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HQ 230015

September 8, 2003

DRA-4-RR:CR:DR 230015 IOR


Karen L. Schmidt
Attorney-in-fact for ThyssenKrupp Steel, N.A. Sandler & Travis Trade Advisory Services, Inc. 38345 Ten Mile Road, Suite 200
Farmington Hills, MI 48335

RE: Ruling request; commercial interchangeability; electrogalvanized steel coil; 19 U.S.C. 1313(j)(2)

Dear Ms. Schmidt:

This letter is in response to a request, dated June 10, 2003,on behalf of your client, ThyssenKrupp Steel North America, Inc. ("Thyssen"), for a binding ruling on the commercial interchangeability of electrogalvanized steel coil. Our decision follows.


The request of June 10, 2003, follows our decision in HQ 229650, dated February 20, 2003, on Thyssen's request for a binding ruling on the commercial interchangeability of alloy steel and carbon ("non-alloy") steel. In HQ 229650, it was determined that the imported and exported alloy steel was commercially interchangeable, and that based on the information provided we were unable to determine that the imported and exported carbon ("non-alloy") steel was commercially interchangeable. This ruling request is for a decision on the commercial interchangeability of carbon ("non-alloy") steel.

The imported carbon steel was entered under entry 016-XXXX704-6 of October 15, 2000, line item eight. The merchandise is described on the Entry Summary (CF 7501) as "steel, F/R,P/C w/Zinc, not H/S", under subheading 7210.30.0060, Harmonized Tariff Schedule of the United States ("HTSUS"). The description includes a reference to the number 5106465, which is Thyssen's order number. While the description includes a reference to an invoice number 26361, that number is a company tracking number rather than an invoice number. The tracking number is included in a listing of tracking numbers following the CF7501. The actual invoice number is 22854.01, and the invoice date is September 27, 2000.

The link to the various import entry documents is the purchase order number 5106465. According to the invoice, the steel is 69.250 inches wide and 0.0310 inches thick (1759 mm wide and .787 mm thick). The import purchase order submitted specifies various criteria, however the typed order number appears to be "5406465". Thyssen has explained that the "4" was corrected to a "1" and was already corrected when Tyssen pulled the document from their files for purposes of this ruling request. The date of the blanket purchase order is November 16, 1999. According to a translation. From German to English, of the purchase order submitted, the steel is to have a minimum coating thickness of 60/61 grams per square meter (g/m2), with the good side (outside), and meet ASTM specification A917. The minimum size is to be 0.031 inches thick and 69.25 inches wide (0.787 x 1.759 mm). The steel is to be unstamped, have a surface version of Class 1, and is to have no welds or seams. The entered value per kilogram of the steel can be determined by dividing the entered value by the kg. weight of the steel. The invoice describes the steel as electrogalvanised coils, "OILED; UNTRIMMED; D.SIDE< 10MY ZE; BEST SURFAC. B/05." The size is described as 69.250 x 0.0310 inches. There is a reference to DQSK ASTM A 917. The import mill certificate describes the steel as "ELECROLYTICALLY ZINC COATED COILS IN DQSK ACCORDING TO ASTM A 917" and 0.787 x 1759.0 mm and 0.0310 x 69.250 inches. The import mill certificate also states the chemical composition for several samples. The chemical composition of the samples of the imported steel had the following percentage ranges:

.20 - .29
.009 - .013
.210 - .220
.007 - .012
.0030 - .0080
.026 - .043

The coating thickness of the samples ranged from 51 to 79 g/m2.

With regard to the export, the translated purchase order indicates the steel specification as "DCO4 ZE 75/75 A O according to DIN EN Spec.: 10152." The specified dimensions are 1.5 x 592 [mm apparently] "according to DIN EN Spec.: 10131". Additional specifications are as follows:

Double-sided 7.5 +/- 1 MY
EG stencil on top side
Oil coverage per side 1.5 +/- 0.5 G/M2
Roughness 1.5 -2.1 MY according to spec. 1940 Rolling Thickness 1.450 +/-0.050
ZB reinforced hinges part number: 8199997/998E46

The export invoice refers to the steel as "DC04 75/75 Electrogalvanized." The dimensions are said to be 41.26 inches wide and .0316 inches thick (1048 mm wide and .80 mm thick). According to the invoice, the tariff classification of the exported carbon steel is subheading 7210.30, HTSUS. According to Thyssen's submission, the HTSUS subheading for both the import and the export is 7210.30.0060. The value of the exported steel, by kilogram, can be determined by dividing the invoice amount by the weight of the export.

The mill certificate for the export describes the steel as "ZINCGRIP ELECRASMOOTH GALV SHT 75G75G GRADE U DS TYPE B OIL FUCHS RP4107S" and 0.0316 x 41.8180 inches. The import mill certificate also states the percentage of chemical composition of the product for the following elements, as well as others:


The coating thickness ranged from 83 to 95 g/m2. The mill certificate refers to 41, 700 lbs. of steel, and includes a "LIFT ID" number, which number is the same as the "COIL #" on the export invoice, although the "net lbs." described on the invoice is only 40,910. According to Thyssen the "LIFT ID" and "COIL #" refer to the same thing, in this case the specific merchandise. Also, according to Thyssen, the difference in weight and the dimensions is attributable to the trimming of the edge of the steel prior to export.

