[Federal Register Volume 84, Number 64 (Wednesday, April 3, 2019)]
[Notices]
[Pages 13057-13059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06481]


-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

[Docket No.: USCBP-2019-0012]


Receipt of Domestic Interested Party Petition Concerning the 
Tariff Classification of Steel Special Profiles for the Manufacture of 
Forklift Truck Masts and Carriages

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of receipt of domestic interested party petition; 
solicitation of comments.

-----------------------------------------------------------------------

SUMMARY: U.S. Customs and Border Protection (CBP) has received a 
petition submitted on behalf of a domestic interested party requesting 
the reclassification, under the Harmonized Tariff Schedule of the 
United States (HTSUS), of certain steel special profiles from the 
United Kingdom and Germany, imported for use in manufacturing forklift 
masts or carriages. In New York Ruling Letter (NY) N293371, dated 
February 8, 2018, CBP classified the steel special profiles under 
subheading 8431.20.00, HTSUS, as parts suitable for use solely or 
principally with forklifts. Petitioner contends that based on their 
condition as imported and the processing that needs to be undertaken 
after importation, the steel special profiles should be classified 
under subheading 7216.50.00, HTSUS, as hot-rolled nonalloy steel 
profile shapes. Petitioner further contends that the result of this 
ruling is that the products are avoiding the application of additional 
duties for steel imposed by Presidential Proclamation 9705 of March 8, 
2018, under Section 232. This document invites comments with regard

[[Page 13058]]

to the correctness of the current classification.

DATES: Comments must be received on or before May 3, 2019.

ADDRESSES: You may submit comments, identified by docket number, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments via docket number 
USCBP-2019-0012.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of Trade, U.S. Customs and Border Protection, 90 K 
St. NE, 10th Floor, Washington, DC 20229-1177.
    Instructions: All submissions received must include the agency name 
and docket number for this notice of domestic interested party petition 
concerning the tariff classification of certain steel special profiles. 
All comments received will be posted without change to http://www.regulations.gov, including any personal information provided.
    Docket: For access to the docket to read background documents, 
exhibits, or comments received, go to http://www.regulations.gov. 
Submitted comments may also be inspected during regular business days 
between the hours of 9 a.m. and 4:30 p.m., at the Trade and Commercial 
Regulations Branch, Regulations and Rulings, Office of Trade, U.S. 
Customs and Border Protection, 90 K Street NE, 10th Floor, Washington, 
DC. Arrangements to inspect submitted comments should be made in 
advance by calling Mr. Joseph Clark, Trade and Commercial Regulations 
Branch, at (202) 325-0118. Please note that any submitted comments that 
CBP receives by mail will be posted on the above-referenced docket for 
the public's convenience.

FOR FURTHER INFORMATION CONTACT: Albena Peters, Chemicals, Petroleum, 
Metals and Miscellaneous Articles Branch, Regulations and Rulings, 
Office of Trade, U.S. Customs and Border Protection, at (202) 325-0321.

SUPPLEMENTARY INFORMATION: 

