Welding Component Parts Considered a 'Process' Under TIB Rules, CBP Says

Welding operations in the U.S. used to create a finished product for export are considered to be a “process,” which means the imported components are eligible for duty-free temporary importation under bond treatment, CBP said in a March 30 ruling. The ruling, requested by Crane Worldwide Logistics, involves parts used in nuclear power plants. Crane's client, Thermal Engineering International (TEI), asked for CBP input on how the TIB rules apply and whether the components are eligible treatment in TIB subheading 9813.00.05.20.

The welding operation is used to combine six imported individual parts to create a Chevron Vane Assembly (CVA), which is subsequently exported. Unlike in other settings, for TIB purposes, CBP said an article is considered to be “'processed' when the 'result is a change in the character and use' of the merchandise to meet certain customer specifications.”

The first prerequisite for TIB treatment is that the item “will not be processed into alcohol, distilled spirits, wine, beer or any dilution or mixture of any or all the aforementioned; a perfume or other commodity containing ethyl alcohol; or a product of wheat.” The item here meets that requirement, CBP said. “However, with respect to the second prerequisite, if the processing described here results in anything other than CVAs, TEI must provide CBP with a complete accounting for all articles, wastes and irrecoverable losses resulting from the aforementioned processing.” The agency also noted that “if the CVAs are exported to Mexico or Canada, then duty-deferral restrictions under the North American Free Trade Agreement or the United States-Mexico-Canada Agreement may be applicable.”