radioactivity remaining from the MKM segregation process was 134 pCi/g with an average activity of 10 pCi/g or 0.003% uranium by weight. According to the Department of Transportation (DOT) such low levels of radioactive waste relieve this material from being deemed a “radioactive shipment.” Radioactive materials are DOT exempt where the depleted uranium concentrations are below 27 pCi/g. Likewise, the Environmental Protection Agency (EPA) has determined that the waste material is not considered to be “mixed waste” of the type regulated by the EPA. Similarly, the U.S. Army Joint Munitions Command applied for and received an Approval Letter from the Nuclear Regulatory Commission (NRC) granting a General Import License and exempting this material from a Specific Import License pursuant to 10 C.F.R. §110.27 (c). TAC No. J00807, Approval Letter, NRC (September 13, 2007). In certain situations a Specific Import license is required by the NRC to import radioactive waste. In this case, the NRC determined that the DU contaminated soil was NRC exempt and did not pose an unreasonable risk to public health and safety. Depleted uranium, as distinct from natural or enriched uranium, contains less than 0.711% U-235 or (three times less U-235 than natural uranium) and therefore is 60% less radioactive than natural uranium. The NRC determined that the Camp Doha waste material contains “Unimportant Quantities of Source Material” pursuant to 10 C.F.R. §40.13 (i.e. less than 0.05% uranium by weight). TAC No. J00807, ”Unimportant Quantities, NRC (September 13, 2007). This waste material contains 85% or more sand contaminated by low levels of depleted uranium. According to the MKM’s soil scientist, it is scientifically referred to as “Sandy Soil” rather than sand. The subject contaminated soil shall be imported in 5,200 DOT approved Industrial Package Level-1 (IP-1) containers also referred to as “Super Sacks.” Because of the low concentrations of radioactive material, DOT does not require the IP-1 bags to be placarded with radioactive signage. The waste material is scheduled for disposal at the US Ecology Hazardous and Radioactive Waste Treatment & Disposal Facility in Idaho and is not fit for use or the subject of any further commercial use or resale. ISSUE: Whether the subject material is classified as sand under heading 2505 HTSUS, as a mineral substance under heading 2530, HTSUS, as radioactive material under heading 2844, HTSUS, or as other waste in heading 3825, HTSUS. Also whether the subject material is exempt from country of origin and marking requirements. LAW & ANALYSIS: Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. In light of the fact that this material consists of several components which in addition to the residual concentrations of depleted uranium, include soil and sand, not specifically provided for at the heading level, it cannot be classified solely on the basis of GRI 1. GRI 2 (b) provides that “[a]ny reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances…[t]he classification of goods consisting of more than one material or substance shall be classified according to GRI 3.” GRI 3 (a) provides that when a good is classifiable in two or more headings, for any reason, the heading which provides the most specific description is preferred to headings providing a more general description. However, if each heading refers to only part of the materials or substances contained in the mixed or composite good at issue, then the headings are regarded as equally specific and resort must be made to GRI 3 (b), that is, classification becomes dependent upon the material, substance or component of the good that imparts its essential character. The HTSUS provisions under consideration are as follows: 2505 Natural sands of all kinds, whether or not colored, other than metal bearing sands of chapter 26: 2530 Mineral substances not elsewhere specified or included: 2844 Radioactive chemical elements and radioactive isotopes (including the fissle or fertile chemical elements and isotopes) and their compounds; mixtures and residues containing these products: 2844.30 Uranium depleted in U235 and its compounds; thorium and its compounds; alloys, dispersions (including cermets), ceramic products and mixtures containing uranium depleted in U235, thorium or compounds of these products: 2844.40 Radioactive elements and isotopes and compounds other than those of subheadings 2844.10, 2844.20, 2844.30; alloys, dispersions (including cermets), ceramic products and mixtures containing these elements, isotopes or compounds; radioactive residues 3825 Residual products of the chemical or allied industries, not elsewhere specified or included; municipal waste; sewage sludge; other wastes specified in note 6 to this chapter: 3825.50 Wastes of metal-pickling liquors, hydraulic fluids, brake fluids and anti-freeze fluids Other wastes from the chemical or allied industries: 3825.61.00 Mainly containing organic constituents 3825.69.00 Other 3825.90.00 Other * * * The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80. CLASSIFICATION - Camp Doha DU Contaminated Soil Uranium contaminated soil resulting from various industrial activities, nuclear testing facilities and controlled military operations is a fairly common occurrence. Likewise, the disposal of such waste material often presents itself in both international and domestic arenas. For example, in 2005, the Japan Nuclear Cycle Development Institute sought to import some 290 cubic meters of uranium contaminated soil which resulted from uranium test-drilling into the U.S. for refining and disposal. Also, DU contaminated