What Every Member of the 

Trade Community Should Know About: 

Waste & Scrap as it 

Relates to Base 

Metals of Chapter 81 

AN INFORMED COMPLIANCE PUBLICATION 

FEBRUARY 2008
Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

NOTICE:

This publication is intended to provide guidance and information to the trade community. 

It reflects the position on or interpretation of the applicable laws or regulations by U.S. 

Customs and Border Protection (CBP) as of the date of publication, which is shown on 

the front cover. It does not in any way replace or supersede those laws or regulations. 

Only the latest official version of the laws or regulations is authoritative. 

Publication History 

First Published: June 1998 

Revised March 2004 

Reviewed with No Changes May 2005 

Reviewed with No Changes March 2006 

Reviewed with No Changes February 2008 

PRINTING NOTE: 

This publication was designed for electronic distribution via the CBP website 

(http://www.cbp.gov) and is being distributed in a variety of formats. It was originally set 

up in Microsoft Word97®. Pagination and margins in downloaded versions may vary 

depending upon which word processor or printer you use. If you wish to maintain the 

original settings, you may wish to download the .pdf version, which can then be printed 

using the freely available Adobe Acrobat Reader®. 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

PREFACE 

On December 8, 1993, Title VI of the North American Free Trade Agreement Implementation 

Act (Pub. L. 103-182, 107 Stat. 2057), also known as the Customs Modernization or “Mod” Act, 

became effective. These provisions amended many sections of the Tariff Act of 1930 and 

related laws. 

Two new concepts that emerge from the Mod Act are “informed compliance” and “shared 

responsibility,” which are premised on the idea that in order to maximize voluntary compliance 

with laws and regulations of U.S. Customs and Border Protection, the trade community needs to 

be clearly and completely informed of its legal obligations. Accordingly, the Mod Act imposes a 

greater obligation on CBP to provide the public with improved information concerning the trade 

community's rights and responsibilities under customs regulations and related laws. In addition, 

both the trade and U.S. Customs and Border Protection share responsibility for carrying out 

these requirements. For example, under Section 484 of the Tariff Act, as amended (19 U.S.C. 

1484), the importer of record is responsible for using reasonable care to enter, classify and 

determine the value of imported merchandise and to provide any other information necessary to 

enable U.S. Customs and Border Protection to properly assess duties, collect accurate 

statistics, and determine whether other applicable legal requirements, if any, have been met. 

CBP is then responsible for fixing the final classification and value of the merchandise. An 

importer of record’s failure to exercise reasonable care could delay release of the merchandise 

and, in some cases, could result in the imposition of penalties. 

Regulations and Rulings (RR) of the Office of International Trade has been given a major role in 

meeting the informed compliance responsibilities of U.S. Customs and Border Protection. In 

order to provide information to the public, CBP has issued a series of informed compliance 

publications on new or revised requirements, regulations or procedures, and a variety of 

classification and valuation issues. 

This publication, prepared by the National Commodity Specialist Division of Regulations and 

Rulings is entitled "Waste & Scrap as it Relates to Base Metals of Chapter 81”. It provides 

guidance regarding the classification of these items. We sincerely hope that this material, 

together with seminars and increased access to rulings of U.S. Customs and Border Protection, 

will help the trade community to improve voluntary compliance with customs laws and to 

understand the relevant administrative processes. 

The material in this publication is provided for general information purposes only. Because 

many complicated factors can be involved in customs issues, an importer may wish to obtain a 

ruling under Regulations of U.S. Customs and Border Protection, 19 C.F.R. Part 177, or to 

obtain advice from an expert who specializes in customs matters, for example, a licensed 

customs broker, attorney or consultant. 

Comments and suggestions are welcomed and should be addressed to the Executive Director, 

Regulations and Rulings, Office of International Trade, U.S. Customs and Border Protection, 

1300 Pennsylvania Avenue, NW, (Mint Annex), Washington, D.C. 20229. 

Sandra L. Bell 

Executive Director, Regulations and Rulings 

Office of International Trade 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

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INTRODUCTION..........................................................................................7

GENERAL OVERVIEW ...............................................................................7

QUESTIONS TO ASK .................................................................................9

CONCLUSION.............................................................................................9

ADDITIONAL INFORMATION...................................................................11

The Internet................................................................................................................ 11

Customs Regulations ................................................................................................. 11

Customs Bulletin ........................................................................................................ 11

Importing Into the United States................................................................................. 12

Informed Compliance Publications............................................................................. 12

Value Publications...................................................................................................... 13

“Your Comments are Important”................................................................................. 14

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

INTRODUCTION 

Chapter 81 of the Harmonized Tariff Schedule of the United States (HTSUS) covers the 

base metals not covered by the preceding chapters of Section XV (chapters 72-80), 

cermets (bonded mixtures of ceramic material and metal), and articles thereof. The 

base metals covered by chapter 81 are tungsten (wolfram), molybdenum, tantalum, 

magnesium, cobalt, bismuth, cadmium, titanium, zirconium, antimony, manganese, 

beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium 

(columbium), rhenium, and thallium. 

