CBP's Classification of Steel Wires Undercut by Its Own Evidence, Importer Tells CIT
CBP erroneously found that importer Superon Schweisstechnik's stainless steel round wires aren't coated in a "flux material" and thus misclassified three types of the wires, Superon argued in an Oct. 30 complaint filed at the Court of International Trade. The importer faulted CBP for using the "conventional test methods" on the wires' coating, "rather than the globally recognized specialized methods necessary for identifying" the type of coating on the wires (Superon Schweisstechnik India v. United States, CIT # 21-00570).
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In addition to misclassifying Superon's wires, CBP "violated the law" by effectively revoking a prior customs ruling it made on the importer's wires and "modifying the treatment" it gave "Superon's substantially identical transactions" without a notice and comment period, the complaint said.
At issue are three types of the importer's wires: the "Metal in Gas," "Tungsten Inert Gas" and "Submerged Arc Welding" stainless steel round wires. Each wire is coated with a proprietary material that serves as a flux material for welding, the company said. CBP said the wires are coated with a mix of "methylene chloride and dichloroethylene, which functions as a flux material for welding."
On this basis, the agency classified the Metal in Gas and Tungsten Inert Gas wires under Harmonized Tariff Schedule subheading 8311.10.0000, which provides for coated electrodes for electric arc-welding, and the Submerged Arc Welding wires under subheading 8311.90.000, which provides for "other" wires coated with flux material of a kind used for welding. While both are duty-free subheadings, they carry a 25% Section 232 duty.
Instead, CBP should have classified the goods under subheading 7223.00.1061, which covers "uncoated stainless steel and round wire of a diameter between 1.52 and 5.1 millimeters," and secondary subheading 9903.80.01, the complaint said.
Throughout its correspondence with CBP, Superon said it learned that the agency tested the three wire types using conventional test methods that are ill-equipped to properly survey the coating of the company's wires, since "the amount of coating used by Superon on its wires is too little to properly detect and analyze using conventional methods."
In support of its protest, the importer provided laboratory analysis conducted by "independent third-party Shirey Analytical Services" that used the "Fourier Transform Infrared Spectroscopy Test," which is a "specialized" test "used globally to detect organic paints and coatings and are the only proper methods for identifying" coatings "like those on Superon's wire products," complaint said.
CBP denied Superon's protest, claiming its own lab reports found that Superon's wires were "stainless steel rod with no coating." After arguing that the agency's tests were insufficient, CBP conducted a Fourier Transform Infrared Spectroscopy Test, though it did so only after dissolving the coating off Superon's wire fronds, "which resulted in a manipulation of the product," the brief said.
The agency also used a Gas Chromatography/Mass Spectrometry test, but instead of using the "thermal desorption (pyrolysis) extraction method Superon requested," CBP used a "chemical extraction method," which can "impact the chemical integrity of the flux coating," the complaint said. Despite these "imprecise processes," CBP still detected evidence of the flux coating, though this information wasn't in the lab report given to the import specialist, Superon argued.
CBP ultimately found that no organic coating was found on the wires, though Superon said this conclusion was "contradicted" by "evidence from CBP’s own laboratory reports." After the importer contested this result again, CBP conducted a third test using the Fourier Transform Infrared Spectroscopy Test and found a "trace amount of unidentified organic matter." The agency ultimately denied Superon's protest, upending a previous customs ruling in which the agency classified the wires under the importer's preferred subheading.
At the trade court, Superon argued that the evidence clearly shows its wires belong under subheading 7223.00.1061 and that CBP violated U.S. customs law by "effectively revoking" its past customs ruling and affording the importer's substantively identical merchandise different treatment without proper notice and comment.