soil resulting from the controlled military testing of DU Penetrators was the topic of a 1997 NRC decision regarding the U.S. Department of Defense Aberdeen testing facility and its safe remediation of DU contaminated soil. Similarly, military operations involving DU Penetrators resulted in DU contaminated soil in Iraq during the Gulf War. Additionally, Naturally Occurring Radioactive Material (NORM) also referred to as NORM waste is frequently found in geological formations and is brought to the surface during oil and gas drilling activities. Because of the radioactive elements found in NORM, disposal of NORM waste is somewhat similar to the disposal of low-level radioactive waste. At issue here is the disposal of DU contaminated soil resulting from the Camp Doha fire in Kuwait. CBP does not distinguish between DU contaminated soil resulting from an accidental event such as the Camp Doha fire and a purposeful operation such as DU Munitions testing. For purposes of classification, DU contaminated soil is a low-level radioactive waste material which can result from an industrial activity, nuclear reactor operation, DU munitions testing or a DU munitions meltdown. In the case of DU munitions operations, depleted uranium from the DU Penetrators dissolves and becomes embedded into the soil. In either case, the soil becomes contaminated with residual quantities of depleted uranium. Heading 2844, HTSUS, Radioactive Chemical Elements and Radioactive Isotopes and Their Compounds; Mixtures & Residues Containing These Products Because the subject waste material contains low levels of radioactive source materials, one possible classification is in heading 2844, HTSUS, which provides for: “[r]adioactive chemical elements and radioactive isotopes…and their compounds; mixtures and residues containing these products[.]” Heading 2844 lists, among other things, radioactive chemical elements, radioactive isotopes, natural uranium, enriched uranium and depleted uranium, as being radioactive chemical elements and isotopes which are properly classifiable in this heading. Additional U.S. Note 6 (f) to Chapter 28 states in pertinent part that “[h]eading 2844 applies only to: (6) [r]adioactive residues whether or nor usable.” However, the Explanatory Notes of heading 2844, HTSUS, preclude classification of DU contaminated soil in this heading. Explanatory Note (III) (B) states that: [r]adioactive chemical elements fall…in this heading, even when mixed…with non-radioactive materials…, provided that the specific radioactivity of the product is greater than 74 Bq/g (or 0.002µ Ci/g). Although the subject material is a radioactive element mixed with a non-radioactive material (sand and soil), the quantities of source material averages only 10 pCi/g. 10 pCi/g (picogram/cubic picometers) is equal to 0.00001µ Ci/g (microgram/cubic picometers). Hence, the radioactivity is far less than the minimum requirement of heading 2844, HTSUS. Yet certain radioactive compounds are classifiable in this heading even where the radioactivity is below 74 Bq/g. EN (III) (C) to heading 2844, HTSUS, states that: Inorganic or organic [radioactive] compounds, chemically or otherwise constituted of radioactive chemical elements or radioactive isotopes, and solutions thereof, still fall in this heading, even if the specific radioactivity of these compounds or solutions is below 74 Bq/g (0.002 µCi/g). However, regarding mixtures and residues containing radioactive substances or elements, EN (III) (C) to heading 2844 states that: …mixtures [and residues] containing radioactive substances (elements, isotopes or compounds thereof) fall in this heading if their specific radioactivity is greater than 74 Bq/g (0.002 µCi/g). As previously stated, the radioactive residue or mixture of DU contaminated soil contains 0.00001µ Ci/g, over 100 times less than required in heading 2844, HTSUS. Moreover, the Explanatory Notes to heading 2844 suggests that radioactive elements, compounds or the mixtures thereof, are classifiable in this heading where there is some industrial or commercial use other than waste disposal. The subject material is designated for disposal and has no further commercial value. Accordingly, heading 2844, HTSUS, is not applicable to this waste material. Heading 2530, HTSUS, Mineral Substances Not Elsewhere Specified Or Included. Heading 2505, HTSUS, Natural Sands of All Kinds You contend that this DU contaminated soil should be classified in heading 2530, HTSUS, which provides for “mineral substances not elsewhere specified or included.” You argue that the DU contaminated soil is a mixture of sand and other mineral substances and thus could, prima facie, be classified in either heading 2530, HTSUS, or 2505, HTSUS, which provides for “[n]atural sands all kinds, whether or not colored, other than metal-bearing sands of chapter 26.” As such, you assert that pursuant to GRI 3(b), it is the soil not the depleted uranium which imparts the essential character of this material. We disagree. The U.S. Court of International Trade has defined essential character as “that which is indispensable to the structure, core or condition of the article, i.e. what it is.” Structural Industries, Inc. v. United States, 360 F. Supp. 2d 1330, Court of International Trade, 2005. The Court further noted that the component which imparts an article’s essential character is that which is indispensable to performing the article’s primary purpose. Id. Clearly it is the residual quantities of depleted uranium which impart the essential character of this waste material. The primary purpose or objective of this importation