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HQ 084048

July 19, 1989

CLA-2 CO:R:C:G 084048 VEA


TARIFF NO.: 3926.90.90

Allen E. Smith
Allen E. Smith and Associates
470 McAllen National Bank
McAllen, Texas 78503

RE: Modular insulating wall panels

Dear Mr. Smith:

Your memorandum of March 21, 1989, requests reconsideration on behalf of your client, Murray Drywall & Insulation of Texas, Inc., of a New York ruling dated December 13, 1988 (File # 833467), which classified modular wall panels imported from Mexico, in subheading 7308.90.9090 under the Harmonized Tariff Schedule of the United States (HTSUSA).


The merchandise consists of a modular wall panel made of U.S. components, which are exported to Mexico and assembled into panels. The panels comprise several parts: metal stud frames, a gypsum core covered with an asphalt-impregnated paper exterior sheathing, polystyrene board, fiberglass mesh and an overlay of synthetic resin. The steel studs provide a frame for the panel, and the gypsum sheathing serves as a foundation for the expanded polystyrene board, which functions as the insulating material. The polystyrene, fiberglass, and synthetic resin can also be applied to other surfaces, such as existing walls of concrete (poured in place or precast), concrete block, brick, and wood. The fiberglass mesh ties the surface of the panel together, protects the polystyrene board and gypsum substrate, prevents surface cracks, provides impact resistance, and reinforces the panel.

The gypsum sheathing weighs 200 pounds, or one-half of a 100 square foot panel's total weight. It is valued at $19.00, out of $164.29, the total value of the panel. The steel studs constitute 27% of the article's weight and provide 30% of its value. The plastics components, fiberglass, and gypsum board provide 70% of the panel's value.

The following steps are involved in assembling the panel:

1. The metal studs are mechanically fastened or welded together to form a frame.

2. The gypsum core is screwed or fastened to the stud frame.

3. An expanded polystyrene board is glued to the gypsum sheeting with glue made of latex modified portland cement.

4. Reinforcing fiberglass mesh is bonded to the styrofoam with the same glue used in step 3.

5. An overlay of synthetic resin, consisting of aggregated acrylic polymer is spread onto the wallboard with a trowel.

Descriptive literature submitted with the ruling request states that these panels are used for interior or exterior building wall construction. Exterior insulation reduces thermal shock on a structure, stresses caused by the variations in temperature on the building between the low winter temperatures and the high summer temperatures. These prefabricated panels are not structural panels.

Our New York office classified these panels as structures and parts of structures of iron or steel in subheading 7308.90.90. The importer disagrees with this classification and argues that they should be classified in heading 3925 as builders' ware of plastics. The importer notes that under GRI 3(b) of the HTSUSA, these panels are not classified in heading 7308 since the plastic components give them their essential character. The steel studs provide structural support for the panel, but according to the importer, are unnecessary to its main function, which is insulation. These studs could be made of another material, such as wood, aluminum, concrete, or any other rigid substance. The plastics components can also be attached to an existing structure of wood, concrete, metal or as in this case, gypsum sheathing.


Whether the modular wall panels are properly classified as builders' ware of plastics in heading 3925, as structures or parts of structures of iron or steel in heading 7308, as articles of plaster or of compositions based on plaster in heading 6809, or as other articles of plastics and articles of other materials of headings 3901 to 3914 in heading 3926 under the HTSUSA.


The General Rules of Interpertation (GRI's), the legal principles by which merchandise is classified, govern classification under the HTSUSA. According to GRI 1, the primary consideration in determining whether merchandise should be classified in a heading should be given to the language of the heading and to any relevant chapter or section notes. The headings at issue in this case include:

3925 Builders' ware of plastics, not elsewhere specified or included:

3926 Other articles of plastics and articles of other materials of headings 3901 to 3914:

7308 Structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, balustrades, pillars and columns) of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, or iron or steel:

6809 Articles of plaster or of compositions based on plaster:

Based on the language of the headings, the modular wall panels can be prima facie classified in four headings, 3925, 3926, 6809, and 7308. They are composed of three primary components, plastics, steel and plaster (gypsum core). According to GRI 2, goods consisting of more than one material or substance shall be classified according to the principles of GRI 3. GRI 3 (b) states that mixtures and composite goods consisting of different materials, or made up of different components, shall be classified as if they consisted of the material or component which gives them their essential character. The factor that determines the essential character of an article varies between the different kinds of article. It may be the nature of the material or component, its weight, value, bulk, or quantity, or its role in relation to the use of the goods.

The panels in this case consist of five parts, a metal stud frame, gypsum core covered with asphalt-impregnated paper, polystyrene board, reinforcing fiberglass mesh and an overlay of synthetic resin consisting of acrylic polymer. Three of these parts have plastics components (polystyrene board, resin, and the latex portland cement glue). Thus, the plastics components provide a larger quantity of the materials in the product. In addition, the role that they play in relation to the use of the panel suggest that they give the panels their essential character. The plastics components provide the interior or exterior surface of the panels and give them their outward appearance. In addition, they are crucial to the panel's main purpose, which is to provide insulation. The panels cannot perform this function without these components.

The steel studs and gypsum core provide the structural support and a foundation for the prefabricated panels; however, they are not crucial to their main purpose. The plastics insulating materials can be used without the steel studs, as long as there is a rigid surface to attach them to. In this case, the gypsum core serves as the surface, but other surfaces such as concrete block, brick, and wood can be used. Finally, the steel studs make up only 27% of the panel's weight. Although the gypsum core provides half of the panel's weight, it comprises only a small percentage of its total cost.

Headquarters has ruled on a similar article in an earlier decision. In a ruling dated May 2, 1989 (File # 083331), we ruled that insulated composite panels were classified as parts of structures in heading 7308. These panels consisted of two steel sheets, which formed the interior and the exterior surface of the panel; a plastic foam center; and a special joint and clamp, also made of steel. The steel components were held to give the panels their essential character.

The panels in this case are distinguishable from those in the ruling dated May 2nd. In that case, the steel sheets formed both the exterior and interior walls of panels, gave the panels their outward appearance, and provided the bulk of the article. The plastics components perform this role in the case at issue. Thus, under these facts, the plastics components give the panels their essential character.

Based on the language of the heading, the panels cannot be classified in heading 3925. Although these panels are used in walls, they are not structural elements and do not meet the requirements of chapter note 11(b) to chapter 39 for classification in that chapter. Based on the language of the heading, the panels are classified in heading 3926, which provides for other articles of plastics. The Explanatory Notes for this chapter state that this heading covers articles, not elsewhere specified or included, of plastics or of other materials of headings 39.01 to 39.14. We have established that these panels are articles of plastics, and they are not provided for in any other heading.


The modular wall panels are properly classified as other articles of plastics and articles of other materials of headings 3901 to 3914 in heading 3926, subheading 3926.90.90.


John Durant, Director

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