# HQ 966457

**September 25, 2003**

## CLA-2 RR:CR:GC 966457 RSD

**CATEGORY:** Classification

**TARIFF No:** 7306.30.10

Port Director

U.S. Customs and Border Protection

1 East Bay Street

Savannah, Georgia 31401

**RE:** Protest No. 1703-03-100063; longitudinally welded steel tubes
used for making shipping containers

Dear Port Director:

This is our decision regarding Protest 1703-03-100063, filed on behalf
of Greif Bros. Corporation (protestant) concerning the classification,
under the Harmonized Tariff Schedule of the United States (HTSUS), of
certain welded steel tubes.

**FACTS:**

The products at issue are longitudinally welded steel tubes. The tubes
are made of non-alloy steel and have a diameter that ranges from 21.87
mm to 22.13 mm. The wall thickness of the tubes ranges from 0.84 mm to
1.13 mm. The tubes are imported in six different lengths. One of these
six tubes is "tent-poled" at the end (reduced in diameter). The tubes
are galvanized and then varnished.

The imported tubes are specifically designed and manufactured for
assembly into shipping cages. In turn, the shipping cages are
specifically

designed and produced for the transportation of liquids. After
importation, protestant bends the tubes to shape so that they can be
welded together for fabrication into the steel cages. The steel cages
are used in the production of intermediate bulk containers (IBCs).
According to information contained in the protestant's submission, the
completed IBC consists of (1) the UniCUBE, the external cage assembled
of the imported articles; (2) the 275-330 gallon cylindrical plastic
bottle inside the cage; and (3) a pallet of wood, plastic, or steel. The
base pallet and the plastic bottle for holding liquids are attached to
the steel cages to form the IBC. The plastic bottle is equipped with a
special valve and a cap to facilitate loading and unloading of liquids.
The cap is opened to permit airflow while the liquid is being withdrawn
or filled.

On the Greif Bros. website the word UniCUBE is followed by the ® symbol,
which means that the term UniCUBE is a registered trademark. The Greif
Bros. website indicates that the UniCUBE IBC is the optimum packaging
for a large range of liquids both hazardous and non-hazardous, during
transport and storage. The UniCUBE IBC bottle is housed in a high
strength tubular steel cage that meets stringent quality and industry
standards. On the steel and plastic pallet versions, the bottom of the
UniCUBE IBC has a special domed shape to ensure that the contents can be
drained completely thus eliminating waste. Based on this information
contained on the Greif Bros. website, we will refer to the finished
article as the UniCUBE IBC.

The UniCUBE IBCs are specifically engineered to serve three basic
purposes. First, the tubular supports of the UniCUBE IBC allow the
liquid-carrying bottle to be secure for different modes of transport.
Second, the UniCUBE IBC is designed to allow the liquid contents to be
loaded, unloaded and reused over extended time periods and long
distances. Third, the UniCUBE IBC provides the structural support needed
to protect the plastic bottle, preventing damage and leakage during
shipment. The imported components assembled into the UniCUBE IBC are
specifically designed to allow the UniCUBE IBC to meet the Department of
Transportation (DOT) standards for IBC's and the additional durability
and strength demanded by end-users of reusable IBCs. Without the tubular
shipping cages made from the corrosion-resistant, high-strength,
custom-cut imported steel tubes, the product could not function as a
reusable IBC for use in various modes of transport.

The protestant states that the combination of the patented coating, the
high-strength properties, and the specific dimensions of the imported
tubes render them unsuitable for any use other than as parts for the
UniCUBE. The tubes have never been, and will never be used for any other
purpose. On this basis the protestant contends that the imported tubes
have the essential character of a finished container for transporting
fluids that is classified in subheading 8609.00.00, HTSUS.

The tubes are not imported in complete unassembled sets containing all
the necessary components to make the finished UniCubes. Instead each
shipment consists of only one or two specific lengths of tubes. Tubes
from several different imported shipments containing different sizes
must be combined with each other and with the other materials/components
to produce the UniCUBE container.

**ISSUE:**

What is the correct classification under the HTSUS of the imported steel
tubes that are used in the production of the \"UniCUBE\" IBC?

**LAW AND ANALYSIS:**

Merchandise imported into the U.S. is classified under the HTSUS. Tariff
classification is governed by the principles set forth in the General
Rules of Interpretation (GRIs) and, in the absence of special language
or context that requires otherwise, by the Additional U.S. Rules of
Interpretation. The GRIs and the Additional U.S. Rules of Interpretation
are part of the HTSUS and are to be considered statutory provisions of
law.

GRI 1 requires that classification be determined first according to the
terms of the headings of the tariff schedule and any relative section or
chapter notes and, unless otherwise required, according to the remaining
GRIs taken in order. In interpreting the HTSUS, the Explanatory Notes
(ENs) of the Harmonized Commodity Description and Coding System may be
utilized. The ENs, although not dispositive or legally binding, provide
a commentary on the scope of each heading, and are generally indicative
of the proper interpretation of the HTSUS. See T.D. 89 80, 54 Fed. Reg.
35127 (August 23, 1989).

> The HTSUS headings under consideration are as follows:

7306 Other tubes, pipes and hollow profiles (for example, open seamed or
welded, riveted or similarly closed), of iron or steel:

30. Other, welded, of circular cross section, of iron or nonalloy steel:

    10. Having a wall thickness of less than

> 1.65 mm

\* \* \* \*

8609.00.00 Containers (including containers for the transport of fluids)
specially designed and equipped for carriage by one or more modes of
transport

Protestant believes that the custom cutting, coating, and reduction of
the ends on some of the tubes are unique characteristics that indicate
that the tubes are intended for use solely in the production of the
steel cages of the UniCUBES. Consequently, protestant argues that the
tubes should not be classified in the general basket provision for
tubes.

The Chapter 73 General ENs describe tubes and pipes as concentric hollow
products of uniform cross-section with only one enclosed void along
their whole length having their inner and outer surfaces of the same
form. Steel tubes are mainly of circular, oval rectangular (including
square) cross section....They may be polished, coated bent ...threaded
and coupled or not drilled, waisted (narrowed) expanded, cone shaped or
fitted with flanges, collars or rings.

The ENs to heading 7306 further state that the tubes of this heading may
be used for numerous purposes. They provide numerous examples of the
types of products that are included in the heading:

> This heading includes, in particular, line pipes of a kind used for
> oil or gas, casing and tubing of a kind used in drilling for oil or
> gas, tubes and pipes suitable for use in boilers, superheaters, heat
> exchangers, condensers, feed-water heaters for power stations,
> galvanised or black tubes (so-called gas tubes) for high or medium
> pressure steam or water distribution in buildings, as well as tubes
> for water or gas street distribution mains. In addition tubes, pipes
> and hollow profiles are used for the manufacture of parts for
> automobiles or for machinery, bicycle frames, prams, or for other
> structural uses, scaffolding or tubular structures or building
> construction. "Open seam" tubes are used, for example, as frames for
> metal furniture.

The ENs, however, also indicate that pipes and tubes made up into
specific identifiable articles are excluded from heading 7306, HTSUS.

Protestant contends that the imported steel tubes are unassembled and
incomplete shipping containers that should be classified in heading
8609, HTSUS in accordance GRI 2(a). Protestant's position is based on
its claim that the imported steel tubes have the essential character of
the finished UniCUBE IBCs.

GRI 2(a) states that:

> Any reference in a heading to an article shall be taken to include a
> reference to that article incomplete or unfinished, provided that, as
> entered, the incomplete or unfinished article has the essential
> character of the complete or finished article. It shall also include a
> reference to that article complete or finished (or falling to be
> classified as complete or finished by virtue of this rule), entered
> unassembled or disassembled.

By its terms, GRI 2(a), HTSUS, extends the scope of a 4-digit heading to
include an article, whether assembled or unassembled, that is imported
incomplete or unfinished. The first part of Rule 2(a) extends the scope
of any heading which refers to a particular article to cover not only
the complete article but also that article incomplete or unfinished,
provided that, as presented, it has the essential character of the
complete or finished article

In interpreting the HTSUS, we have construed the term \"essential
character\" to mean the attribute which strongly marks or serves to
distinguish what an article is; that which is indispensable to the
structure, core or condition of the article. See HQ 956538 dated
November 29, 1994. As the merchandise changes, so, too, may the factor
or factors which determine its essential character. Factors found to be
relevant in other contexts are the significance of the imported
components or their role in relation to the use or overall functioning
of the completed article and, to the extent that it validates that
comparison, the cost or value of the completed article versus the cost
or value of the imported merchandise. See HQ 956410 dated October 14,
1994.

> EN (V) to GRI 2(a) states that:
>
> The second part of Rule 2(a) provides that complete or finished
> articles presented unassembled or disassembled are to be classified in
> the same heading as the assembled article. When goods are so
> presented, it is usually for reasons such as requirements or
> convenience of packing, handling or transport.
>
> EN (VII) to GRI 2(a) states that:\
> \
> For the purposes of this Rule, \"articles presented unassembled or
> disassembled\" means articles the components of which are to be
> assembled either by means of fixing devices (screws, nuts, bolts,
> etc.) or by riveting or welding, for example, **provided** only simple
> assembly operations are involved.... Unassembled components of an
> article which are in excess of the number required for that article
> when complete are to be classified separately.

