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 > 1993 HQ Rulings > HQ 0224025 - HQ 0450288 > HQ 0224187

Previous Ruling Next Ruling

HQ 224187

February 23, 1993

CON-9-04/9-12-CO:R:C:E DH


John S. Rode, Esq.
Rode & Qualey
295 Madison Avenue
New York, N.Y. 10017

RE: Temporary importation under bond (TIB) for processing of uranium hexafluoride; Temporary importation under bond for containers for compressed gases; Subheading 9813.00.05, HTSUS; Subheading 9813.00.45, HTSUS; Application of antidumping duties to TIB entries; Utilization of FIFO accounting method for commingled fungible merchandise to cancel the TIB

Dear Mr. Rode:

This is in response to your letter of September 10, 1992, regarding the application of: subheading 9813.00.05, of the Harmonized Tariff Schedule of the United States (HTSUS), to uranium hexafluoride imported for processing in the U.S.; subheading 9813.00.45, HTSUS, to containers used to import this merchandise; the application of dumping duties to the bond covering the temporary importations and the FIFO procedures to satisfy the TIB exportation requirement.


The Nuclear Division of Siemens Power Corporation (importer) has in the past imported, as a consumption entry, uranium hexafluoride for conversion into uranium oxide nuclear fuel pellets. The pellets are exported to the importer's foreign affiliate for fabrication into fuel assemblies and delivery to the customer abroad.

On June 3, 1992, the Department of Commerce published a preliminary determination of sales at less than fair value for uranium from Kazakhstan, et al., 57 Fed. Reg. 23380, et seq.. This finding will affect the importation of uranium hexafluoride from several customers of the importer. Therefore, as a means of avoiding the deposit of cash to cover the estimated dumping margins from these customers, you request, on behalf of the importer, treatment under the TIB provisions.

You have provided the following explanation of the procedures for retaining inventory and processing the uranium hexafluoride. Cylinders, each containing approximately 1500 kg. of uranium hexafluoride in the form of a compressed gas are imported and delivered to be processed in accordance with the terms of the Nuclear Regulatory Commission License Number SNM- 1227, to the Richland, Washington, facility. The receipt, storage, and processing of the uranium hexafluoride, the intermediate materials produced during the processing of the hexafluoride and the finished uranium oxide in pellet form, are strictly controlled to comply with the requirements of the Nuclear Regulatory Commission.

Upon arrival of the imported uranium hexafluoride, the uranium hexafluoride is inspected, the cylinder weights and serial numbers as well as the enrichment levels of the uranium hexafluoride are verified and compared with the shipping documents and the results are recorded on DOE/NRC Form 741 and filed with the NRC. The cylinders are stored until time of processing.

The uranium hexafluoride is changed into its final form by a wet "ADU" process, in which the uranium hexafluoride is contacted with water to form uranyl fluoride, reacted with ammonium hydroxide to produce ammonium diuranate (ADU) crystals, centrifuged, dried to remove liquids, and calcinated in an hydrogen-nitrogen-steam atmosphere to convert the ADU solids to uranium oxide in the form of a dry powder.

Following the calcination operation, the uranium oxide powder produced from the imported uranium hexafluoride gas is blended with approximately 20% uranium oxide from the importer's working stock. The uranium oxide powder drawn from the working stock is fungible with the uranium oxide powder derived from the imported uranium hexafluoride with which it is blended, particularly with respect to the level of enrichment. The blending operation results in the commingling of the import- based uranium oxide with the uranium oxide from the client's working stock.

After blending, the uranium oxide powder is milled to the requisite granulation and transferred to a powder storage facility, from which the powder is withdrawn for pressing into pellets, and sintering. After sintering, the pellets are ground to precise outside diameter, inspected, and packaged for shipment to the importer's foreign affiliate.