According to Thyssen's submission, the imported and exported steel "is substituted according to steel type, carbon content, weight, industry standards and coating weight all within allowable tolerances and in accordance with European standards for EN10152 (with the range of carbon content from 0.0% up to 0.08% and range of phosphorous content from 0.0% up to 0.03%)...electrolitically zinc coated steel."


Whether the imported carbon steel and substituted carbon steel are commercially interchangeable for purposes of 19 U.S.C. §1313(j)(2).


Under 19 U.S.C. §1313(j)(2), as amended, drawback may be granted if, among other requirements, there is, with respect to imported duty-paid merchandise, any other merchandise that is commercially interchangeable with the imported merchandise.

Congress has stated that in determining whether two articles are commercially interchangeable, the criteria to be considered would include, but not be limited to governmental and recognized industrial standards, part numbers, tariff classification, and relative values. See House Report 103-361, 103d Cong., 1st Sess., 131 (1993). The Senate Report for the NAFTA Act contains similar language and states that the same criteria should be considered by Customs in determining commercial interchangeability. See S. Rep. No. 103-189, 103d Cong., 1st Sess., 81-85 (1993); see also Texport Oil Co. v. United States, 185 F.3d 1291, 1295. In addition, the Senate Report states that Customs "should evaluate the critical properties of the substituted merchandise, rather than basing its determination on subjective standards." Senate Report, at page 83.

In order to determine commercial interchangeability, Customs adheres to the Customs regulations, which implement the operational language of the legislative history. The best evidence whether those criteria are used in a particular transaction is the claimant's transaction documents. Underlying purchase and sales contracts, purchase invoices, purchase orders, and inventory records show whether a claimant has followed a particular recognized industry standard, or a governmental standard, or any combination of the two, and whether a claimant uses part numbers to buy, sell, and inventory the merchandise in issue. The purchase and sale documents also provide the best evidence with which to compare relative values. Also, if another criterion is used by the claimant to sort the merchandise, the claimant's records would show that fact which will enable Customs to follow the Congressional directions. Customs has promulgated 19 C.F.R. 191.2(e) and 191.32(c), which identified the above criteria. We have reviewed the submitted information and our analysis follows.

Part numbers

Based upon our review of the documents, part numbers are not used for the purchase or sale of the merchandise. Also, Thyssen has stated in its request that it does not use part numbers to identify its import and exports, but rather uses other criteria. Therefore, this criterion is inapplicable.

Tariff classification

Entry Summary
7210.30.0060, HTSUS (Flat rolled products of iron or non alloy steel, of a width of 600 mm or more, electrolytically plated or coated with zinc; other) 7210.30.0060, HTSUS
Thyssen submission

Based upon the above information, we conclude that the tariff classification criterion has been met. Relative Values

The value of the exported merchandise is 85.6% greater than the value of the imported merchandise. We have held that a variance in price does not necessarily preclude a finding of commercial interchangeability, when other criteria of commercial interchangeability have been met or when sufficient evidence is provided to support the material difference in value. See HQ 227220 (February 10, 1997) (holding that although the price difference of the imported and exported merchandise was in excess of 24%, the imported and exported merchandise qualified under the applicable industry standards and thus, relative value did not have as much weight when determining commercial interchangeability); HQ 226995 (June 4, 1997) (holding that the 35% difference in value was a result of market conditions at the time of import and export). Regarding the value, Thyssen has submitted a statement that briefly describes the base prices of the import and export and the subtractions from and additions to the base price, including, for the export, a 15-20% mark up for the requirement of a large quantity of steel in a short period of time. Documentation regarding the statements has been submitted, however the statements do not purport to provide a final value for the import and export, which can be substantiated by the import and export invoices, or upon which we can make a comparison, nor do they provide an estimated relative value. We conclude that the value criterion is inconclusive on the issue of commercial interchangeability.

Government and Recognized Industry Standards

Import Invoice
"Electrogalvanised coils"; DQSK ASTM A 917; "oiled; untrimmed; D. Side<10MY ZE; Best surfac. B/05"; 69.250x0.0310";1759 x 0.78mm DC04 75/75 Electrogalvanized.0316 x 41.26";.80 x 1048mm Export Invoice
Import Purchase Order
Electrogalvanized w/zinc; DQSK coating; ASTM A 917; min 60/61 g/m2 coating weight; class 1 surface version; good side (outside); unstamped; no welds, void of seams; min.0.031 x 69.25"; 0.787 x 1.759mm

DCO4 ZE 75/75 A O;
DIN EN spec:10152;DIN EN spec: 10131; 1.5 x 592; double sided 7.5 +/-1 MY; EG stencil on top side; oil coverage per side 1.5 +/- 0.5G/M2; roughness 1.5 - 2.1 MY according to spec. 1940; rolling thickness 1.450+/-0.050; ZB reinforced hinges part number: 6199997/996E46 Export Purchase Order

