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HQ 087869

DEC 7 1990

CLA-2:CO:R:C:G 087869 JAS


TARIFF NO.: 7312.10.0500

L. H. Skoropat
Canadian Wire Products
989 Price Road
Parksville, B.C. V9P 2C9

RE: Commercial Trolling Line on Reels; Stranded Wire Fitted With Fittings; Fishing Line Processed in Canada from Stainless Steel Stranded Wire of Korean Origin; Substantial Transformation

Dear Mr. Skoropat:

In your letter of May 23, 1990, supplemented on June 27, 1990, you inquire as to the tariff status of commercial trolling line processed in Canada from stranded wire from the Republic of Korea (ROK). Samples were submitted. Our ruling follows.


The product entering Canada from the ROK is 1/16 in. diameter 1 x 7 stainless steel type 304 strand in 10,800 ft. reels. In Canada, you respool the strand onto 3,600 ft. reels then crimp on brass marks in twos, at regular intervals. Their purpose is to keep leadered fishing hooks properly spaced and to prevent sliding and bunching. These are marks made in Canada on a screw machine lathe which you furnace anneal at 1000 degrees F to soften them and increase their formability. They are then dipped in nitric acid to remove black scale and rinsed. This imparts their bright finish. After crimping on the marks, the line is wound onto 10 in. diameter wooden spools in 300, 450, 600 and 900 ft. lengths as the customer desires. This is the condition of the fishing line as imported. The spools themselves are made in your shop from 1/4 in. hardboard and 1 1/2 in. cedar planks both of Canadian origin. After importation, the leadered hooks are attached and the line payed out on power winches aboard commercial salmon fishing boats either in entire lengths or cut-to-length.


Whether the merchandise is a product of Canada for tariff purposes.


Merchandise is classifiable under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

Heading 7312 covers stranded wire, ropes, cables, plaited bands, slings and the like, of iron or steel, not electrically insulated. The Explanatory Notes provide a commentary on the scope of each heading to the HTS and are useful in ascertaining the classification of goods under the HTS. Relevant notes indicate heading 7312 includes wire and ropes fitted with hooks, spring hooks, swivels, rings, thimbles, clips, sockets, etc., or made up into single or multiple slings, strops, etc. Goods of heading 7312 are used, among other things, for hoisting, hauling or towing, as rigging or guying for masts, pylons, etc. The brass marks facilitate the lifting function which the fishing line performs and are therefore "fittings" of a like kind to the examples enumerated in the notes. Under the authority of GRI 1, the fishing line in issue here is provided for in heading 7312. Actual classification is is subheading 7312.10.0500, HTSUSA, stranded wire of stainless steel, fitted with fittings or made up into articles.

The fishing line entering the Customs territory is not eligible for a reduced rate of duty under the United States- Canada Free-Trade Agreement Implementation Act of 1988 (USCFTA). This is because "goods originating in the territory of Canada" means those that have been transformed in the territory of Canada so as to be subject to a change in tariff classification from one HTS heading to another such heading. Both the stranded wire from Korea and the wire with brass marks would be classified in appropriate subheadings of heading 7312.

In order for the stranded wire of Korean origin to be considered a product of Canada for purposes of the steel arrangements, a substantial transformation must occur in Canada. The processing in Canada must result in a product
other than or materially different from the product entering Canada. That is, a new and different article of commerce must emerge from Canada, one having a new name, character or use. In our opinion, no significant or material change in character or use results from the processing of the Korean wire in Canada. The physical properties of the stranded wire remain unchanged by the addition of the brass marks. The processing in Canada merely narrows the use of the stranded wire but does not give it a new use for which the wire was previously unsuited. We conclude that the identity of the stranded wire that enters Canada remains fundamentally unchanged and is the very essence of the fishing line that enters the Customs territory. The fishing line entering the Customs territory is therefore a product of the Republic of Korea for steel arrangement purposes.

Goods from the Republic of Korea classifiable in heading 7312 do not appear covered by applicable steel arrangements. However, you may confirm this by writing to the Office of Agreements Compliance, International Trade Administration, Department of Commerce, Washington, D.C. 20230.


The commercial trolling line is classified in subheading 7312.10.05000, HTSUSA, for the reasons stated. The rate of duty is 5.7 percent ad valorem. It is not an originating good for USCFTA purposes. For purposes of the steel arrangements, the trolling line is considered a product of the Republic of Korea.


John Durant, Director
Commercial Rulings Division

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