The addition of the uranium oxide powder from the importer's working stock prior to the production of the uranium oxide pellets is necessary to ensure that the total number of pellets, which meet the requisite specifications at the conclusion of the manufacturing operations of the batch, is sufficient to account for the total quantity of uranium, at the same level of enrichment, that was contained in the cylinder of uranium hexafluoride supplied by that customer, as well as, to provide for any loss which might occur during processing the uranium oxide powder into pellets, the transportation from the U.S. and processing at the importer's foreign affiliate. The residue from cleaning the cylinders and the uranium from the damaged pellets will be returned to the working stock and therefore, not exported.


Whether the imported uranium fluoride and the processing it undergoes in the U.S. qualify for temporary importation under subheading 9813.00.05, HTSUS?

Whether the imported cylinders qualify for temporary importation under subheading 9813.00.45, HTSUS?

Are antidumping duties charged to the bond covering merchandise entered under a TIB?

Can the TIBs be cancelled on a First-In-First-Out (FIFO) basis upon exportation of the finished product when a portion of the finished product is manufactured from commingled merchandise?


All merchandise imported into the United States is subject to duty unless specifically exempted therefrom. Subheading 9813.00.05, HTSUS, provides for duty-free entry, under bond, for merchandise imported into the United States for a temporary period for the purpose of repair, alteration, or processing. The latter may include processing that transforms an article into one that is considered manufactured or produced in the United States. The provision requires that the imported merchandise be exported or destroyed within one year of the date of importation. This period may be extended for one or more periods which, when added to the initial one year, do not exceed a total of three years. In order to qualify for this duty-free treatment, merchandise cannot be imported for the purpose of sale (or sale on approval).

From the extensive description of the operation, there is no doubt that the uranium hexafluoride is manufactured, in the U.S., into a new and different article of commerce (the uranium oxide pellets) as required for TIB treatment. Additionally, an outline has been provided of the inventory system and accounting system, employed by the importer, for each cylinder and its contents from the time of importation, through processing, to exportation. Specific documentation of these matters is an essential requirement of qualifying for TIB treatment. As stated in U.S. Note 2(b) of Subchapter XIII (Chapter XIII, HTSUS). Any processing that amounts to a manufacture or production of articles must include an accounting for all articles, wastes, or irrecoverable losses resulting from the processing. All such articles and valuable wastes shall be exported or destroyed under Customs supervision within the bond period; alternatively, duties may be paid on valuable wastes at the rate applicable to such wastes at the time of importation of the entered merchandise.

Additionally, you have inquired about the application of subheading 9813.00.45, HTSUS, to the cylinders used to import the uranium hexafluoride gas to the U.S. This section provides for the temporary importation under bond for containers for compressed gases, filled or empty, and containers or other articles in use for covering or holding merchandise ... during transportation and suitable for reuse for that purpose.

The cylinders will be used to transport the uranium hexafluoride gas to the importer's facility in the U.S. Once the gas is emptied, the container will be cleaned, prepared for re- use for future transportation of compressed gases and exported to the foreign owner. Upon compliance with all other required provisions, found in 19 CFR 10.31-10.40, temporary importation would be permitted under subheading 9813.00.45, HTSUS.

In addition to qualification for TIB entry, you have raised the question, as to whether or not the uranium hexafluoride in question can be imported without payment of the applicable antidumping duties.

Antidumping duties are to be charged against the TIB bond and do not have to be deposited at the time of entry. This is so because TIB entries are not considered consumption entries for TIB purposes (see HRL 223491, dated March 30, 1992). The bond requirements and the basis of computation of the amount of a temporary importation bond may be found in section 10.31(f) of the Customs Regulations (19 CFR 10.31(f)) and sections 141.90 and 141.103 of the Customs Regulations (19 CFR 141.90 and 19 CFR 141.103).

Finally, you have requested to cancel the bonds filed for the uranium hexafluoride contained in each cylinder on a FIFO basis since a portion of the finished uranium oxide fuel pellets to be exported will be processed from blending uranium oxide powder derived from the imported uranium hexafluoride from the imported cylinder and fungible uranium oxide powder from the working stock. Under this procedure, the working stock will be accounted for last.