Waste and scrap of the base metals of chapter 81, except for tungsten, are free of duty 

(if entitled to column 1 treatment). The term “waste and scrap” has taken on various 

meanings. Webster’s II New Riverside University Dictionary defines “waste” as “a 

worthless or useless by-product.” The American Society for Metals Handbook (8th 

Edition) defines “scrap” as a “defective product not suitable for sale. Discarded metallic 

material from whatever source that may be reclaimed through melting or refining.” In 

HQ 555096 (July 7, 1989), the two types of scrap acquired and processed by scrap 

yards into commercial scrap were described by the protestant as “obsolete scrap (wornout or discarded metal articles) and industrial scrap (leftover material from 

manufacturing operations performed on metal articles.” However, Clipper Belt Lacer 

Co., Inc. v. United States, 14 CIT 146, 153 (1990), noted that “[i]t is not enough that an 

article be called a tariff term in the trade vernacular. There must be a showing that the 

article embodies the salient characteristics of the tariff term claimed.” 

This document will discuss which “salient characteristics” Customs believes must be 

present in order for a product to be classified as waste or scrap, the application of Note 

8(a) to Section XV, and the application of the Harmonized Commodity Description and 

Coding System Explanatory Notes (EN’s) to heading 7204. 

GENERAL OVERVIEW 

With respect to the base metals and articles covered by Section XV, the definition for 

waste and scrap is provided by Note 8(a) to Section XV as “[m]etal waste and scrap 

from the manufacture or mechanical working of metals, and metal goods definitely not 

usable as such because of breakage, cutting-up, wear or other reasons.” Except for 

tungsten (wolfram), molybdenum, and magnesium (the EN’s for which headings contain 

additional guidance for identifying the waste and scrap of those headings, as further 

explained below), this is the only definition provided by the HTSUS to guide us in 

making a waste or scrap determination under chapter 81. 

Note 8(a) refers to fragments of stock such as shavings, grinding, chips, and similar 

insignificantly-sized pieces which result from a manufacture or mechanical working 

operation. It also covers worn-out or broken metal articles no longer usable as such. If 

the imported article continues to conform to a recognized commercial specification, then 

it would be “usable as such” and would not fit the waste and scrap definition of Note 

8(a). Similarly, if the result of a manufacture or mechanical working operation is a 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

product which has the “salient characteristics” of another tariff term, such as “powder” or 

“unwrought,” then it would not be considered waste or scrap. Note 8(a) does not cover 

any product which has been melted or cast into ingots, blocks, etc., even if it previously 

consisted of materials (e.g., shavings or grindings) which would have been considered 

scrap. Such articles are considered to be “unwrought” and are to be classified as such 

(see Additional U.S. Note 1 to Section XV). 

The Explanatory Notes (EN’s) for headings 8101 (tungsten (wolfram)), 8102 

(molybdenum), and 8104 (magnesium) refer to the description of waste and scrap 

provided by the EN’s for heading 7204 (ferrous waste and scrap). The EN’s for heading 

7204 refer to the definition of waste and scrap provided by Note 8(a) to Section XV and 

describe the forms the waste and scrap covered by that heading generally take, 

including crop ends, filings, turnings, and similar residue from the manufacture or 

mechanical working of iron or steel. In the case of end portions, the EN’s provide no 

dimensional limitations for classification as waste or scrap, but it is clear that the end 

portions so classified cannot be those which would fit another tariff description (i.e., 

have the “salient characteristics” of another tariff description). The EN’s for heading 

7204 also provide that the waste and scrap of that heading do not include “articles 

which, with or without repair or renovation, can be re-used for their former purposes or 

can be adapted for other uses.” Also excluded as waste and scrap are articles which 

“can be refashioned into other goods without first being recovered as metal.” Again, if 

the imported article conforms to an industry standard or meets a recognized commercial 

standard, it could not be classified as waste or scrap. Only if the article must first be 

remelted or subjected to chemical or similar processes in order to prepare or separate 

its metal properties for subsequent use would it be considered waste or scrap. 

