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NY C87410

May 29, 1998

CLA-2-72:RR:NC:1:117 C87410


TARIFF NO.: 7222.20.00

Mr. Steven Pepi
Great Lakes Customs Brokerage, Inc.
P.O. Box 740
Buffalo, NY 14213-0740

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of stainless steel bar from Canada; Article 509

Dear Mr. Pepi:

In your letter dated March 30, 1998 on behalf of Indwisco Limited, you requested a ruling on the status of cold-drawn stainless steel round bar from Canada under the NAFTA.

Hot-rolled stainless steel wire rod in coils is produced in Sweden, France, Korea and Taiwan and imported into Canada. Stainless steel wire rod is classified under heading 7221, Harmonized Tariff Schedule of the United States (HTSUS). In Canada, the wire rod is cold drawn, straightened and cut to length. In a supplemental memo, you provided diameter sizes of the hot-rolled wire rod imported into Canada, along with diameter sizes of the cold-drawn bars. For example, wire rod measuring 7 mm (0.275 inch) in diameter is drawn into bars measuring from 0.231 - 0.265 inch in diameter; rod measuring 9 mm (0.354 inch) in diameter is drawn into bars measuring 0.306 - 0.345 inch in diameter. The rod is typically drawn once through the die to get the finished diameter. You indicate that sometimes the rod may require drawing through the die 2 or 3 times. You state that the rods are not heat treated or annealed in Canada. A single pass through the die results in a cross-sectional area reduction of approximately 15 to 20 percent. As a result of the cold-drawing process, a typical increase in tensile strength would be from 85,000 psi to 105,400 psi.

The cold-drawn stainless steel cut-to-length bar which is imported into the United States is classified under HTSUS heading 7222.

The non-originating hot-rolled wire rod which is processed into cold-drawn bar in Canada does not qualify for preferential duty treatment under the NAFTA because it does not undergo the change in tariff classification required by General Note

With regard to the country of origin marking requirements for the imported bars, the Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. Section 102.11 of the regulations sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) does not apply in this case because the good is not wholly obtained or produced in any one country, the good is not produced exclusively from domestic materials, and it doesn't undergo the applicable tariff classification set out in Section 102.20. Section 102.11(b) states that except for a good which is described or classified as a set, where the country of origin cannot be determined under paragraph (a), the country of origin of the good (1) Is the country...of the single material that imparts the essential character of the good.

Based on a number of administrative rulings which have addressed the issue of determining the essential character of cold-drawn bars produced from hot-rolled wire rods, the material which imparts the essential character of the good is the hot-rolled wire rod. Attached is a synopsis of the relevant rulings. The country of origin for marking purposes is the country of origin of the hot-rolled wire rods.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Paula Ilardi at 212-466-5476.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.


Robert B. Swierupski

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