HQ 084538: Cold Finished Steel Bar Processed in Canada From Hot Rolled Bar and Wire Rod; Country of Origin.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                      HQ 084538


                                      July 26, 1989

          CLA-2:CO:R:C:G   084538 JAS

          CATEGORY:   Country of Origin

          TARIFF NO.: None

          Alexander W. Sierck, Esq.
          Beveridge & Diamond, P.C.
          1333 New Hampshire Avenue, N.W.
          Washington, D.C.  20036

          RE:  Cold Finished Steel Bar Processed in Canada From Hot
               Rolled Bar and Wire Rod; Country of Origin.

          Dear Mr. Sierck:

               In your letter of January 4, 1989, as supplemented, on
          behalf of Laurel Steel Products, Burlington, Ontario, you inquire
          as to the country of origin of cold finished carbon steel bars.
          There is no issue of tariff classification.  The questions you
          have raised concerning country of origin marking are the subject
          of a separate response.

               This ruling is confined to cold finished bars in square and
          hexagonal dimensions.  The tariff status of Laurel's cold
          finished round bars addressed in our rulings 083236 and 084538,
          both dated May 16, 1989..

          FACTS:

               The cold finished steel bars at issue here are made from hot
          rolled carbon steel bars and shipped to Canada from various EC
          countries.  This is leaded, free machining steel which conforms
          to ASTM designations A-575 and A-576 (consolidated in designation
          A-29), and contains the required percentages of carbon, manga-
          nese, phosphorus, sulfur, and lead specified in AISI series 1211
          through and including 12L14.

               In Canada the steel is acid cleaned, rinsed, dipped in lime
          and baked.  This is equivalent to mechanical descaling.  It is
          then uncoiled and drawn once through a tungsten carbide die,
          after which it is magnetic tested for surface defects, straight-
          ened, and cut to customer-ordered lengths, typically 12 feet.















                                     - 2 -

               Your submissions of January 6 and 24, and March 14, 1989,
          indicate the processing increases the tensile strength of the
          bars from approximately 75,000 psi. to between 85,000 and 100,000
          psi., with the actual drawing taking about 1 minute per bar.  The
          Canadian processing adds approximately 25 percent to the cost of
          the hot rolled bar and reduces its cross-sectional area between 4
          to 21 percent.

               Standard quality cold finished carbon steel bars resulting
          from this processing conform to ASTM designation A-108.  They are
          suitable for machining into cogs, gears, fasteners, automotive
          parts, plumbing fixtures, and other parts, as well as for
          subsequent heat treatment and for use in as-finished condition in
          the construction industry.

          ISSUE:

               What is the country of origin of the cold finished steel
          bar?

          LAW AND ANALYSIS:

               In order for the hot rolled bar entering Canada to have been
          considered substantially transformed there, the record must
          establish that the processing in Canada resulted in a product
          other than or materially different from the merchandise that
          entered Canada.  A new and different article must emerge from the
          processing, one having a new name, character or use.  Anheuser-
          Busch Brewing Association v. United States, 207 U.S. 556 (1908),
          and subsequent cases.

               In this case, the reduction in cross-sectional area is
          minimal and is in the nature of a finishing process which imparts
          the final dimensional tolerances and consistency of mechanical
          properties.  This processing does not dedicate the product to a
          use or uses for which it was unsuited in its condition as hot
          rolled bar.  In addition, the value added is relatively small.
          While the processing increases the tensile strength of the cold
          finished bar, the parameters of the strength increase were
          metallurgically predetermined in the creation of the steel billet
          and very specifically through the fabrication of the hot rolled
          bar.

               The record here supports a finding that no significant or
          material change in character or use occurs in the hot rolled bar
          as a result of the drawing operation.   
















                                     - 3 -

          HOLDING:

               Cold finished steel bars imported 0.1590 through and
          including 2.5000 inches in cross-sectional diameter, processed as
          described in the facts from 0.218 inch to 2.562 inch hot rolled
          bar, are not substantially transformed in Canada and are products
          of the EC countries where the hot rolled bar originated.

               This ruling applies both for country of origin marking
          purposes and for purposes of the steel restraints.  Moreover, we
          note that the cold finished steel bars processed as indicated are
          not originating goods under the origin rules of the United
          States-Canada Free-Trade Agreement.



                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division







































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