Aluminum Waste From FTZ Operations Not Subject to Section 232, AD/CV Duties
Aluminum waste recovered from a manufacturing process in a foreign-trade zone is not subject to Section 232 tariffs or to antidumping and countervailing duties upon entry, CBP said in a May 8 ruling. Shannon Fura, a lawyer with Page Fura, sought CBP's ruling on behalf of the U.S. Granules Corp. (USGC). The company buys aluminum scrap and waste from suppliers that generate recoverable aluminum from manufacturing operations within an FTZ, it said.
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The aluminum scrap and waste come from “industrially generated items such as juice pouches, yogurt lidding, and chewing gum wrappers,” CBP said. Prior to processing into such products, the aluminum is entered by the suppliers into the FTZ under a heading that is subject to both Section 232 tariffs and AD/CV orders, it said. When such tariffs apply, the goods must be admitted to the FTZ under privileged foreign status to “preserve the additional duties for assessment at withdrawal and entry,” CBP said.
While CBP regulations allow for recoverable waste as an exemption to PF status requirements, USGC said there seems to be some conflict between the CBP regulations and instructions for applying the Section 232 and AD/CV remedies. Even though the Section 232 Presidential Proclamations and AD/CV orders require that the FTZ good remain subject to the remedies upon entry, neither addresses “treatment of recovered waste generated by a zone manufacturing process that uses PF status merchandise,” it said. “Absent specific legal provisions to the contrary, CBP’s FTZ regulations apply.”
Based on CBP's regulations applied “in an ordinary course,” the scrap aluminum can be designated as non-privileged foreign, the agency said. As a result, “the recoverable aluminum waste generated by USGC’s suppliers will be in NPF status when withdrawn and entered for consumption, meaning that it will be dutiable at its condition at withdrawal, and thus, subject to neither the Sec. 232 action, nor AD/CVD duties under the applicable orders.” Even so, the recoverable aluminum waste classified in Harmonized Tariff Schedule subheading 7602.00.0090 may still be subject to the Section 301 tariffs on goods from China at the time of entry for consumption in the U.S., CBP said.