HQ 081491: Recessed Cold Headed Screw Wire Processed from Hot Rolled Wire Rod

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 081491

                                        NOV 8, 1989

            CLA-2:CO:R:C:G    081491 JAS

            CATEGORY:   Classification

            TARIFF NO.: None

            James G. Meagley, Esq.
            Phillips, Lytle, Hitchcock, Blaine & Huber
            3400 Marine Midland Center
            Buffalo, New York 14203

            RE:  Recessed Cold Headed Screw Wire Processed from
                 Hot Rolled Wire Rod

            Dear Mr. Meagley:

                 In your letter of December 18, 1987, as supplemented, on
            behalf of Robertson-Whitehouse, Milton, Ontario, Canada, you
            inquire as to the country of origin of certain drawn and
            annealed wire processed in Canada from hot rolled wire rod from
            third countries.

                 There is no issue of tariff classification or eligibility
            of the merchandise for a reduced rate of duty under the United
            States-Canada Free-Trade Agreement.  Our ruling follows.

            FACTS:

                 The wire at issue here is made from medium-low carbon hot
            rolled steel wire rod, cold heading quality, conforming to ASTM
            specification A-510-77.  The round wire rod is 0.218 inch in
            diameter and contains the chemical elements required by AISI
            specification 1018.

                 The wire rod arrives in Canada in 2,000 lb. coils.  In
            Canada, the rod is natural aged in the yard, then either
            chemically or mechanically descaled to remove mill scale and
            rust.  It is then uncoiled and drawn between 4 and 6 times
            through progressively smaller tungsten carbide dies into
            process wire.  It is then spheroidize annealed by heating to a
            temperature of 1350 degrees F for 13 hours in a protective
            atmosphere of nitrogen and propylene.  The annealed wire is














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            then said to meet ASTM specification A-548-82 and A-549-82
            which provide for a quality of wire required for recessed
            screws.  The annealed wire is then lubricated and drawn a
            second time to make the surface more machinable for the
            subsequent cold-heading process used to make a variety of
            recessed screws and rivets.  Finally, the wire is coiled,
            tagged, and stored.  This is its condition as imported.

                 The drawing phase of the processing in Canada is said to
            significantly increase the tensile strength of the wire, but
            the psi. increase in this case is not stated.  The Canadian
            processing adds approximately 32 percent to the value of the
            hot rolled wire rod and results in a finished wire ranging from
            0.103 to 0.164 inches in diameter, with the smallest wires
            occasionally being 0.064 inch in diameter.  You state this
            represents an equivalent reduction in cross-sectional area of
            between 69 percent and 93 percent.

            ISSUE:

                 Does the processing in Canada substantially transform the
            hot rolled wire rod into a product of Canada for tariff
            purposes?

            LAW AND ANALYSIS:

                 In order for the hot rolled wire rod 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 related cases.

                 Spheroidize annealing is a time-consuming, controlled
            operation which relieves the stresses of the first draw and
            increases ductility to permit further drawing to final
            dimensional tolerances.  The annealing in this case also
            insures optimum machinability as the wire will be further cold
            worked by upsetting the ends, a necessary step in making
            recessed, cold headed screws.  The annealing in this case
            dedicates a process wire capable of a variety of uses to a
            finished wire having a specific use in the  making of recessed,
            cold headed screws.

            HOLDING:

                 The cold heading quality wire in issue, which has













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            been drawn, spheroidize annealed and further drawn, as
            described in the facts, from 0.218 inch hot rolled wire rod, is
            substantially transformed in Canada and is a product of that
            country for tariff purposes.


                                        Sincerely,



                                        John Durant, Director
                                        Commercial Rulings Division