pup joint acronym made in china
This is in reference to the Application for Further Review of Protest 3304-15-100014, timely filed by counsel, on March 3, 2015, on behalf of their client, Red Deer Ironworks, Inc. (“RDI”), contesting the denial of preferential tariff treatment under the North American Free Trade Agreement (“NAFTA”) and country of origin marking of certain pup joints. All confidential information included in this decision will be bracketed and redacted from the public version of this decision.
This case involves 21 entries of certain pup joints imported from Canada between November 3, 2012, and July 31, 2013. The pup joints at issue have three main parts (one steel pipe, and two steel fittings). Each pup joint has a circumference of two (2) or four (4) inches, and a length that ranges from one (1) to twenty (20) feet.
RDI submitted seven entry packages and their related documentation to represent the 21 entries at issue. These entry packages show that the pup joints were imported from Canada to the United States under subheading 7304.29, Harmonized Tariff Schedule of the United States (“HTSUS”), which covers certain hollow steel or iron pipes. We specifically address the entry dated February 13, 2013, which includes the range of documentation included in the seven submitted entry packages and their related documentation.
An entry summary (CBP Form 7501), dated February 13, 2013, showing that RDI imported pup joints with a Canadian country of origin listing, under the second entry line, classified under 7304.29.5015, HTSUS, weighing [XXXX] kilograms (kg), and valued at $[XXXX];
A commercial invoice, dated January 31, 2013, issued by RDI in Canada to a non-related buyer in the United States for various items, including five types of pup joints classified in subheading 7304.29, HTSUS, and valued at $[XXXX], on an F.O.B. basis;
A NAFTA Certificate of Origin, dated January 9, 2013, submitted by Cole on behalf of RDI, listing Canada as the country of origin for various products, including “Integral Pup Joints – Integral or Welded” that were classified under subheading 7304.29, HTSUS;
Material Test Reports issued by RDI for the goods imported under the entry summary, dated February 13, 2013, providing the chemical analysis and mechanical test results for the corresponding pup joints, identifying the pup joints as “MADE IN CANADA”, and certifying that the pup joints were manufactured from steel as represented by the steel manufacturer or its agent according to a Mill Certificate;
Two tables, dated February 11, 2014, submitted by RDI indicating that the pipes used in the production of the pup joints from the second entry line were the pipes inspected per the VTG Inspection Certificate by reference to the heat analysis chemical test results from that certificate;
General Assembly Layouts, dated January 28, 2013, and July 28, 2013, issued by RDI for various goods imported under the entry summary, dated February 13, 2013 (including the five types of pup joints from the second entry line), which illustrate the pup joint design and assembly operations, as well as the dimensions and other specifications; and,
A Packing Slip, dated January 31, 2013, issued by RDI describing six items imported under the entry summary, dated February 13, 2013, including one of the pup joints from the second entry line, which is shown to have a value of $[XXXX] per unit for a total cost of $[XXXX], and references the same job order number as noted in the table that links the pup joints to the VTG Inspection Certificate.
RDI states that after the raw pipes were imported into Canada, they were cut to specific lengths, beveled to change their square edges to sloped edges, and welded with their pipe fittings. Then, while still in Canada, the welded pup joints were heat treated to reduce unwanted stress from the pup joints; buffed and cleaned; assembled with their remaining components (such as wing nuts, segments, snap rings, and seals); and painted per their customers instructions.
On July 17, 2014, CBP issued a Notice of Action (CBP Form 29) indicating that the pup joints did not qualify for preferential tariff treatment under the NAFTA because the country of origin of the pup joints was Austria. RDI disagrees arguing that certain pup joints originate from Canada because the non-NAFTA materials used to produce the pup joints were below the NAFTA de minimis threshold. To support this claim, RDI submitted a table based on 12 invoiced pup joints, which calculates the cost percentage of non-originating materials used in those pup joints as less than 6 percent. Four of these invoiced pup joints correspond to four of the seven submitted entry packages, including the entry dated February 13, 2013, and they also represent the shortest pup joints (“1-ft. pup joints”) from those under consideration. On February 3, 2016, RDI submitted additional documentation to support the claim that the non-NAFTA materials used to produce the pup joints were below the NAFTA de minimis threshold. This documentation included the invoices and general layouts for three 1-ft. pup joints, one of which corresponds to one of the seven submitted entry packages. The invoices show that all of the materials for the pup joints, except for the Austrian pipes, were from Canada or the United States. The documentation also includes de minimis calculations to be less than 6 percent for each non-originating pipe in these three 1-ft. pup joints.
