HQ 555768: Request for relief from VRA certification requirements for certain stainless steel plate made in Belgium from U.S. stainless steel scrap Dear Mr. Meeks:

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 555768

                        November 7, 1990

CLA-2 CO:R:C:V  555768 GRV

CATEGORY:  Classification

Jeffrey A. Meeks, Esq.
Adduci, Mastriani, Meeks & Schill
330 Madison Avenue
New York, New York  10017

     RE:  Request for relief from VRA certification requirements
          for certain stainless steel plate made in Belgium from
          U.S. stainless steel scrap
     
Dear Mr. Meeks:

     This is in response to your letter of October 15, 1990, on
behalf of Charleroi (U.S.A.), requesting certain equitable relief
as a result of Charleroi's putative detrimental reliance on our
letter of July 2, 1990 (555604).

FACTS:

     By letter of February 27, 1990, Charleroi (U.S.A.) requested
that we "confirm" that: (1) a previous Headquarters Ruling Letter
(HRL) holding that U.S. steel scrap is an eligible article of
metal for purposes of item 806.30, Tariff Schedules of the United
States (TSUS) (the precursor provision to subheading 9802.00.60,
Harmonized Tariff Schedule of the United States (HTSUS)) would
apply to U.S. stainless steel scrap to be exported by Charleroi
to a European country (Belgium) for processing into stainless
steel plate or bands; (2) the returned steel products would not
be subject to applicable voluntary restraint agreement (VRA)
requirements; and (3) the returned products would be entitled to
the partial duty exemption under TSUS item 806.30.

     In our response of July 2, 1990, to Charleroi, we confirmed
that the previous HRL concerning the eligibility of U.S. steel
scrap for TSUS item 806.30 treatment would be applicable to
Charleroi's proposed transaction.  However, we further stated
that, without more specific information regarding the processing
operations to be performed in the U.S., we were unable to provide
a definitive ruling that the returned steel products would be
entitled to HTSUS subheading 9802.00.60 treatment.  In regard to
VRA requirements, we stated the following:
     
          Assuming the returned articles of metal qualify for the
     partial duty exemption under HTSUS subheading 9802.00.60,
     the enclosed copy of C.S.D. 89-128 addresses your inquiry
     regarding compliance with any applicable VRA requirements.

     C.S.D. 89-128 dated September 6, 1989 (HRL 554965), a ruling
addressed to another steel importer, concerned U.S. stainless
steel strip and coil processed in Europe into pipe and sheet and
returned for further processing.  Based on the specific
descriptive information provided by the importer concerning the
foreign and domestic manufacturing processes to be performed, we
held that the returned steel products would be entitled to HTSUS
subheading 9802.00.60 treatment.  We also stated that:

     ... although the products may be subject to ... (VRAs) the
     U.S. has with Spain and other European countries, the
     articles may be entered under HTSUS subheading 9802.00.60
     without an export certificate, provided all requirements
     for entry under that subheading are met.

     You state that based on the "seemingly clear statement" in
our July 2, 1990, letter, Charleroi placed orders to purchase
3,000 tons of stainless steel scrap, solicited orders totaling
1119.25 metric tons (MT) of stainless steel plate, and began
shipping the steel scrap to Belgium for processing into plate. 
When the first shipments totaling 122.45 MT of steel plate
arrived in the U.S., our district office in Philadelphia advised
that a VRA export certificate was required.  You contend that
Customs "sudden reversal of position regarding VRA license
exemption for" came as a "complete surprise" to your client and
caused extremely significant damages, exceeding $4 to $5 million.

     You assert that, in recognition of the sensitivity of steel
imports--particularly in regard to VRA limitations--, Charleroi
has consistently attempted to determine the classification and
entry requirements for imported steel products.  In this
connection, you point out that your client requested a ruling
from Customs in 1989 regarding the applicability of HTSUS
subheading 9802.00.60 and VRA requirements to stainless steel
plate produced in Belgium from U.S. slab.  You characterize our
response (HRL 084776 dated September 21, 1989) as holding that
the stainless steel plate is classified under HTSUS subheading
9802.00.60 and that plate processed in this manner and returned
to the U.S. under this subheading would not be subject to VRA
requirements.  

     As a result of your client's alleged detrimental reliance on
our July 2, 1990, letter, you maintain that Customs is obliged to
grant equitable relief in the form of permitting the entry of the
stainless steel plate which has been completed or is in the final
stages of completion (totaling 1119.225 MT) without the
requirement of a VRA license and without charging the product to
existing VRA levels for the European Community.

LAW AND ANALYSIS:

     Section 177.9(d)(2), Customs Regulations (19 CFR
177.9(d)(2)), provides that there shall be no retroactive
application of a revoked or modified ruling with respect to the
person to whom the ruling was issued, provided:

     (i)  The request for a ruling contained no misstatement or
          omission of material facts;

     (ii) The facts subsequently developed are not materially
          different from the facts on which the ruling was based;

     (iii)There has been no change in the applicable law; 

     (iv) The ruling was originally issued with respect to a
          prospective transaction; and

     (v)  All of the parties involved in the transaction acted in
          good faith in reliance upon the ruling and retroactive
          modification or revocation would be to their detriment.

