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HQ 228898

December 10, 2001

228898 RDC


AEI Drawback Services, Inc.
Attn: J.W. Brown
20501 Katy Freeway
Suite 214
Katy, TX 77450

RE: Unused merchandise drawback; Commercial interchangeability; petrochemicals; 19 U.S.C. § 1313(j)(2); Dowper.

Dear Mr. Brown:

This is in response to your July 13, 2000, request, on behalf of your client, the Dow Chemical Company ("Dow"), wherein you requested a prospective ruling under 19 C.F.R. § 191.32(c)(1) on the commercial interchangeability of “various petrochemicals” for purposes of substitution, unused merchandise drawback per 19 U.S.C. § 1313(j)(2). See 19 C.F.R. §191.32.


The Dow Chemical Company (“Dow”) produces, buys, sells, imports and exports various petrochemicals. The imported products are manufactured by Dow affiliates or approved Dow vendors. You state that in all transactions the item number, product name and product description for imported, domestically produced and exported merchandise is identical. An item number, product name, and product description is assigned to each petrochemical product. The item names and numbers are used to identify the merchandise in Dow’s computerized inventory from receipt at Dow to shipment to customers. Thus, you propose to substitute, for drawback purposes, an item number with its corresponding product name and product description for the identical item number.

Your request and the additional submission of June 26, 2001, contained specific information and documentation for item number 59009, Dowper (chemical ingredient Perchloroethylene) to be used as an example of a typical transaction. Therefore, the following facts specific to Dowper are based on your submission. Additional comments and guidance from the Customs Laboratory, information provided by the Halogenated Solvents Industry

Alliance, Inc. and the Dow Chemical webpage (www.dow.com) are also included.

Dowper is a liquid whose chemical ingredient is Perchloroethylene (CAS number 127184), also known as tetrachloroethylene. Perchloroethylene is a member of a family of aliphatic halogenated hydrocarbons. It is a colorless, volatile liquid that is essentially nonflammable and has no measurable flashpoint. Perchloroethylene or perc, is an effective, nonflammable solvent and is the primary solvent used in commercial and industrial dry cleaning.

Included with the documents provided by Dow as evidence of an export transaction is an invoice from Dow Chemical in Michigan to Dow Quimica De Colombia in Bogota, Columbia. This invoice, dated November 24, 1999, shows the sale price for the export and that the Dowper was shipped on November 24, 1999, from Freeport, Texas to Cartagena, Columbia. Also provided is Certificate of Analysis number 339265 dated November 29, 1999, which documents the results of an analysis of the Dowper shipped to Columbia. This analysis shows the Dowper to be 99.991 percent pure by weight.

An invoice dated July 7, 1999, from Dow Deutschland to Dow, Midland, Texas shows the sale price for the imported Dowper. The CF 7501 shows that the imported Dowper was entered on August 3, 1999, under subheading 2903.23.00 (HTSUSA). The Report of Analysis dated August 2, 1999, and prepared by Intertek Testing Services shows that the imported Dowper was analyzed as to purity and specific gravity. The imported Dowper was 99.98 percent pure by weight.

Also included with the documents are Dow’s sales specifications for Dowper which have an effective date of February 22, 2001. These sales specs require Dowper to have a minimum purity of 99.9 percent by weight. The table below shows the sales specifications for Dowper solvent.

Test Requirements
Test Item and Condition
30 Max ppm
ASTM D3401-92
Color, Pt-Co
15 Max

ASTM D2109-93
Non Volatile Residue
10 Max ppm
ASTM D2109-92
Alkalinity (as NaOH)
15030 ppm
ASTM D2106-95
99.900 Min


Whether the imported and domestic petrochemicals are commercially interchangeable for purposes of 19 U.S.C. § 1313(j)(2) when each has the same item number?


Under 19 U.S.C. § 1313(j)(2), as amended, substitution unused merchandise drawback may be granted if there is, with respect to imported duty-paid merchandise, any other merchandise that is commercially interchangeable with the imported merchandise and if the following requirements are met. The other merchandise must be exported or destroyed within 3 years from the date of importation of the imported merchandise. Before the exportation or destruction, the other merchandise may not have been used in the United States and must have been in the possession of the drawback claimant. The party claiming drawback must be either the importer of the imported merchandise or have received from the person who imported and paid any duty due on the imported merchandise a certificate of delivery transferring to that party the imported merchandise, commercially interchangeable merchandise, or any combination thereof. The statute does not define “commercially interchangeable.”

The drawback statute was substantively amended by section 632, title VI - Customs Modernization, Pub. L. No. 103-182, the North American Free Trade Agreement Implementation (NAFTA) Act (107 Stat. 2057), enacted December 8, 1993. Before its amendment by Public Law 103-182, the standard for substitution was fungibility. House Report 103-361, 103d Cong., 1st Sess., 131 (1993) contains language explaining the change from fungibility to commercial interchangeability. According to the House Ways and Means Committee Report, the standard was intended to be made less restrictive, i.e., “the Committee intends to permit substitution of merchandise when it is ‘commercially interchangeable,’ rather than when it is ‘commercially identical’” (the reference to “commercially identical” derives from the definition of fungible merchandise in the Customs Regulations (19 C.F.R. §191.2(i)). The Report, at page 131, also states:

The Committee further intends that in determining whether two articles were commercially interchangeable, the criteria to be considered would include, but not be limited to: Governmental and recognized industry standards, part numbers, tariff classification, and relative values.