The Customs Service has interpreted the temporary importation under bond provisions as usually requiring direct identification of each particular article to show timely exportation. However, the Customs Service has granted exceptions to the policy of requiring direct identification of each individual article covered by a TIB entry when direct identification of the imported merchandise was inconceivable because the physical identity of the imported merchandise and the ability to directly account for the imported merchandise was lost due to commingling. The FIFO method has been employed by the Customs service as an one such exception. (See C.S.D. 84-12, where raw sugar was imported under item 864.05, TSUS (presently subheading 9813.00.05, HTSUS), commingled with fungible imported and domestic raw sugar, under FIFO procedures, refined and exported within the TIB period and U.S.D.A. regulations. See also C.S.D. 86-16, where TIBs were permitted to be cancelled on a FIFO basis when fungible merchandise entered for consumption and merchandise entered under a TIB, under item 864.05 TSUS (presently subheading 9813.00.05, HTSUS), were commingled and sufficient merchandise was maintained in the commingled merchandise to cancel all outstanding TIBs.)

Under the present circumstances, uranium oxide powder is manufactured with all of the imported uranium hexaflouride. The imported uranium oxide powder is blended with an extra 20% of the uranium oxide powder from the working stock preventing any means of physically distinguishing between the two products. The ability to account for the imported product, however, still exists. An accurate accounting of the ownership and contents of each imported cylinder is kept throughout the production of the imported product. Only after the damaged pellets (which may be few or none) are removed from the pellets to be exported is there any uncertainty as to the amount of imported uranium which is to be exported. The imported uranium and the exported uranium, therefore, may be directly identified, preventing the application of any other accounting method.

The uranium contained in the damaged pellets which remain in the U.S. may prevent the utilization of the duty-free entry under the temporary importation provisions unless this uranium is characterized as valuable waste, the importer provides an accounting and duty is paid on the valuable waste, at the rate applicable at the time of importation. See U.S. Note 2(b) of Subchapter XIII.

The characterization of material resulting from the manufacture of a product as either waste or a by-product, for TIB purposes, has been discussed in detail in C.S.D. 83-5, C.S.D. 84- 40, C.S.D. 79-419, C.S.D. 82-109 and C.S.D. 81-224. In C.S.D. 83-5, we adopted the consideration of several elements used to determine the existence of a by-product or waste for drawback purposes. These elements are:
1. The nature of the material of which the residue is composed.
2. The value of the residue as compared to the value of the principal product and the raw material. 3. The use to which it is put.
4. Its status under the tariff law, if imported. 5. Whether it is a commodity recognized in commerce. 6. Whether it must be subjected to some process to make it saleable.

The nature of the rejected pellets differs from the good pellets in that they are no longer suitable for its original purpose (to be used in fuel assemblies). The damaged pellets retain only a scrap value and retain no commercially marketable value. No further processing is required to make them scrap, however, additional processing is necessary to make them useful as working stock. The identity, characteristics, and classification differ. We are satisfied that the rejected pellets are valuable waste within the intendment of Note 2(b) of Subchapter XIII.


The operation in question, as applied to the imported uranium hexafluoride, qualifies as "processing" under subheading 9813.00.05, HTSUS, and therefore, can be entered under the TIB procedures. The importer must meet all of the accountability requirements under the U.S. Notes of Subchapter XIII to the satisfaction of the District Director.

Entry is, additionally, permitted under the TIB procedures for the cylinders, under 9813.00.45, HTSUS.

The entries of the uranium hexafluoride under the TIB procedures which are subject to the antidumping duty are not considered consumption entries. In the case of such TIB entries, the TIB bond should be set in an amount to take into account the antidumping duty in order to protect the revenue.

Finally, the bond for the temporary importations may only be cancelled upon an accounting of all the pellets derived from the processing and the valuable waste resulting from the processing and the payment of the appropriate duties for the valuable waste.


John Durant, Director

Previous Ruling Next Ruling

See also: