HQ 556181

January 7, 1992

CLA-2 CO:R:C:S 556181 DSN

CATEGORY: Classification

TARIFF NO.: 9802.00.60

Mr. Charles Owen Verrill, Jr.

Ms. Eileen P. Bradner

Wiley, Rein & Fielding

1776 K Street, N.W.

Washington, D.C. 20006

RE: Applicability of partial duty exemption to galvanized round

wire from Canada; further processing; 555915; 555620;

554965; 543665; C.S.D. 84-89

Dear Mr. Verrill:

This is in response to your letter of August 7, 1991, on

behalf of Georgetown Wire Company, Inc., requesting a ruling on

the applicability of subheading 9802.00.60, Harmonized Tariff

Schedule of the United States (HTSUS), to certain wire building

material products imported from Canada. Samples and a video were

submitted for examination.

FACTS:

Your client intends to purchase round galvanized wire from

Canadian producers. This galvanized wire is produced from carbon

steel wire rod of U.S.-origin. In Canada, the U.S. wire rod is

chemically cleaned, descaled, coated, drawn through dies,

annealed, and galvanized to produce round wire which is suitable

for manufacture into welded wire mesh or woven wire netting to be

used in the construction industry.

The galvanized wire is imported into the U.S. in coils.

Welded wire mesh consists of welded wire, carrier sheet of

absorbent paper and backing sheet of waterproof or water-

resistant paper. In the U.S., the galvanized wire coils are

placed on stands behind a fabricating machine. The carrier

paper, which is received on rolls, is printed and the printed

paper is then slotted and cut into sheets. The sheets are placed

on the fabricating machine and wires, referred to as \"linewires,\"

are fed lengthwise into the machine. The carrier paper is then

pulled in over the linewires. As the paper is being pulled

forward, more wire, referred to as \"crosswire,\" is fed in across

the top of the carrier paper at right angles to the linewires.

The crosswire is positioned so that the linewires cross at the

point where the carrier sheets are slotted. Welding heads make

contact at this point and the wires are welded, sandwiching the

carrier sheet between the crosswire and linewires. When the

welding heads are released, another crosswire is fed in and the

welding process is repeated. When the product reaches a certain

length, it is sheared off and removed from the machine.

The sheets are placed on a laminator and glue is applied to

the carrier paper sandwiched in the welded wire fabric. A

waterproof paper sheet is then glued onto the fabricated sheet.

The sheets are then palletized and prepared for shipment.

You state that woven wire netting is manufactured in two

distinct types referred to as self-furred woven wire (SF) and

self-furred paper-backed woven wire (SFB). SF wire is in coils

and placed on stands. The wire is fed off the stands into the

machine. Wires are first formed and then fed into the twister

gears. The twister gears rotate, which twists the wires

together. As a result of this process, the individual wires

become an assembled wire fabric which is then lifted from the

twister gears and fed into the furring stage. The netting is

bent (furred) so that it can stand away from the wall on a

construction site. The finished product is then rolled, banded,

and palletized for shipment.

SFB wire is galvanized wire with waterproof paper attached.

The processing is the same as for the SF, except that the SFB

requires the addition of waterproof building paper to the

product. A carrier sheet is printed and perforated. Linewires

are fed which sandwiches the carrier paper between them and the

woven wire mesh. The linewires are attached to the woven mesh by

twisting them through the perforations in the carrier sheet.

Glue is applied to the waterproof paper which is attached to the

carrier sheet. The finished product is rolled up, banded and

palletized.

ISSUE:

Whether the galvanized round wire will be entitled to the

partial duty exemption under subheading 9802.00.60, HTSUS, when

imported to the U.S. from Canada.

LAW AND ANALYSIS:

Subheading 9802.00.60, HTSUS, provides a partial duty

exemption for:

\[a\]ny article of metal (as defined in U.S. note 3(d) of this

subchapter) manufactured in the United States or subjected

to a process of manufacture in the United States, if

exported for further processing, and if the exported

article as processed outside the United States, or the

article which results from the processing outside the

United States, is returned to the United States for further

processing.

This tariff provision imposes a dual \"further processing\"

requirement on eligible articles of metal\--one foreign, and when

returned, one domestic. Metal articles satisfying these

statutory requirements may be classified under this tariff

provision with duty only on the value of such processing

performed outside the U.S., provided there is compliance with the

documentary requirements of section 10.9, Customs Regulations (19

CFR 10.9).

In C.S.D. 84-89, 18 Cust. Bull. 957 (1983) we stated that:

\[f\]or purposes of item 806.30, TSUS, the term \'further

processing\' has reference to processing that changes the

shape of the metal or imparts new and different

characteristics which become an integral part of the metal

itself and which did not exist in the metal before

processing; thus, further processing includes machining,

grinding, drilling, threading, punching, forming, plating,

and the like, but does not include painting or the mere

assembly of finished parts by bolting, welding, etc.

(The precursor provision to subheading 9802.00.60, HTSUS, was

item 806.30, Tariff Schedules of the United States (TSUS)).

In this case, the galvanized round wire from Canada is an

eligible article of metal for purposes of subheading 9802.00.60,

HTSUS. The drawing and galvanizing processes performed in Canada

are considered \"further processing\" operations, as they impart

new and different characteristics which become an integral part

of the wire. See, Headquarters Ruling Letter (HRL) 555915 of

June 17, 1991, which held that galvanizing steel structural

components is an operation sufficient to comply with the \"further

processing\" requirement of subheading 9802.00.60, HTSUS.

We are of the opinion that the domestic operations to be

performed on the returned wire also constitute \"further

processing\" within the meaning of the statute. The cutting,

bending, shaping, and twisting operations are necessary further

fabrication processes that finish the wire products by imparting

new and different characteristics to the metal. See Headquarters

Ruling Letters (HRL\'s) 555620 of August 3, 1990; 554965 of

September 6, 1989; 543665 of January 9, 1986. However, please

note that the welding operation, if performed alone, would not

qualify as \"further processing\" as it is an assembly operation.

See C.S.D. 84-89.

HOLDING:

On the basis of the information submitted, it is our opinion

that the processes performed abroad and upon return to the U.S.

constitute \"further processing\" as that term is used in

subheading 9802.00.60, HTSUS. Therefore, the imported wire will

be entitled to entry under this tariff provision with duty only

on the cost or value of such processing performed outside the

U.S., upon compliance with the documentary requirements of 19

CFR 10.9.

Sincerely,

John Durant, Director

Commercial Rulings Division