HQ 953601: ylindrical solidpieces of metal about one third the height of a finishedcartridge case with a shallow depression to simulate a cup.

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 953601 

                           May 14, 1993

CLA-2:R:C:M  953601 DFC

CATEGORY:  Classification

TARIFF NO.:  9306.30.40;  9305.29.50

Aubrey G. White 
President and CEO
Imperial Magnum Corporation
P.O. Box 249
Oroville, WA  98844

Dear Mr. White: 
     
     In a letter dated March 1, 1993, you inquired as to the
tariff classification under the Harmonized Tariff Schedule of the
United States (HTSUS), of unprimed brass cartridge cases and
rifle barreled actions. 

FACTS:

     The cartridge cases will be manufactured in Venezuela from
brass cups of U.S. origin.  Brass cups are cylindrical solid
pieces of metal about one third the height of a finished
cartridge case with a shallow depression to simulate a cup.  

     The rifle barreled actions will be manufactured in Finland. 
The term "action" is defined as the breech mechanism of a firearm
by which it is loaded, fired and unloaded.  The drawing submitted
with the inquiry shows that the action is permanently fitted with
a barrel, forged or welded as (opposed to a screwed in barrel).

ISSUE:

     Whether the brass cartridge cases from Venezuela are
entitled to duty-free treatment under the Generalized System of
Preferences (GSP)? 

LAW AND ANALYSIS:

     Under the GSP, eligible articles the growth, product or
manufacture of a designated beneficiary developing country (BDC)
which are imported directly into the customs territory of the
U.S. from a BDC may receive duty-free treatment if the sum of 1)
the cost or value of materials produced in the BDC, plus 2) the
direct costs of the processing operations in the BDC, is
equivalent to at least 35% of the appraised value of the article 
 
                               -2- 
 
 at the time of entry.  See 19 U.S.C. 2463(b). 

     Where an article is produced from materials imported into
the BDC, as in this case, the article is considered to be a
"product of" the BDC for purposes of the GSP only if those
materials are substantially transformed into a new or different
article of commerce.  "[A] substantial transformation occurs when
an article emerges from a manufacturing process with a name,
character, or use which differs from those of the original
material subjected to the process."  Torrington Co. v. United
States, 764 F.2d 1563, 1568, 3 CAFC 158, 163 (Fed. Cir. 1985).

     The cost or value of materials which are imported into the
BDC to be used in the production of the article, as here, may be
included in the 35% value-content computation only if the
imported materials undergo a double substantial transformation in
the BDC.  That is, the brass cups of U.S. origin must be
substantially transformed in Venezuela into a new and different
intermediate article of commerce, which is then used in Venezuela
in the production of the final article-- the brass cartridge
cases.  See section 10.177(a), Customs Regulations (19 CFR
10.177(a), and Azteca Milling Co. v. United States, 703 F. Supp.
949 (CIT 1988), aff'd 890 F.2d 1150 (Fed. Cir. 1989). 

     Venezuela is a BDC.  See General Note 3(c)(ii)(A), HTSUS. 
Moreover, the applicable tariff classification of the cartridge
cases, subheading 9306.30.40, HTSUS, is a GSP eligible provision. 
Therefore, the cartridge cases will receive duty-free treatment
under the GSP if they are "products of" Venezuela, the 35% value-
content requirement is satisfied, and they are imported directly
to the U.S. from Venezuela.  

     The forming of the brass cartridge cases in Venezuela from
the U.S. origin brass cups clearly results in a substantial
transformation of the cups into new or different articles of
commerce which are considered "products of" Venezuela.  However,
based on the information provided, it does not appear that a
double substantial transformation results from the foreign
forming process.  Therefore, the cost or value of the brass cups
may not be counted toward the 35% requirement.
  
                         Rifle Actions  

     It is our position that the rifle barreled actions are
classifiable under subheading 9305.29.50, HTSUS, which provides
for parts and accessories, of rifles, other.








                               -3-
HOLDING:

     The unprimed brass cartridge cases are classifiable under
subheading 9306.30.40, HTSUS, which provides for cartridges and
parts thereof, cartridges and empty cartridge shells.  The
applicable column 1 rate of duty for this provision is 5% ad
valorem.  

     The brass cartridge cases are considered "products of"
Venezuela.  Therefore, they will be entitled to duty-free
treatment under the GSP if they are imported directly from that
country and the sum of the cost or value of any materials
produced in Venezuela plus the direct processing costs incurred
there equals or exceeds 35% of the appraised value of the
imported cartridge cases.

     The rifle barreled actions are classifiable under subheading
9305.29.50, HTSUS, with duty at the rate of 3.6% ad valorem. 
 

                                   Sincerely,


                                   John Durant, Director
                                   Commercial Rulings Division