We note that the steel tubes are being imported for the purpose of
making the UniCUBE IBCs. Therefore, we must consider whether the
imported tubes have the essential character of the UniCUBE IBC. In
considering whether the imported steel tubes have the essential
character of the finished and fully assembled UniCUBE IBC, we note that
two major components of the UniCUBE IBC, the plastic bottles and the
pallets, are not present when the tubes are imported. We believe that
the plastic bottle is a very significant part of the completed UniCUBE
IBC. The plastic bottle is the component of the UniCUBE IBC that
actually holds the liquids that are being transported. Thus, without the
plastic bottle, the steel cages cannot be considered an UniCUBE IBC
suitable for transporting liquids. Therefore, we believe that the
imported tubes without the plastic bottle and the pallet cannot be
considered to have the essential character of the finished UniCUBE IBC.

Although the subject tubes may be designed and manufactured solely for
use in making the UniCUBE IBC, in their imported condition, they do not
have the shape of the finished UniCUBE IBC. The tubes are imported only
in straight lengths. Before they are assembled together to form the
finished steel cage section of the UniCUBE IBCs, they must be bent to
shape. After the tubes are bent, they can be welded together.
Accordingly, when the tubes are imported, they cannot be clearly or
reasonably identified as the completed UniCUBE IBCs. This further
supports our conclusion that the imported tubes do not have the
essential character of the UniCUBE IBC.

We also note that the tubes do not qualify as unassembled incomplete
steel cages for the UniCUBE IBCs under GRI 2(a) because they are not
imported in sets or units that have the essential character of the steel
cages. Protestant argues that Customs should recognize that the tubes
are designed and manufactured for the purpose of making steel cages for
the UniCUBE IBCs. Protestant further maintains that the steel tubes are
only shipped in uniform lengths because it is easier and cheaper to
transport them that way. Transporting the tubes in this manner maximizes
container space and minimizes freight charges. It also reduces the time,
expenses and other problems associated with packing, forklift handling,
storage and inventory control of the unassembled containers. Because of
these conditions, protestant asks us to classify merchandise that is
contained in several different shipments as one article.

However, Customs has followed a long-standing rule that an article is to
be classified according to its condition as imported. See [XTC Products,
Inc. v. United States]{.underline}, 771 F. Supp. 401, 405 (1991). See
also, [United States v. Citroen]{.underline}, 223 U.S. 407 (1911), where
the Supreme Court stated that \"in order to produce uniformity in the
imposition of duties, the dutiable classification of articles must be
ascertained by an examination of the imported article itself, in the
condition in which it is imported.\" Customs has also applied a rule
derived from [United States v. Baldt Anchor]{.underline}, [Chain & Forge
Division of Boston Metals Co.]{.underline}, 59 CCPA 122, C.A.D. 1051,
429 F.2d 1403 (1972), and [Franklin Industries, Inc. v. United
States,]{.underline} 1 CIT 349, (1981), in which the courts held that to
enjoy classification under a single tariff item number, all components
necessary to establish the essential character of a particular article
must be imported in the same shipment. See HQ 963321, April 26, 2000.
Accordingly, we must classify based on the merchandise contained in each
shipment and will not aggregate the contents of several shipments
together to determine the classification of merchandise.

All the tubes that are used for making the steel cages of the UniCUBE
IBCs are not imported together in the same shipment, but the different
length tubes for making the steel cages are imported in separate
shipments. The tubes of only one length lack too many of the other items
that are involved in making the steel cages of the UniCUBE IBCs to be
considered as having the essential character of the steel cages. In
other words, the individual length tubes that are imported separately
are too far removed from the finished steel cages to have the essential
character of the finished steel cages of the UniCUBE IBC. Therefore, the
tubes must be classified separately. This is consistent with the
principle set forth in [Citroen]{.underline} and the other cases cited
above.

Although the steel tubes may be parts for the complete UniCUBE IBC, the
tariff provision for shipping containers for transporting fluids,
subheading 8609.00.00, HTSUS, does not provide for parts. Therefore, we
find that the imported steel tubes cannot be classified in subheading
8609.00.00, HTSUS. They are classified in subheading 7306.30.10, HTSUS
as: "Other tubes, pipes...: Other, welded, of circular cross section, of
iron or nonalloy steel: Having a wall thickness of less than 1.65 mm."

**HOLDING:**

The imported non-alloy steel tubes are classified in subheading
7306.30.10, HTSUS as: "Other tubes, pipes...: Other, welded, of circular
cross section, of iron or nonalloy steel: Having a wall thickness of
less than 1.65 mm."

You are instructed to DENY the protest. In accordance with Section
3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993,
Subject: Revised Protest Directive, you are to mail this decision,
together with the Customs Form 19, to the protestant no later than 60
days from the date of this letter. Any reliquidation of the entry in
accordance with the decision must be accomplished prior to mailing the
decision. No later than sixty (60) days from the date of this decision,
the Office of Regulations and Rulings will make the decision available
to CBP personnel, and to the public on the CBP Home Page on the World
Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and
other means of public distribution.

> Sincerely,
>
> Myles B. Harmon,
>
> Director, Commercial Rulings Division