In addition to the NAFTA eligibility claim for certain pup joints, RDI claims that when a good is determined to not be a good of a NAFTA country under 19 CFR Part 102, then the origin rules of 19 CFR Part 134 are used to establish the correct origin. Under this framework, RDI argues that the country of origin for marking purposes is Canada because, per application of 19 CFR Part 134, the non-NAFTA materials are substantially transformed in Canada. RDI claims that this country of origin analysis should be applied to the pup joints that do not originate under the NAFTA.
The Port of Sweetgrass disagrees with RDI’s arguments on the basis that the country of origin of the pup joints is Austria because, per 19 CFR § 102.11(b)(1), the Austrian pipes are the materials that impart the essential character to the pup joints. Because the pup joints do not qualify to be marked as goods of Canada, the Port finds that the pup joints do not meet the NAFTA preferential treatment requirements of General Note (“GN”) 12(a), and that the pup joints cannot be marked with a Canadian country of origin marking under the NAFTA Marking Rules.
GN 12(r)(iii), HTSUS, provides that for purposes of interpreting the rules of origin, a requirement of change in tariff shift applies only to non-originating materials. In this case, RDI has indicated that the non-originating materials used in the pup joints do not undergo a tariff shift. Instead, RDI argues that the non-originating materials in the pup joints are de minimis and should not bar the imported pup joints from NAFTA eligibility.
As calculated per RDI’s submitted de minimis tables, the 1-ft. pup joints have non-originating pipes that account for less than seven percent of the transaction value for those pup joints, as adjusted to a F.O.B. basis. The Port also provided us with a table that was compiled from RDI’s entry summaries and invoices, and listed cost information, classifications, country of origin, and other data for various entries, including the seven representative entry packages. The cost information from the Port’s table permitted us to calculate the same figures calculated by RDI with respect to the 1-ft. pup joints. However, such documentation also indicated that the longer than 1-ft. pup joints (“longer pup joints”) have non-originating pipes that account for more than seven percent of their respective transaction values. Because we have only been provided with cost information for 1-ft. pup joints, and to the extent that the Port’s cost information is consistent with RDI’s cost information, we find that only the 1-ft. pup joints (comprised of 1-ft. non-originating pipes) meet the de minimis threshold, while the longer pup joints (with non-originating pipes exceeding one foot) do not meet the de minimis threshold. Therefore, only the 1-ft. pup joints originate, and whether they are eligible for preferential treatment under the NAFTA depends on whether they qualify to be marked as goods of a NAFTA country.
Counsel for RDI argues that all of the pup joints at issue are products of Canada for marking purposes. Counsel claims that the 1-ft. pup joints qualify to be marked as goods of Canada under the NAFTA Marking Rules per the NAFTA preference override. Counsel claims that the longer pup joints, though not eligible for NAFTA preference, could also be marked as goods of Canada since, under the NAFTA Marking Rules, the imported pup joints are not “goods of a NAFTA country” and thus the country of origin should be determined by the substantial transformation test.
With regard to the 1-ft. pup joints, which originate per the de minimis rule, the question now turns as to whether they qualify to be marked as goods of a NAFTA country. Section 134.1(b), CBP Regulations (19 CFR § 134.1(b)), states that “‘[c]ountry of origin’ means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within the meaning of this part; however, for a good of a NAFTA country the NAFTA Marking Rules will determine the country of origin.” Section 102.0, CBP Regulations (19 CFR § 102.0), states that the NAFTA Marking Rules are used for determining the country of origin of imported goods for the purposes of paragraph 1 of Annex 311 of the NAFTA (i.e., rules for determining whether a good is a good of a NAFTA party). The NAFTA Marking Rules require the application of the country of origin rules per 19 CFR § 102.11, in order to determine whether a good qualifies to be marked as a good of a NAFTA country. See 19 CFR § 134.1(j).