Background

    A petition has been filed under section 516 of the Tariff Act of 
1930, as amended (19 U.S.C. 1516), on behalf of Steel of West Virginia, 
Inc. (Petitioner), which manufactures steel shapes or profiles for sale 
to forklift truck manufacturers and is located in Huntington, West 
Virginia. Petitioner meets all of the requirements of a domestic 
interested party set forth in 19 U.S.C. 1516(a)(2) and section 175.3(a) 
in Title 19 of the Code of Federal Regulations (19 CFR 175.3(a)).
    Petitioner is requesting that U.S. Customs and Border Protection 
(CBP) reclassify the merchandise, referred to as ``incomplete steel 
mast rails and finger bars,'' in NY N293371, dated February 8, 2018. 
Petitioner contends that the merchandise is merely steel special 
profile shapes classifiable under subheading 7216.50.00 of the 
Harmonized Tariff Schedule of the United States (HTSUS).
    In NY N293371, CBP described the merchandise as ``either (1) cut to 
a fixed length in accordance with customer instructions or (2) in 
lengths designed to fit within the transporting cargo container . . . 
in their condition as imported, the mast rails and finger bars are not 
ready for direct use in fork-lifts.'' CBP applied General Rule of 
Interpretation (GRI) 2(a) to classify the subject merchandise as a 
blank for a part of a forklift in subheading 8431.20.00, as ``Parts 
suitable for use solely or principally with the machinery of headings 
8425 to 8430: Of machinery of heading 8427.''
    Petitioner maintains that use of GRI 2(a) is inappropriate because 
the merchandise meets the definition of an angle shape or section in 
Note 1(n) to Chapter 72. Moreover, Petitioner contends that the 
profiles must undergo extensive manufacturing after importation to make 
them suitable for use in the mast or carriage of a forklift. As such, 
according to Petitioner, the profiles do not have the essential 
character of forklift truck parts and are not excluded from 
classification by Note 1(f) to Section XV, pursuant to which articles 
of section XVI, HTSUS (machinery, mechanical appliances and electrical 
goods), are not covered by section XV, HTSUS.

Applicable Legal Principles

    Classification under the HTSUS is made in accordance with the GRIs. 
GRI 1 provides that the classification of goods shall be determined 
according to the terms of the headings of the tariff schedule and any 
relative section or chapter notes. In the event that the goods cannot 
be classified solely on the basis of GRI 1, and if the headings and 
legal notes do not otherwise require, the remaining GRIs 2 through 6 
may be applied, in numerical order.
    The Harmonized Commodity Description and Coding System Explanatory 
Notes (ENs) constitute the official interpretation of the Harmonized 
System at the international level. While not legally binding on the 
contracting parties and, therefore, not dispositive, the ENs provide a 
commentary on the scope of each heading of the Harmonized System and 
are thus useful in ascertaining the classification of merchandise under 
the system. CBP's position is that the ENs should always be consulted. 
See Treasury Decision (T.D.) 89-80, 54 FR 35127, 35128 (Aug. 23, 1989).

Elaboration of the Petitioner's Views

    Petitioner contends that the proper classification for the steel 
special profiles is subheading 7216.50.00, HTSUS, which covers 
``Angles, shapes and sections of iron or nonalloy steel: Other angles, 
shapes and sections, not further worked than hot-rolled, hot-drawn or 
extruded,'' in accordance with Note 1(n) to Chapter 72, HTSUS which 
defines steel ``angles, shapes and sections'' as ``products having a 
uniform solid cross section along their whole length which do not 
conform to any of the definitions at (i), (j), (k), (l) or (m) above or 
to the definition of wire.'' Petitioner argues that Note 1(f) to 
Section XV is inapplicable because the merchandise is not ready for use 
as forklift parts, or even for assembly into the mast or carriage part 
of a forklift, in its condition as imported. Petitioner contends that 
the steel special profile parts, even when referred to as ``incomplete 
mast rails and finger bars,'' require many additional steps until they 
are ready for assembly into a mast or carriage, such as:
     Cutting to length from 20-35 feet to fit into a shipping 
container down to approximately 7 feet for masts and 3 feet for 
carriages.
     Shot blasting and straightening to prepare for welding and 
painting.
     Machining and/or torch cutting to remove portions of the 
flange and to notch the pieces in the appropriate places.
     Drilling multiple holes in accordance with its use and 
placement in the carriage or mast.
     Welding to modify the profile section depending on its 
ultimate position in the carriage or mast.
     Cleaning and painting for final installation in the 
carriage or mast.
    Petitioner contends that these manufacturing processes 
significantly alter the steel profiles after importation to create the 
component assembled into a mast or carriage. Given the amount of extra 
processing required for steel profile shapes, even when referred to as 
``incomplete mast rails and finger bars,'' Petitioner maintains that 
the imported merchandise does not have the essential character of a 
forklift part and cannot be classified as such.
    In support of its argument, Petitioner cites to GRI 2(a), which 
states: ``Any reference in a heading to an article shall be taken to 
include a reference to that

