Rulings, remedies and court proceedings for customs and trade professionals

Newly Released CBP HQ Rulings Nov. 9-13

The Customs Rulings Online Search System (CROSS) was updated Nov. 9-13 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):

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H322641: Tariff classification of a plastic recycling plant

HTS: 8419.89.95, 4.2%, "Machinery, plant or laboratory equipment, whether or not electrically heated (excluding furnaces, ovens and other equipment of heading 8514), for the treatment of materials by a process involving a change of temperature such as heating, cooking, roasting, distilling, rectifying, sterilizing, pasteurizing, steaming, drying, evaporating, vaporizing, condensing or cooling, other than machinery or plant of a kind used for domestic purposes; instantaneous or storage water heaters, nonelectric; parts thereof: Other machinery, plant or equipment: Other: Other: Other."
Issue: Is the plant classifiable as a “distilling or rectifying plant” in subheading 8419.40, or as “Other” machinery, plant or equipment for the treatment of materials by a process involving a change of temperature in subheading 8419.89?
Item: A plastics recycling plant for recycling post-consumer and post-industrial plastics with high levels of polyethylene terephthalate (PET) by refining and reclaiming chemical products such as polymer-grade ethylene glycol (EG) and dimethyl terephthalate (DMT). The plant is an integrated combination of twelve units consisting of individual components connected by piping, wiring and structural steel and operate in a continuous flow. The methanolysis unit is integral to the functioning of the plant, breaking down the PET into EG and DMT vapors using a chemical reaction that involves mixing vaporized methanol, molten PET, and a catalyst.
Reason: In order for the plant to be classified in subheading 8419.40, the units and subunits must contribute together to the clearly defined function of distillation. While certain units perform a distillation function, they are contributing to the primary function of chemically breaking down the raw material and extracting compounds that occur within the methanolysis unit. Any distillation that occurs is secondary in importance to the chemical process that occurs by the methanolysis unit.
Ruling Date: Nov. 9, 2023

H324885: Application for Further Review of Protest No. 4197-22-106050; Transaction Value

Ruling: The discounted price for the imported merchandise is supported by the documents provided and is an acceptable price actually paid or payable.
Issue: May the imported merchandise be appraised under transaction value based on the discounted price?
Item: Various integrated circuits that were purchased from an importer's unrelated supplier. The protestant filed post-summary corrections to amend the valuation of the entries to account for the discounts received from the supplier. CBP initially liquidated the entries reflecting the amended valuation and accordingly noted a “change decrease”. Subsequently, CBP re-liquidated the entries noting a change increase, denying the post-summary correction.
Reason: Changes in the price actually paid or payable which are arrived at subsequent to the time of importation shall not be taken into account in determining transaction value. However, the distribution agreement, which sets forth the terms and conditions of discounted pricing offered to the protestant through the supplier’s discount programs, establishes that the discounted pricing received by the importer was agreed to and effected prior to importation.
Ruling Date: Aug. 11, 2023

H325936: Country of Origin of imported ink base; Section 301 measures; Application for Further Review of Protest 3802-22-105086

Ruling: The country of origin for Section 301 purposes of the ink base is Canada.
Issue: Is the country of origin of the subject ink base China for Section 301 purposes?
Item: An ink base product classified and entered under subheading 3204.17, imported into the U.S. for final processing into ink that is used by the commercial printing industry. Prior to importation, the ink base undergoes processing in Canada, where the U.S.-origin varnish/vehicle and the China-origin powder pigment (a dry powder) are combined and subjected to a dispersion process that uses physical energy to transform heavily aggregated and agglomerated particles into the finely dispersed discrete particles required to produce high performance ink bases. After the processing, the ink base has a pre-determined use for printing applications, and can no longer be used in plastic, rubber, or in textile fibers.
Reason: As a result of the processing, the refined powder pigment undergoes a change in name, from powder pigment to ink base. It also undergoes a change in character, from heavily aggregated and agglomerated powder pigment particles into finely dispersed discrete particles that are then mixed with varnish/vehicle and milled to de-aggregate and further reduce particle size, resulting in an ink base. Finally, the powder pigment undergoes a change in use, from a wide array of uses prior to processing, to an ink base with a pre-determined use for one or two types of printing inks. As such, the refined powder pigment has been substantially transformed into a new and different product.
Ruling Date: Aug. 10, 2023

H334180: Fisheries; Coastwise Transportation; FV OCEAN HARVESTER; 46 U.S.C. § 55102

Ruling: The use of the U.S.-built, U.S.-owned, coastwise-qualified vessel as a fish tender to transport fish and other seafood solely within the territorial waters of the states of Alaska, Washington, or Oregon from a catching vessel to the shore would not violate 46 U.S.C. § 55102.
Issue: Does the proposed use of a U.S.-built vessel to transport seafood caught in state territorial waters to shore constitute an engagement in coastwise trade for purposes of 46 U.S.C. § 55102?
Item: A U.S.-built fishing vessel, FV OCEAN HARVESTER, that has received a certificate of documentation from the United States Coast Guard with endorsements for fishery, registry, and coastwise trade. The vessel was originally part of a National Oceanic and Atmospheric Administration (NOAA) Restricted Access Management (RAM) Program but was recently withdrawn from this fishery to be replaced with another vessel, and can no longer participate in federal fisheries. The vessel will be used as a fish tender as well as engage in state waters fisheries. The vessel would primarily transport salmon in the summer and possibly cod in the winter from the catching vessel to the dock to unload and sell. Sea cucumbers and geoducks may come aboard the vessel from state water fisheries.
Reason: The proposed use of the vessel to transport seafood from the catching vessel in Alaska, Washington, or Oregon state waters to shore constitutes a use as a fish tender vessel, and coastwise transportation. However, as the vessel is U.S.-built, coastwise documented, and U.S. owned, the coastwise transportation proposed would not be in violation of the Jones Act.
Ruling Date: Nov. 7, 2023