United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0951335 - HQ 0951571 > HQ 0951473

Previous Ruling Next Ruling

HQ 951473

April 24, 1992

CLA-2 CO:R:C:M 951473 DWS


TARIFF NO.: Not Applicable

Ms. Sandra Liss Friedman
Barnes, Richardson & Colburn
475 Park Avenue South
New York, NY 10016

RE: Cold-Rolled Steel Sheet; Hot-Dip Galvanizing; Annealing; Passivation; Substantial Transformation; Country of Origin; Ferrostaal Metals Corp. v. U.S.

Dear Ms. Friedman:

This is in response to your letter of March 30, 1992, concerning the country of origin of certain cold-rolled steel sheet under the Harmonized Tariff Schedule of the United States (HTSUS).


The subject merchandise consists of cold-rolled steel sheet, manufactured in Italy. After the steel sheet is created, it undergoes processing in Tunisia. Once in Tunisia, the steel sheet is annealed, hot-dipped galvanized, and then painted with a de-oxidizing mixture (passivation), creating rust resistant properties within the steel sheet.

Before processing in Tunisia, the steel sheet has the common commercial specification of American Society for Testing Materials (ASTM) A-366. After processing, the steel sheet has the common commercial specification of ASTM A-527. The processing in Tunisia increases the value of the steel sheet by approximately 30 percent.


What is the country of origin of the subject cold-rolled steel sheet?


"Country of origin" is defined in 19 CFR 134.1(b) as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part."

"The essence . . . is that a product cannot be said to originate in the country of exportation if it is not manufactured there. The question, therefore, is whether operations performed on products in the country of exportation are of such a substantial nature to justify the conclusion that the resulting product is a manufacture of that country. 'Manufacture' implies a change, but every change is not manufacture . . . There must be transformation; a new and different article must emerge, 'having a distinctive name, character or use'." Ferrostaal Metals Corp. v. United States, 11 CIT 470, 473 (1987).

Ferrostaal Metals Corp. dealt with steel sheet which had been annealed and galvanized in New Zealand by a process known as "continuous hot-dip galvanizing" using full hard cold-rolled steel sheet from Japan.

The court in Ferrostaal Metals Corp. stated that "[w]hether galvanizing and annealing change the character of the merchandise depends on the nature of these operations and their effect on the properties of the materials. . . . The Court finds that the annealing and galvanizing processes result in a change in character by significantly altering the mechanical properties and chemical composition of the steel sheet."

It is claimed that the hot-dip galvanizing process performed in Tunisia "also changes the character of the product by imparting a zinc coating that alters the mechanical properties and chemical composition of the steel sheet and provides corrosion resistance."

From the information provided us, the processing of the cold-rolled steel sheet in Tunisia, involving both annealing and hot-dip galvanizing, is very similar to the processing in Ferrostaal Metals Corp.. It is our position that, after processing in Tunisia, a substantial transformation of the merchandise has taken place. A new and different article having a distinctive name, character, or use does emerge. This is noted by the change in the ASTM of the material.


Following the reasoning in Ferrostaal Metals Corp., it is our position that a substantial transformation has occurred, and the country of origin of the cold-rolled steel sheet is Tunisia.


John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling