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Classification, Origin Changes for Silicon Wafers, Pill Cases, Steel Tubing, Pump Dispensers

Friday, November 22, 2019
Sandler, Travis & Rosenberg Trade Report

The following proposed and final revocations and modifications of U.S. Customs and Border Protection rulings are included in the Nov. 20, 2019, Customs Bulletin and Decisions. Comments on the proposed changes are due by Dec. 20 and the final changes will be effective with respect to goods entered or withdrawn from warehouse for consumption on or after Jan. 20, 2020.

For more information on how to seek or utilize classification or other rulings, please contact customs attorney Deb Stern at (305) 894-1007.

Coated Silicon Wafers

CBP is reclassifying anti-reflection coated silicon wafers, which are manufactured into complete solar panels after importation, as unfinished diodes under HTSUS 8541.40.60 (duty-free) rather than as parts of unfinished diodes under HTSUS 8541.90.00 (duty-free). CBP explains that these items have the essential character of a photosensitive semiconductor device upon importation. Ruling HQ H301201 will revoke ruling HQ 957189 to reflect this change.

Origin for Marking Purposes

In ruling NY N153956 CBP determined that the ultimate purchaser of a plastic pill case is the consumer who receives the case with the pills because the cases are of durable construction and suitable for repetitive use. As a result, CBP held that each pill case must be marked with the country of origin.

However, CBP now states that the pill cases are of a thin, flimsy nature; have no lasting value or decorative use; and are likely to be discarded after the pills have been consumed. As a result, CBP states that the ultimate purchaser of the pill cases is the pharmaceutical company and it is acceptable to mark the country of origin on the outermost container of the pill cases that will be packed and sold to that company.

Ruling HQ H303064 will revoke ruling NY N153956 to reflect this change.

Origin for Trade Remedy Purposes

CBP is revoking ruling NY N298549, which applied the NAFTA marking rules to determine the country of origin of steel tubing subject to Section 232 tariffs. This tubing is manufactured in the U.S. and then exported to Mexico, where it is painted, passed through an iron phosphate treatment to inhibit rust, and then chemically etched before being imported back into the U.S.

CBP initially used the NAFTA marking rules to determine that the U.S. is the country of origin for marking and duty purposes and the tubing is therefore not subject to Section 232 tariffs. However, CBP now states that the NAFTA marking rules are only applicable in limited circumstances and that the substantial transformation analysis must be used when determining origin for purposes of Section 201, 232, and 301 tariffs. Using this analysis, CBP again finds that the tubing is a product of the U.S. and is not subject to the Section 232 tariffs.

Pump Dispensers

CBP is proposing to reclassify pump dispensers as other mechanical appliances for dispersing liquids under HTSUS 8424.89.90 (1.8 percent duty) rather than as spray guns under HTSUS 8424.20.10 (2.9 percent duty). CBP explains that these items are similar to hand-operated pump dispensers it has previously classified in HTSUS 8424.89.90 and are not spray guns because they do not resemble a gun and are not used to spray liquids under pressure. Rulings NY N249630, NY N299353, and NY N298787 would be revoked to reflect this change.

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