Thus, in order to determine whether domestic and imported material of any kind, including Dowper, are commercially interchangeable, an analysis of at least these factors is required: governmental and recognized industry standards, part numbers, tariff classification, and relative values, in addition to any other relevant factors.

In HQ 227553 issued December 22, 1997, in which a requestor proposed, in reference to commercial interchangeability of laboratory chemicals, to substitute "catalog number for catalog number," we held that,

The catalog numbers, which provide a detailed description of the referenced chemical [ ], may be used to satisfy the part numbers criterion if use of these numbers is reflected in a commercial transaction involving the import and export of the chemical in question. We note, however, that the use of the same part numbers for the imported and substituted product does not necessarily lead to a finding that the products are commercially interchangeable--part numbers are only a factor in that determination.

In HQ 227553 we further held that,
we accept the catalog numbers to establish compliance with the part numbers criterion. Thus, imported and substituted chemicals are "commercial interchangeable" when they have the same tariff classification, satisfy the relative values criterion and fall under the same catalog number, but only if the catalog number encompasses only one commercial or industrial chemical grade of that particular chemical. When a chemical is not associated with a chemical grade, it is necessary for Customs to review the chemical's specifications to determine whether they are sufficient to establish commercial interchangeability.

In Dow’s case we note that according to its website, Perchloroethylene for example, has four different grades: Dowper solvent; Dowper LM solvent; Isoform Reforming Grade Perchloroethylene and Isoform Isomerization Grade Perchloroethylene. Thus, per HQ 227553 because the various petrochemicals at issue are not associated with a single grade we have sufficient information for and are able to issue a ruling with regard to Dowper solvent only. This ruling does not apply to “various petrochemicals” as requested but the analysis and the factors considered must be applied to any commercial interchangeability determination.

Governmental and Recognized Industry Standards There is no evidence of governmental standards for Perchloroethylene. Industry consensus standards ensure that all products meeting a standard are used in the same manner, regardless of manufacturer. Under normal circumstances, materials that meet the same industry accepted standard can be used to produce the same products or utilized for the same purposes. These uses are normally stated in the standard. Perchloroethylene is sold commercially under a range of grades, such as purified, technical and USP. Dowper solvent that meets the sales specifications above is the technical grade of Perchloroethylene for use in the dry cleaning industry and meets the industry standard (promulgated by the American Society for Testing and Materials (ASTM)) for a technical or dry-cleaning grade of Perchloroethylene.

Tariff Classification
With respect to the tariff classification, according to the CF 7501 dated August 3, 1999, the imported Dowper is classified as tetrachloroethlyne (perchloroe), subheading 2903.23.00 “unsaturated chlorinated derivatives of acyclic hydrocarbons,” (HTSUS). Dow states that the exported Dowper is also classified under subheading 2903.23.00 (HTSUS). The tariff classification criterion, therefore, has been met.

Part Numbers
Based on the evidence presented in the submission, Dowper is a bulk liquid commodity and is not assigned a part number. However, Dowper is assigned by Dow an item number, i.e., 59009. Item number 59009 Dowper solvent is traded in conformance with the sales specifications listed above. We find that the item number can be used to satisfy the part numbers criterion for Dowper.

Relative Values
Based on the export invoice dated November 24, 1999, and the import invoice dated July 7, 1999, the difference in the price per metric ton at the stated quantities with two months between transactions is negligible. Therefore the imported and domestic Dowper are determined to have the same relative value.

Additional Relevant Factors
The material at issue is identified using a unique trade name, i.e., Dowper. Dowper designates a specific solvent which is a specific grade of Perchloroethylene. The use of a unique trade name to identify this specific solvent, formulated for use in a specific application, indicates that any material bearing this name is the same material. Finally, the Customs laboratory, after reviewing the certificates of analysis submitted and the sales specifications concludes that the imported and domestic material named Dowper is the same commercial product.

After evaluating all the relevant criteria suggested by the legislative history and the additional relevant factors, we find that commercial interchangeability of Dowper has been established because both the imported and domestic Dowper (1) are classifiable as “unsaturated chlorinated derivatives of acyclic hydrocarbons,” under the same HTSUS subheading, 2903.23.00; (2) have the same relative value; (3) have the same unique trade name, i.e., Dowper; (4) have a purity within the range specified by the sales specifications and (5) have the same product description, tetrachloroethlyne (Perchloroethylene).


Based on the above determinations, we conclude that the imported and domestic Dowper are commercially interchangeable for purposes of the substitution, unused merchandise drawback law of 19 U.S.C. §1313(j)(2).

This decision is limited to the specific facts set forth herein. If the terms of the import or export contracts vary from the facts stipulated to herein, this decision shall not be binding on the Customs Service as provided in 19 C.F.R. §177.2(b)(1), (2) and (4) and 177.9(b)(1) and (2).


John Durant

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