On the import invoice, there is a reference to ASTM standard A 917 ("Standard Specification for Steel Sheet, Coated by the Electrolytic Process for Applications Requiring Designation of the Coating Mass on Each Surface (General Requirements)"). ASTM A 917 covers electrolytic coated steel sheet coated with zinc, in several classes: commercial steel, drawing steel, deep drawing steel, extra-deep drawing steel, structural steel, high-strength low-alloy steel and high-strength low-alloy steel with improved formability. The standard does not, however, delve into the composition of the steel itself. Those types of specifications are apparently contained in various ASTM standards referenced in ASTM 917 and dependent on the class of steel. Thyssen has not supplied the ASTM standard that would apply to the class of imported steel that is the subject of this request. However, unlike in HQ 229650, supra, documentation of the chemical composition of both the imported and exported merchandise has been provided, and we are able to make a comparison.

The exported carbon steel documents contain references to European standard DIN EN 10152, which covers several subcategories of electrolytically zinc-coated cold rolled steel flat products. According to the material submitted by Thyssen, the specification generally covers cold rolled steel sheet made from mild unalloyed steel, it can be applied to other types of steel, including alloy steel. It lists the manner in which the steel that it covers must be designated, the chemical composition of the steel, and the mechanical properties, among other things. The term "DCO4" is listed within the specification, and is also referenced in the documents. It denotes non-alloy quality steel that may be supplied as alloy steel, unless otherwise agreed at the time of the inquiry and order. DC04 is described as "non alloy quality steel" with maximum percentages for Carbon (0.08%), Phosphorus (0.03%), Sulfur (0.03%), and Manganese (0.40%). Based on the chemical composition analysis in the mill certificates, both the imported and exported steel meet the DC04 criteria with respect to the chemical composition.

There is another specification stated on the purchase order for the exported merchandise, for "DIN EN Spec: 10131". According to Thyssen this is a standard within the EN 10152 standard and pertains to the tolerances, dimensions and shape of the steel.

As to the zinc coating, Thyssen has submitted an explanation of the European and U.S. coating standards. The European specifications refer to the coating thickness, while the U.S. specifications refer to the weight of the coating. The European specification "75/75" requires a zinc coating measuring at least 7.5 microns on each surface. The U.S. specification of "60/60" requires a zinc coating of at least 60 g/m2 of zinc on each surface. The 7.5 microns of zinc coating is equivalent to 54 g/m2 of zinc. The 60 g/m2 of zinc is equivalent to 8.4 microns of zinc coating. In this case the purchase order for the imported steel required a zinc coating of 60/61 g/m2. According to the mill certificate for the import, the coating ranged from 51 to 79 g/m2. However there was only one instance out of 25 coils where the coating weight, on one surface, was 51 g/m2. On this same coil, heat no. 483454, the other surface had a coating weight of 58 g/m2. All of the remaining test results on the other coils ranged from 63 to 79 g/m2, which meets the import requirement, and is greater than the 54 g/m2 required for the minimum specification of 7.5 microns for the European 75/75 specification, for the export, as set forth on the purchase order for the export and the export invoice. The coating on the export ranged from 83 to 95 g/m2, which is well above the 54 g/m2 equivalent to 7.5 microns required to meet the European 75/75 specification. Therefore both the import and export meet the higher coating specification, that is above 60 g/m2, with the exception of one unit of the imported steel. In order to be commercially interchangeable, both the import and export would have to meet the minimum coating requirement of 60 g/m2.

We note that the imported steel is .0006 inches less thick than the substituted export. In HQ 229650, we referred to our Office of Laboratories and Scientific Services opinion that a significant difference in thickness between the non-alloy steels would mean the steels could not be interchangeable for stamping operations. The imported non-alloy steel in HQ 229650 was nearly six times thicker than the substituted steel, whereas the difference in thickness between the imported and exported alloy steel was .0218 inches, and the difference was not addressed and the steel was determined to be commercially interchangeable.

Based upon an analysis of the supplied information and the referenced standards, we conclude that this criterion has been met.

Other critical properties

According to the ruling request, Thyssen uses the categories of carbon content, total weight, and coating weight to buy and sell its steel products. As stated above, the carbon content of the import and export meet the DCO4 standard, and both the import and export meet the same coating specifications with the exception of one unit of the imported steel. The manner in which the total weight is used to buy and sell the steel is not explained.

In conclusion, we find that the imported non-alloy steel is commercially interchangeable with the exported non-alloy steel, with the exception of the portion of the imported steel which did not meet the minimum coating requirement. Although there are questions regarding the relative values of the steel, and the industry standards used to buy and sell the steel, we note that the criteria of tariff classification, coating weight and carbon content have been sufficiently met in order for us to reach this decision.


The imported non-alloy steel and exported non-alloy steel are commercially interchangeable for purposes of 19 U.S.C. §1313(j)(2), with the exception as
noted above, with regard to the unit of imported steel for which the coating weight did not meet the standards.


Myles Harmon
Director, Commercial Rulings Division

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