The EN’s for heading 8104 (magnesium) also specify that, with respect to raspings, 

turnings, or granules of magnesium, such articles will only be considered waste or scrap 

if they have not been graded or sorted according to size. When such articles have been 

graded or sorted according to size, they are classified under the 8104 subheading 

specifically referring to such articles. 

To recap, no ingots, pigs, or other cast forms will be considered waste or scrap under 

chapter 81, HTSUS. To be considered waste or scrap, an article must be the byproduct of a manufacture or mechanical working of the metal, or a defective article 

which is worn, broken, or cut-up and is not able to be repaired, renovated, or adapted to 

other uses without first having its metal properties recaptured. In the case of 

magnesium, the by-product raspings, turnings, or granules cannot be graded or sorted 

according to size. 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

QUESTIONS TO ASK 

1. How was this scrap obtained? 

Is it a product derived from the manufacture or mechanical workings of the 

metal which in its imported condition: 

-cannot be used for its intended purpose or metal properties? 

-does not meet any other tariff definition other than waste and 

scrap? 

Is the imported product recognizable as a worn out or broken article of 

metal definitely not usable as such because of breakage, cutting-up, wear 

or other reasons, which would only fit the waste and scrap tariff definition? 

2. Does the imported product need to be melted down in order to eliminate the 

impurities or to capture its metal properties before it can be utilized within a 

manufacturing process? 

3. Does the imported product meet the scrap standard specifications of the Institute 

of Scrap Recycling Industries, Inc., 1325 G Street, N.W., Suite 1000, 

Washington, DC 20005 (202-737-1770)? 

4. Is the imported product in ingot or other cast form? 

5. Does the imported product conform to an industry standard or specification for 

the particular metal? 

6. Does the imported product meet another tariff definition such as an unwrought 

product or cermet? 

A yes answer to 1, 2 and/or 3 would indicate the product most likely would be properly 

classified as waste and scrap. A yes answer to 4, 5 and/or 6 would most likely eliminate 

the product from being classified as waste and scrap of base metal within chapter 81. 

CONCLUSION 

If the imported product is manufactured to a standard or is of high purity, it would be 

very unlikely that it would meet the “salient characteristics” of waste and scrap. An ingot 

or other similar unwrought form cast from remelt waste and scrap, would not be eligible 

for classification as waste and/or scrap within chapter 81. If the shipment, however, 

consists of fragments of stock, removed during manufacturing or mechanical working of 

the metal or the shipment consists of various broken, cut-up or worn out articles of base 

metal, and the metal is not usable as such, the merchandise would have taken on the 

“salient characteristics” of waste and scrap. 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

It is important to exercise reasonable care when classifying imported products. If there 

is ever any question as to whether the product will meet the “salient characteristics” of 

waste and scrap, a U.S. Customs and Border Protection office can be contacted to 

discuss the matter. To receive a written response to classification questions, follow the 

guidelines of Part 177 of the Customs Regulations for a binding ruling and submit the 

request to The Bureau of Customs and Border Protection, Customs Information and 

Exchange, 10th Floor, One Penn Plaza, New York, NY 10119. 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

ADDITIONAL INFORMATION 

The Internet 

The home page of U.S. Customs and Border Protection on the Internet’s World Wide 

Web, provides the trade community with current, relevant information regarding CBP 

operations and items of special interest. The site posts information -- which includes 

proposed regulations, news releases, publications and notices, etc. -- that can be 

searched, read on-line, printed or downloaded to your personal computer. The web site 

was established as a trade-friendly mechanism to assist the importing and exporting 

community. The web site also links to the home pages of many other agencies whose 

importing or exporting regulations that U.S. Customs and Border Protection helps to 

enforce. The web site also contains a wealth of information of interest to a broader 

public than the trade community. For instance, the “Know Before You Go” publication 

and traveler awareness campaign is designed to help educate international travelers. 

 

The web address of U.S. Customs and Border Protection is http://www.cbp.gov

Customs Regulations 

The current edition of Customs and Border Protection Regulations of the United States 

is a loose-leaf, subscription publication available from the Superintendent of 

Documents, U.S. Government Printing Office, Washington, DC 20402; telephone (202) 

512-1800. A bound edition of Title 19, Code of Federal Regulations is also available for 

sale from the same address. All proposed and final regulations are published in the 

Federal Register, which is published daily by the Office of the Federal Register, National 

Archives and Records Administration, and distributed by the Superintendent of 

Documents. Information about on-line access to the Federal Register may be obtained 

by calling (202) 512-1530 between 7 a.m. and 5 p.m. Eastern time. These notices are 

also published in the weekly Customs Bulletin described below. 

