From Fred Waite and Kim Young, AWPA Counsel
US Customs and Border Patrol has issued a ruling on the country of origin of stainless steel wire produced from wire rod from South Korea, Taiwan, or India. The cold-drawing and annealing of the rod takes place in Australia, and the party requesting the ruling (Aqseptence Group, Inc.) argued that a substantial transformation of the rod takes place in Australia, thus changing the country of origin of the wire to Australia.
Citing the 1987 court decision in Superior Wire v. United States, CBP determined that the country of origin of the stainless steel wire is the country of origin of the wire rod – that is, South Korea, Taiwan, or India.
The court in Superior Wire held that drawing wire rod into wire does not constitute a substantial transformation because there is no significant change in the use or character of the wire. The court found that the wire is not a new and different product than the wire rod, but rather the last stage in the processing operation.
The party requesting the ruling also argued that the annealing process supports a finding of substantial transformation. CBP disagreed, explaining that “annealing is commonly performed subsequent to the wire-drawing process and on its own does not generally create a unique product used in limited applications”. Specifically, CBP explained that it has consistently held that “annealing which is not extensive or complex and does not transform or narrow the uses of the article, is not a substantial transformation”.
You can read the full ruling here.