Importer's Chemical Products Aren't 'Supported Catalysts' on Their Own, US Says
Saying that importer Lanxess’ chemicals were, on import, “intermediate components” rather than “supported catalysts,” the U.S. responded Sept. 12 to the importer’s motion for judgment with a cross motion (Lanxess Corporation v. United States, CIT # 23-00073).
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It also noted that it “stand[s] at the ready” to bring a counterclaim rather than a cross-motion, should the Court of International Trade request it. In 2022, CIT ruled that such counterclaims aren’t supported by the 1930 Tariff Act (see 2207200052), a move the government has continued to oppose (see 2409160037).
Lanxess’ product, Axion CA 1330, should have been classified under Harmonized Tariff Schedule heading 3824 as a product prepared by the chemical industries, not the defendant’s preferred heading, heading 3815, as a “reaction accelerator,” the government said in its cross-motion. It also said the entries were wrongly classified by CBP under heading 3208, which covers various solutions.
The government explained that Lanxess sells Axion CA 1330 to domestic producers of polypropylene and polyethylene -- “thermoplastics that are used to make items such as milk jugs, candy bar wrappers and Saran Wrap.” Thermoplastics are manufactured using a chemical process called olefin polymerization, it said, which Axion CAA is used to accelerate.
Axion CA 1330, Lanxess said in its motion for judgment, is an organometallic substance consisting of between 30% and 50% methylaluminoxane (MAO) and 1% and 5% trimethylaluminum -- neither of which falls under any HTS heading, The MAO and trimethylaluminum is imported in a solution of toluene to keep the mixture stable.
In its motion, Lanxess argued that its product is a “supported catalyst,” not a solution under heading 3208 (see 2508060064).
After reviewing “the undisputed facts,” the government said it agreed that Axion CA 1330 isn’t classifiable under heading 3208. The specific classification applied to Lanxess’ product, subheading 3208.90.90, covers “[p]aints and varnishes,’” it said.
Rather, Axion CA 1330 falls under heading 3824, which carries a higher duty than 3208, it said.
Both heading 3824 and heading 3815 are basket provisions, it observed. As a result, they are mutually exclusive.
At importation, the government said, “Axion CA 1330 is a finished product comprised only of MAO, TMA, and toluene, and it is not deposited on a support.” Because of this, it said, General Rule of Interpretation 1 requires classification of the product under heading 3824 because it isn’t a “supported catalyst” on its own. Instead, it is a fully finished “intermediate component” that requires further processing with other inputs to actually be used as a catalyst.
Heading 3815, however, only covers “[r]eaction initiators, reaction accelerators and catalytic preparations,” it said.