     Section 177.1(d)(1), Customs Regulations (19 CFR
177.1(d)(1)), defines "ruling" as "... a written statement issued
by the Headquarters Office ... that interprets and applies the
provisions of the Customs and related laws to a specific set of
facts."  According to 19 CFR 177.1(d)(2), an "information letter"
is "a written statement issued by the Customs Service that does
no more than call attention to a well-established interpretation
or principle of Customs law, without applying it to a specific
set of facts."  Among the circumstances set forth in this
regulation under which it is appropriate to issue an "information
letter" is when "the request is incomplete or otherwise fails to
meet the requirements set forth in this part."

     There appears to be no question in this case that our July
2, 1990, letter constitutes an "information letter" rather than a
"ruling" since it explicitly states that "we are unable to give 
you a definitive ruling that the" plate would be entitled to
HTSUS subheading 9802.00.60 treatment "without more specific
information regarding the processing operations to be performed
in the U.S."  For this reason, as well as those discussed below,
it is our opinion that the provisions of 19 CFR 177.9(d)(2),
restricting the retroactive application of a modified or revoked
ruling, are inapplicable to the circumstances of this case.

      Headquarters telex dated October 8, 1986, to Customs field
offices and all interested parties indicates that steel products
subject to a restraint agreement and entered under HTSUS
subheading 9802.00.60 are exempt from VRA requirements only if
(1) the U.S. product exported from the U.S. is in the form of an
arrangement product, and (2) all the conditions and documentation
requirements of HTSUS subheading 9802.00.60 are satisfied. 
Because stainless steel scrap is not an arrangement product, the
first criterion set forth above is not met.  Therefore, when U.S.
scrap is exported and later returned in the form of an
arrangement product, an export certificate is required even
though the product may satisfy all the requirements for entry
under HTSUS subheading 9802.00.60.  

     C.S.D. 89-128, which was referenced in our July 2, 1990,
letter, involved U.S. stainless steel strip and coil (arrangement
products) which were processed in Europe into pipe and sheet and
returned to the U.S. for further processing.  As we determined in
that ruling that the returned metal products satisfied the
conditions for entry under HTSUS subheading 9802.00.60, we
advised that no export certificate was required.  Thus, both
prerequisites for an exemption from VRA certification were
satisfied in C.S.D. 89-128.  

     In light of the above discussion, it is important to
reiterate that our July 2, 1990, letter to Charleroi specifically
declined to rule on the applicability of HTSUS subheading
9802.00.60 to the stainless steel plate in the absence of certain
material information.  This necessary additional information was 
not subsequently provided and, as a result, this office has yet
to rule that the steel plate is entitled to classification under
this tariff provision.  Thus, even though an export certificate
was required because the first criterion for an exemption was not
satisfied, Charleroi's failure to favorably and definitively
resolve the second criterion militates against a finding that
your client "justifiably relied" on our July 2, 1990, information
letter.  

     The importance of a definitive ruling on the eligibility of
a product for HTSUS subheading 9802.00.80 treatment, in terms of
the product's VRA status, was emphasized in our ruling letter to
Charleroi dated September 21, 1989 (HRL 084776).  That case
concerned the classification and VRA status of U.S. stainless
steel slab (an arrangement product) processed abroad into steel
plate and returned.  We stated in HRL 084776 that "[t]he
applicability of this subheading [9802.00.60] may affect both the
VRA status and the dutiable value of the stainless steel plates." 
Contrary to your characterization of the holding in HRL 084776,
we concluded as follows:

     We do not have sufficient information to rule that the
     plates are subject to 'further processing' in the United 
     States within the meaning of subheading 9802.00.60, HTSUS.
     Therefore, the stainless steel plates are subject to the
     VRA export certification requirements and are subject to
     duty on their full value.  (Emphasis added).

In response to that ruling, Charleroi provided additional
information concerning the domestic further processing of the
returned plate made from U.S. slab.  However, because Charleroi
again failed to specify precisely the further processing, our
subsequent letter to Charleroi (HRL 555572 dated April 27, 1990)
conditionally held that the steel plate would be eligible for
HTSUS subheading 9802.00.60 treatment "if the further processing
in this country consists of more than mere assembly and includes
a change in shape or other characteristics of the metal ...."
No mention was made in HRL 555572 regarding the VRA status of the
steel plate.

     The documentation filed by your client with Customs in
Philadelphia in connection with the entry of stainless plate made
from U.S. scrap includes a bill of lading which reflects that
982.09 MT of U.S. scrap was exported from the U.S. to Belgium on
May 22, 1990.  The fact that the subject information letter to
Charleroi was issued more than a month later (July 2, 1990),
clearly contradicts your assertion that, "based on" our letter,
Charleroi placed orders to purchase 3,000 tons of steel scrap.   
Moreover, assuming its correctness, this information profoundly
calls into question your client's "good faith" reliance on our
July 2, 1990, letter.

HOLDING:

     For the reasons set forth above, it is our opinion that
Charleroi did not justifiably rely to its detriment on our
information letter of July 2, 1990.  Therefore, we find that no
recommendation for equitable relief from VRA certification
requirements is warranted in this case.

                           Sincerely,



                           John Durant, Director