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HQ 084776

September 21, 1989

CLA-2 CO:R:CV:G: 084776 JLV


TARIFF NO.: 7219.21.00; 7219.22.00

Mr. Serge Vinograd
Charleroi (USA)
88 Danbury Road
Wilton, Connecticut 06897

RE: Austenitic stainless steel plate; further processed

Dear Mr. Vinograd:

In a letter of May 15, 1989, you requested a ruling on the classification, appraised value, and quota status for stainless steel plate manufactured in Belgium from stainless steel slabs that were produced in the United States.


The merchandise is described by you as steel "plates" having a chemical composition or quality within the requirements of ASTM 240 T-304L and ASTM 240 T-316L. In percent by weight, type 304L has a chromium content of 18.00 to 20.00 and a nickel content of 8.00 to 12.00; type 316L, on the other hand, has a chromium content of 16.00 to 18.00, a nickel content of 10.00 to 14.00, and a molybdenum content of 2.00 to 3.00. Both steels also consist of the following elements (percent by weight):

0.030 carbon
2.00 manganese
0.045 phosphorus
0.030 sulfur
0.75 silicon
0.10 maximum other

The sizes will vary in thickness from 3/16 inch (4.7625 mm) to 1.5 inches (38.1 mm), in width from 60 inches (1524 mm) to 100 inches (2540 mm), and in length from 180 inches (4572 mm) to 480 inches (12,192 mm).

The plates will be manufactured in Belgium from hot rolled slabs produced in the United States. The processing in Belgium will involve the following: heating, hot rolling, annealing, and pickling. After cutting to size, the cut lengths will be exported to the United States.

After importation into the United States, the plates will be marketed to various users of stainless steel plate, such as fabricators of tanks for petrochemical applications.


What is the tariff classification of the steel products, and what is the basis for determining the dutiable value? Is the steel subject to any quantitative limitations?


Note 1(e), chapter 72, defines stainless steel as "alloy steels containing, by weight 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements." Note 1(k), chapter 72, defines flat-rolled products, in pertinent part, as "[r]olled products of solid rectangular (other than square) cross section * * * in the form of * * * straight lengths, which * * * if of a thickness of 4.75 mm or more are of a width which exceeds 150 mm and measures at least twice the thickness." The plates in issue fall within these definitions.

Articles of heading 7219 are described as flat-rolled products of stainless steel, of a width of 600 mm or more. Annealing and pickling of the stainless steel plates does not make them "further worked" as the term is used in the subheadings to heading 7219. See additional U.S. note 2, chapter 72, which defines the term (unless the context provides otherwise) for purposes of chapter 72 as relating to certain surface treatments.

The steel products are hot-rolled stainless steel plates in straight lengths which have not been further worked. Depending on the thickness, these products are classified in subheading 7219.21.00 or 7219.22.00, Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

Certain alloy steel products, including flat-rolled stainless steel of the type in issue, are subject to additional duties and quantitative limitations. Note 4,
subchapter III, chapter 99, HTSUSA, defines the steel that is subject to these duties or limitations. Note 4(a)(ix) states that "[t]he term 'stainless steel of the type described in U.S. note 4(e)(ix) to this subchapter' refers to stainless steel which contains by weight less than 1 percent carbon and over 11.5 percent chromium." Subheading 9903.72.01 describes the type of stainless steel plates in issue, but specifically excludes products of the European Communities from the additional duties under that subheading. Note 4(g)(i), subchapter III, chapter 99.

Subject to certain exceptions, stainless steel articles classified in subheadings 7219.21.00 and 7219.22.00, if products of Belgium, are subject to a Voluntary Restraint Agreement (VRA) on steel. Therefore, the plates may be subject to VRA export certification requirements.

Effective January 1, 1989, the HTSUSA superseded and replaced the Tariff Schedules of the United States (TSUS). Item 806.30, TSUS, was carried over into the HTSUSA without change as subheading 9802.00.60. The applicability of this subheading may affect both the VRA status and the dutiable value of the stainless steel plates.

For purpose of the VRA, because the U.S. slab is within a category of VRA steel (i.e., semifinished products in subheading 7218.90.00), plates processed in Belgium from the slab and returned to the United States under subheading 9802.00.60, HTSUSA, would not be subject to the VRA requirements.

The provision also allows a partial duty exemption. In order to benefit from the partial duty exemption and to be allowed entry without regard for the VRA requirments, the plates must satisfy these statutory criteria:

Any 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 pro- cessing, and if the exported article as processed outside the United States, or the article which results from the processing outside the United Staes, is returned to the United States for further processing.

Subheading 9802.00.60 imposes a dual "further processing" requirement on metal articles--one foreign, and when returned, one domestic. Metal articles satisfying these statutory requirements may be entered under subheading 9802.00.60 with duty only on the value of such processing performed outside the United States, upon compliance with section 10.9, Customs Regulations (19 CFR 10.9).

We have previously held that for purposes of item 806.30, TSUS, the term "further processing" has reference to processing that changes the shape of the metal or imparts new and different characteristics which become an integral part of the metal itself and which did not exist in the metal before processing. Thus, further processing includes machining, grinding, drilling, threading, punching, forming, plating, and the like, but does not include painting or the mere assembly of finished parts by bolting, welding, etc. C.S.D. 84-49, 18 Cust.Bull. 957 (1983).

In the present case, although the foreign processing of steel slabs into steel plates clearly changes the shape of the metal and constitutes "further processing" within the ambit of the statute, there are no facts in the file which describe the type of processing, to be performed on the returned plates, which would satisfy the second "further processing" requirement of subheading 9802.00.60, HTSUSA. In the absence of this information, we cannot determine the applicability of subheading 9802.00.60; therefore, the plates will be dutiable on their full value when imported into the United States.

We note, for your information, that the meaning of the term "further processing" was discussed in a ruling of September 6, 1989 (file 554965), copy enclosed. To the extent that you believe the criteria in that ruling apply to your products, then you may seek a ruling on the question as to whether the stainless steel plates are further processed in the United States.


The stainless steel plates are classified as flat-rolled products of stainless steel, of a width of 600 mm or more, not further worked than hot-rolled, not in coils, in subheading 7219.21.0000 or 7219.22.0000, HTSUSA, depending on the thickness of the plates when imported.

We do not have sufficient information to rule that the plates are subject to "further processing" in the United States within the meaning of subheading 9802.00.60, HTSUSA. Therefore, the stainless steel plates are subject to the VRA export certification requirements and are subject to duty on their full value.


John Durant, Director

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