[[Page 13059]]

article incomplete or unfinished, provided that, as presented, the 
incomplete or unfinished article has the essential character of the 
finished article.'' Additionally, EN 2(a) defines the term ``blanks'' 
as ``an article, not ready for direct use, having the approximate shape 
or outline of the finished article or part, and which can only be used, 
other than in exceptional cases, for completion into the finished 
article or part. Semi-manufactures not yet having the essential shape 
of the finished articles (such as is generally the case with bars, 
discs, tubes, etc.) are not regarded as `blanks.' ''
    Petitioner argues that steel special profiles do not have the 
``essential character'' of forklift truck parts as they are specified 
in their own heading, require extensive further manufacturing after 
importation, the post-importation manufacturing significantly alters 
the original shape and outline, each profile may be cut into different 
shapes, and the products are recognized and sold in the industry as 
steel profiles.

Analysis Used by CBP in Prior Rulings

    Historically, as noted by Petitioner, CBP has classified special 
steel profiles in heading 7216, HTSUS. In NY J82683, dated April 18, 
2003; NY N295670, dated April 27, 2018; and NY N295858, dated May 3, 
2018, CBP classified hot extruded nonalloy steel profiles in C, G, J 
and S shapes, which had yet to be machined, assembled into a frame and 
painted after importation, in heading 7216, HTSUS. By contrast, in NY 
N293371, where CBP referred to the merchandise as ``incomplete mast 
rails and fingerbars,'' CBP did find the steel special profiles to be 
classified in heading 8431, HTSUS, as parts of forklifts, by 
application of GRI 2(a). Whether the merchandise at issue and subject 
to NY N293371 should be reclassified under heading 7216, HTSUS, 
consistent with the other cited rulings (NY J82683, NY N295670 and NY 
N295858), hinges on the substantiality of the operations performed 
after importation.

Section 232 Duties

    The current column one, general rate of duty for products 
classified in either subheading discussed above is Free. However, on 
March 8, 2018, Presidential Proclamation 9705 (83 FR 11625) imposed 
additional tariffs and quotas on a number of steel products. Exemptions 
have been made on a temporary basis for some countries. Quantitative 
limitations or quotas may apply for certain exempted countries and can 
also be found in Chapter 99. Additional duties for steel of 25 percent 
are reflected in Chapter 99, subheading 9903.80.01. Steel products of 
the United Kingdom and Germany of heading 7216.50.00, HTSUS, are 
currently subject to additional duties for steel of 25 percent under 
Subchapter III, Chapter 99, U.S. Note 16(b). Importers of such products 
must also identify subheading 9903.80.01, HTSUS, at entry. Products of 
the United Kingdom and Germany of subheading 8431.20.00, HTSUS, are 
currently not subject to Section 232 duties.

Comments

    Pursuant to section 175.21, CBP Regulations (19 CFR 175.21), before 
making a determination on this matter, CBP invites written comments on 
the petition from interested parties.
    The domestic interested party petition concerning the tariff 
classification of certain steel special profiles, as well as all 
comments received in response to this notice, will be available for 
public inspection on the docket at www.regulations.gov. Please note 
that any submitted comments that CBP receives by mail will be posted on 
the above-referenced docket for the public's convenience.

Authority

    This notice is published in accordance with 19 U.S.C. 1516 and 
section 175.21 of the CBP Regulations (19 CFR 175.21).

    Dated: March 29, 2019.
Robert E. Perez,
Deputy Commissioner, U.S. Customs and Border Protection.
[FR Doc. 2019-06481 Filed 4-2-19; 8:45 am]
 BILLING CODE 9111-14-P