Because the imported pup joints are comprised of pipes from Austria or other non-NAFTA countries, we find that these pup joints are neither “wholly obtained or produced,” nor “produced exclusively from domestic materials,” which prevents the pup joints from qualifying to be marked as goods of Canada under 19 CFR §§ 102.11(a)(1) - 102.11(a)(2). Accordingly, we must examine the applicable change in tariff shift set out in 19 CFR § 102.20, which provides as follows:
In this case, the non-originating pipes from Austria are classified under heading 7304, HTSUS; the pipe fittings from Canada are classified under heading 7307, HTSUS; and, the final 1-ft. pup joint is classified under heading 7304, HTSUS. As such, the pipes do not undergo the requisite tariff shift because they are in the same heading as the pup joints, and we proceed under the hierarchical country of origin rules to 19 CFR § 102.11(b), which provides:
The rule of interpretation set forth in 19 CFR § 102.18(b)(1)(iii) states that if there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed under the 19 CFR § 102.20 specific rule or other requirements applicable to the good, then that material will represent the single material that imparts the essential character to the good under 19 CFR § 102.11. Therefore, the pipe would be the single material that imparts the essential character to the good. See also Headquarters Ruling Letter (“HQ”) H005109, dated April 12, 2007. Accordingly, the country of origin of the imported pup joints under 19 CFR § 102.11(b) would be the country of origin of the pipe, Austria.
However, the NAFTA preference override provision states that when a NAFTA originating good is not determined to be a good of a single NAFTA country under the NAFTA Marking Rules, then “the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing,” provided that a Certificate of Origin has been completed and signed for the good. See 19 CFR § 102.19(a). In this case, the NAFTA preference override provision applies to the NAFTA originating 1-ft. pup joints because they were not determined to be goods of a single NAFTA country under the NAFTA Marking Rule and they underwent production by assembly and other operations. Therefore, the 1-ft.pup joints qualify to be marked as goods of Canada and are eligible for preferential treatment under the NAFTA.
In this case, because the NAFTA materials (pipe fittings and other components) and non-NAFTA materials (pipes) were processed in Canada to make finished goods (longer pup joints) that were then imported from a NAFTA country (Canada) into the United States, we apply the NAFTA Marking Rules to determine the country of origin of the longer pup joints. Counsel for RDI argues that the substantial transformation test should be invoked to determine the country of origin of the longer pup joints because such are not goods of a NAFTA country. We note that this rationale, as explained by counsel, attaches a separate substantial transformation analysis to any non-NAFTA country of origin determination under the NAFTA Marking Rules. However, the NAFTA Marking Rules make no indication that the country of origin must be determined under a separate substantial transformation analysis when the country of origin determined under the NAFTA Marking Rules is not the United States, Canada, or Mexico. In fact, as noted in the above cases, CBP has consistently held that the country of origin of a good was a non-NAFTA country through application of the NAFTA Marking Rules without turning to the substantial transformation test.
Counsel also cites to a House Report in support of the argument that the NAFTA Marking Rules only apply to goods of a NAFTA country. According to the House Report, “[s]ection 207 implements U.S. obligations under NAFTA Article 311 and Annex 311 by enacting changes to basic country of origin marking statute (19 U.S.C. 130[4]) with respect to Mexican and Canadian products imported into the United States.” See H. Rep. 1030361, Part 1, 46. To this extent, it is not clear that “Mexican and Canadian products” are goods of Canada and Mexico under the NAFTA Marking Rules. Nonetheless, this still does not limit the application of the NAFTA Marking Rules in the manner suggested by counsel. Since the Proclamation of the NAFTA in 1993, it has been understood that the NAFTA Marking Rules were implemented “to set forth rules for determining the country of origin of goods imported into the customs territory of the United States for purposes of the NAFTA.” See 58 FR 66867, 668868 (December 20, 1993). This is the same concept addressed in the scope of the NAFTA Marking Rules under 19 CFR § 102.0. Paragraph 1 of Annex 311 of the NAFTA also addresses the rules, stating that the rules shall be established for “determining whether a good is a good of a Party (‘Marking Rules’) for purposes of this Annex, Annex 300-B and Annex 302.2, and for such other purposes as the Parties may agree.” As such, we apply the NAFTA Marking Rules to determine if these pup joints are goods of Canada. By applying these rules, the determination will be that the country of origin of the good is some specific country, and not that the good is a NAFTA good or not a NAFTA good. That is, why would the NAFTA Marking Rules specifically permit the determination of a particular country of origin, which may be a non-NAFTA country, rather than limit the country of origin determinations to only NAFTA countries? Nothing in the NAFTA Marking Rules provides this limit nor indicates that a separate country of origin determination with a different test is required for non-NAFTA country of origin determinations. Accordingly, we disagree with the country of origin analysis proposed by counsel for RDI, and apply the NAFTA Marking Rules to determine the country of origin of the non-originating longer pup joints.