Customs Bulletin 

The Customs Bulletin and Decisions (“Customs Bulletin”) is a weekly publication that 

contains decisions, rulings, regulatory proposals, notices and other information of 

interest to the trade community. It also contains decisions issued by the U.S. Court of 

International Trade, as well as customs-related decisions of the U.S. Court of Appeals 

for the Federal Circuit. Each year, the Government Printing Office publishes bound 

volumes of the Customs Bulletin. Subscriptions may be purchased from the 

Superintendent of Documents at the address and phone number listed above. 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

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Importing Into the United States 

This publication provides an overview of the importing process and contains general 

information about import requirements. The current edition of Importing Into the United 

States contains much new and revised material brought about pursuant to the Customs 

Modernization Act (“Mod Act”). The Mod Act has fundamentally altered the relationship 

between importers and U.S. Customs and Border Protection by shifting to the importer 

the legal responsibility for declaring the value, classification, and rate of duty applicable 

to entered merchandise. 

The current edition contains a section entitled "Informed Compliance." A key component 

of informed compliance is the shared responsibility between U.S. Customs and Border 

Protection and the import community, wherein CBP communicates its requirements to 

the importer, and the importer, in turn, uses reasonable care to assure that CBP is 

provided accurate and timely data pertaining to his or her importation. 

Single copies may be obtained from local offices of U.S. Customs and Border 

Protection, or from the Office of Public Affairs, U.S. Customs and Border Protection, 

1300 Pennsylvania Avenue NW, Washington, DC 20229. An on-line version is 

available at the CBP web site. Importing Into the United States is also available for 

sale, in single copies or bulk orders, from the Superintendent of Documents by calling 

(202) 512-1800, or by mail from the Superintendent of Documents, Government Printing 

Office, P.O. Box 371954, Pittsburgh, PA 15250-7054. 

Informed Compliance Publications 

U.S. Customs and Border Protection has prepared a number of Informed Compliance 

publications in the “What Every Member of the Trade Community Should Know 

About:...” series. Check the Internet web site http://www.cbp.gov for current 

publications. 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

Value Publications 

Customs Valuation under the Trade Agreements Act of 1979 is a 96-page book 

containing a detailed narrative description of the customs valuation system, the customs 

valuation title of the Trade Agreements Act (§402 of the Tariff Act of 1930, as amended 

by the Trade Agreements Act of 1979 (19 U.S.C. §1401a)), the Statement of 

Administrative Action which was sent to the U.S. Congress in conjunction with the TAA, 

regulations (19 C.F.R. §§152.000-152.108) implementing the valuation system (a few 

sections of the regulations have been amended subsequent to the publication of the 

book) and questions and answers concerning the valuation system. 

Customs Valuation Encyclopedia (with updates) is comprised of relevant statutory 

provisions, CBP Regulations implementing the statute, portions of the Customs 

Valuation Code, judicial precedent, and administrative rulings involving application of 

valuation law. A copy may be purchased for a nominal charge from the Superintendent 

of Documents, Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-

7054. This publication is also available on the Internet web site of U.S. Customs and 

Border Protection. 

The information provided in this publication is for general information 

purposes only. Recognizing that many complicated factors may be 

involved in customs issues, an importer may wish to obtain a ruling under 

CBP Regulations, 19 C.F.R. Part 177, or obtain advice from an expert 

(such as a licensed Customs Broker, attorney or consultant) who 

specializes in customs matters. Reliance solely on the general 

information in this pamphlet may not be considered reasonable care.

Additional information may also be obtained from U.S. Customs and Border Protection 

ports of entry. Please consult your telephone directory for an office near you. The 

listing will be found under U.S. Government, Department of Homeland Security. 

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Waste & Scrap as it Relates to Base Metals of Chapter 81 

February 2008 

“Your Comments are Important” 

The Small Business and Regulatory Enforcement Ombudsman and 10 regional 

Fairness Boards were established to receive comments from small businesses about 

Federal agency enforcement activities and rate each agency’s responsiveness to small 

business. If you wish to comment on the enforcement actions of U.S. Customs and 

Border Protection, call 1-888-REG-FAIR (1-888-734-3247). 

REPORT SMUGGLING 1-800-BE-ALERT OR 1-800-NO-DROGA 

Visit our Internet web site: http://www.cbp.gov

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