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NY J84680

June 23, 2003

CLA-2-44:RR:NC:2:230 J84680


TARIFF NO.: 4407.10.0002

Mr. Mike Daly
Livingston International Trade Services, Inc. 100 Walnut Street
Champlain, NY 12919

RE: The tariff classification of “used wood railway ties” from Canada

Dear Mr. Daly:

In your letter dated May 9, 2003, you have submitted additional information regarding a tariff classification ruling on behalf of Canadian Pacific Railway Company, Calgary, Alberta, Canada.

You explain that your client, Canadian Pacific Railway Company (CP), as part of their managed maintenance program, is constantly replacing used and worn wooden railway ties from their track operations. You state that these wood railway ties would be exported from Canada by CP and sold to Kimberly-Clark Corporation and Koppers Industries, Inc. These two United States companies would use the subject used railway ties as fuel in their co-generation plants to produce electricity for use at their plants.

You state that in the condition as imported, the subject railway ties have come to the end of their useful life for the purpose for which they were intended.

You have opined that because of the worn condition of the subject used railway ties and the intended application by the two U.S. buyers, that is, use as fuel, the ties should be classified under heading 4401.30.4090, HTSUS, which provides for sawdust, wood waste, and scrap.

Classification under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined in accordance with the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining rules will be applied in sequential order.

There are three competing tariff provisions for the subject products, as follows:

1. Heading 4401, HTSUS, wood waste.
2. Heading 4406, HTSUS, railway sleepers of wood. 3. Heading 4407, HTSUS, wood sawn of thickness exceeding 6 mm.

We will not address the applicability of heading 4406, HTSUS, since that issue was fully discussed and addressed in HQ 962237 dated June 2, 1999. We are incorporating the facts, analysis, and conclusion of that decision in this ruling. (Copy HQ 962237 is enclosed.)

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and General Rules of Interpretation. While neither legally binding nor dispositive of classification issues, the ENs provide commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).

Heading 4401, HTSUS, covers (among other things) sawdust, wood waste, and scrap. The ENs to heading 44.01 state as follows:

This heading covers:

(D) Wood waste and scrap, not usable as timber. These materials are used in particular for pulping (manufacture of paper) and in the manufacture of particle board and fibreboard and as fuel. Such waste and scrap includes, saw mill or planing mill rejects; manufacturing waste; broken planks; old crates unusable as such; bark and shavings (whether or not agglomerated in logs, briquettes, pellets or similar forms); other waste and scrap of joinery and carpentry; spent dyewood and tanning wood or bark. The heading also includes wood waste and scrap segregated from construction and demolition waste and not usable as timber. However, wood articles so segregated and suitable for reuse as such (e.g., beams, planks, doors) are classified in their appropriate headings. (Emphasis added.)

You have described the subject wood ties as being in various conditions when they are imported into the United States. The ties are no longer suitable for use as they were originally intended. They are worn and weathered to the “point that they can no longer handle rail traffic in a safe manner.” You have attached graphical pictures depicting the conditions of the subject ties.

We agree that the subject ties can no longer serve as railway ties because of their physical conditions. However, the poor quality of a sawn timber does not, ipso facto, transform the timber into a waste product. Timbers and lumber products are produced and sold in many qualities and grades. As the ENs to heading 44.01 (supra) indicate, timbers suitable for reuse as such are classified in their appropriate headings.

The information that you have submitted does not show that the subject wood ties are so deteriorated that they do not meet the requirements of railway ties and, in addition, are no longer fungible timbers.

In HQ 962237, (supra) it was determined that, according to Additional U.S. Rule of Interpretation 1(a), the used railroad ties were not of a class or kind principally used as railroad ties. Moreover, it has been found that used railroad ties are used in the United States principally as landscaping timbers.

In addition to the ENs to heading 44.01, Chapter 44, Additional U.S. Note 1(a) defines the term wood waste as follows:

1. In this chapter:

(a) The term “wood waste” means residual material other than firewood resulting from the processing of wood, including scraps, shavings, sawdust, veneer clippings, chipper rejects and similar small wood residues, as well as larger or coarser solid types of residual wood such as slabs, edgings, cull pieces and veneer log cores;

In the condition as imported, the used railroad ties at issue do not meet the requirements of wood waste under heading 4401, HTSUS.

The ENs to heading 44.07 state in relevant part as follows:

With a few exceptions, this heading covers all wood and timber, of any length but of a thickness exceeding 6 mm, sawn or chipped along the general direction of the grain Such wood and timber includes sawn beams, planks, flitches, boards, laths, etc

It is to be noted that the wood of this heading need not necessarily be of rectangular (including square) section nor of uniform section along the length.

As we have discussed, the identity of the subject articles (railway ties) has been destroyed through the course of wear and tear and can no longer be used as such. Thus, these wood ties are no longer provided for eo nomine in heading 4406, HTSUS. However, the identity of the subject wood ties as sawn wood of heading 4407, HTSUS, (also an eo nomine provision) has not been destroyed. The subject wood ties meet the definition of sawn wood in heading 4407, HTSUS.

We find that the subject merchandise satisfies the terms provided for in heading 4407, HTSUS, by operation of GRI 1.

The applicable subheading for the used wood railway ties will be 4407.10.0002, Harmonized Tariff Schedule of the United States (HTS), which provides for coniferous sawn wood treated with paint, stain, creosote, or other preservative. The rate of duty will be free.

The used wood railway ties in question may be subject to antidumping duties and/or countervailing duties. A list of AD/CVD proceedings at the Department of Commerce (DOC) and their product coverage can be obtained from the DOC website at: http://ia.ita.doc.gov, or you may write to them at the U.S. Department of Commerce, International Trade Administration, Office of Antidumping Compliance, 14th Street and Constitution Avenue, N.W. Washington, DC 20230. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs.

The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in 19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. In the event that the facts or merchandise are modified in any way, you should bring this to the attention of Customs and you should resubmit for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by the Bureau of Customs and Border Protection.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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 Paul Garretto at 646-733-3035.


Robert B. Swierupski

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