is the secured disposal of the DU contaminated waste material at a low-level radioactive waste disposal facility. The waste material is not being imported or disposed of because it is a mineral substance, but rather because the soil is contaminated with low concentrations of radioactive material. Hence it is the residue of spent DU munitions which impart the primary purpose of the material’s importation and disposal. Although scientific methods exist to extract depleted uranium from contaminated soil through a process called “soil washing,” such soil remediation is largely done so to counter offsite disposal costs incurred by the traditional excavation, packaging and burial method of disposal. Thus, it cannot be said that DU contaminated soil offers any further commercial use. This material is beyond the scope of heading 2530, HTSUS, and we find that such waste material cannot be considered a mineral substance as contemplated by Chapter 25. Note 1 to Chapter 25 states in pertinent part that: Except where their context…otherwise requires, the headings of this chapter cover only products which are in their crude state…but not products which have been…obtained by mixing or subjected to processing beyond that mentioned in each heading. First, it cannot be said that the subject contaminated soil is in its crude state or that it has not been obtained by a mixing or further processing. The mere fact that the soil was contaminated by the trace presence of depleted uranium demonstrates that this “sandy soil” is the result of a mixing and/or processing. As such this “sandy soil” is excluded from classification in heading 2505, HTSUS, and heading 2530, HTSUS. Secondly, DU contaminated soil is not ejusdem generis, which means literally, “of the same class or kind,” of the articles enumerated eo nomine in heading 2530, HTSUS. The Explanatory Notes to heading 2530, HTSUS, list several mineral substances which include: (2) Alunite, employed in the manufacture of alum, (7) Pozzolana used in cement manufacturing, (8) Limestone, used in the printing industry, (10) Ores of rare earth, used to extract uranium, (13) Nsutite a manganese ore, used in the metallurgical industry and (14) Natural cryolite, used in the production of aluminum. Of the articles enumerated in heading 2530, HTSUS, each has the capacity for further commercial or industrial use and none are described as being contaminated with any toxic, hazardous or radioactive impurities. It is further argued that because this material contains less than 0.05% uranium by weight that it should be considered a mineral substance rather than be classified according to the presence of depleted uranium. CBP finds such reasoning to be flawed. Although Explanatory Note (D)(6) to heading 2530, covers: [g]arden earth…excavated soil and subsoil, EN (D)(6) also states that such are the types of soil used in agriculture or landscaping. As such, nothing included in the description of the subject waste material or its designated secured disposal, persuades CBP that this DU contaminated soil will be used for any agricultural or landscape purposes as contemplated by EN (D)(6). Heading 3825, HTSUS, Other Waste of the Chemical or Allied Industries In 2001, Presidential Proclamation 7515, issued pursuant to the Omnibus Trade and Competitive Act of 1988, created heading 3825, HTSUS, to cover environmentally sensitive and hazardous waste products. In HQ 967288, dated March 10, 2005, we noted that Chapter 38 was suggested by the U.S. to track certain environmentally sensitive substances important to international trade. Likewise, the 32nd Session of the Harmonized System Committee of the World Customs Organization addressed the Transboundary Movement of Hazardous Wastes and Their Disposal as set forth during the Basel Convention. During the 32nd Session, the committee discussed heading 3825, HS and its coverage of categories of wastes and residual products of the chemical and allied industries. CBP has consistently classified chemically or otherwise contaminated waste material under heading 3825. For example, in NY Ruling Letter R03953, dated June 2, 2006, we classified “oily debris waste,” which among other things included sand contaminated with hydrocarbons, in heading 3825, HTSUS. Likewise, NY B89442, classified hazardous chemical waste material being imported into the U.S. for incineration as other residual products of the chemical and allied industries. We stated in HQ 967288 that the term “residual products” of the chemical and allied industries are not limited to environmentally sensitive wastes which can be remediated into a useful product but also encompasses toxic wastes such as alkaline iron oxide and filter cakes which are usually discarded and disposed of in landfills. CBP has turned to 19 U.S.C. § 1313 (b) concerning distinctions between waste and articles that have been manufactured or produced. Here waste is recognized as something rejected as worthless or not needed, surplus or useless; especially the refuse of a manufacturing or industrial process. In the tariff sense, waste is a term which includes manufactured articles which have become useless for the original purpose for which they were made and fit only for remanufacture into something else. Harley Co. v. United States, 14 Ct. Cust. App. 112, T.D. 41644 (1926). Yet, remanufacture is not an absolute requirement for classification as waste. United States v. Studner, 57 CCPA 122, C.A.D. 990, 427 F. 2d 819 (1970). It also includes refuse, surplus or unsought residuum derived from the original material. (Harley Co., at 112,115). Accordingly, waste falls under