Under 19 CFR § 102.11(a), similar to the 1-ft. pup joint analysis above, the longer pup joints are not wholly obtained or produced, are not produced exclusively from domestic materials, and do not meet the requisite tariff shift rule because both the non-NAFTA pipes and finished pup joints are classified in the same heading, 7304, HTSUS. Accordingly, we apply 19 CFR § 102.11(b)(1) as interpreted by 19 CFR § 102.18(b)(1)(iii), which results in the pipe being the single material that imparts the essential character to the good. Therefore, the country of origin of the longer pup joints is the country of origin of the pipe, Austria.
Based on the information provided, the 1-ft. pup joints are eligible for preferential treatment under the NAFTA per the de minimis rule and the NAFTA preference override. However, the longer pup joints are not eligible for preferential treatment under the NAFTA, and
You are instructed to ALLOW this protest in part, with regard to the 1-ft. pup joints, and DENY this protest in part, with regard to the remainder of the issues. In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
China-Russia Commercial Aircraft International Co. Ltd. (CRAIC), a joint venture company invested by COMAC and Russia"s United Aircraft Corporation (UAC) responsible for the development of a wide-body commercial jet, was established in Shanghai on 22 May 2017. Research and development for the new plane will be conducted in Moscow, and it will be assembled in Shanghai.
China is not among Bangladesh’s top ten export partners,22 but it aims to remedy this with policies and preferences to bolster the latter’s export prospects. For instance, China has allowed 97 percent of Bangladeshi goods duty-free access to its domestic market since June 2020.23 More important, it is helping the country to diversify its export base and move its industry up the value chain.24 Bangladeshi entrepreneurs can procure Chinese manufacturing machinery at minimal interest and with substantial grace periods.25 During Xi’s visit to Dhaka in 2016, the two countries signed twenty-seven agreements under which China would lend $24 billion to Bangladesh for projects including coastal disaster management and a road tunnel under the Karnaphuli River, as well as help to strengthen production capacity.26 China is also directly setting up manufacturing industries in Bangladesh, located in special economic zones (SEZs) such as the Chinese Economic and Industrial Zone-2 in Chittagong.27 Bangladeshi companies have expressed a preference for joint ventures with Chinese ones as, beyond attracting investment and financing jobs, this helps to facilitate the transfer of expertise and technology.28 According to Bangladeshi entrepreneurs, investment from China comes in clusters, as an initial investment generally leads to follow-on joint ventures, eventually establishing an entire ecosystem.29
The energy sector has been the greatest recipient of such investment, with Bangladeshi companies establishing joint ventures with Chinese counterparts. The 1,320-megawatt Payra coal-powered plant, the largest power plant in the country, which came online in 2020, is brought up most often as an example of the success of the model. It was developed by Bangladesh China Power Company, which was created as an equal-stakes joint venture between China National Machinery Import and Export Corporation and Bangladesh’s North-West Power Generation Company.30 Apart from electricity generation, the project is expected to develop significant transportation operations and infrastructure facilities on site, building railroads and bridges, as well as developing and increasing capacity of the Payra port. Additionally, under a maintenance agreement with the Chinese company, Bangladeshi workers will be trained and technology to run the plant will be transferred in the five years after the start of operation.31 Beyond energy, China’s role in Bangladesh’s cluster-based-industrialization approach is visible in joint ventures set up for various projects in Purbachal,the country’s first “smart” city, which is being developed in the outskirts of Dhaka, as well as for an industrial zone in Chittagong for manufacturing firms and associated industries.32
As in Bangladesh, China has facilitated technology transfer to Nepal, creating the perception and reality of aiding wealth creation and expanding employment. Emblematic of this is the rising number of joint ventures such as Hongshi Shivam Cements—a combined investment of $333.6 million into a cement factory that aims to produce 12,000 tons of cement daily and employ 2,000 Nepali workers.73 Trade relations have deepened in the past decade, with China accounting for 15.2 percent of Nepal’s imports as of 2019, up from 11.1 percent in 2012.74
Military ties and security exchanges with Nepal have been among China’s weakest in the region. However, new initiatives have been announced since 2017, including the annual joint military exercise Sagarmatha Friendship. Under a Joint Command Mechanism Agreement, the two countries have discussed joint patrolling of the border.75 During Xi’s 2019 visit, they also exchanged letters on providing border security equipment to Nepal.76
In Nepal, the state has allowed Chinese observers to be unofficially present in government ministries related to development so that they can keep track of China-funded projects, thus subcontracting oversight from national officials to foreign actors that should be the subject.167 Before signing an agreement to build an airport in Pokhara, officials of the civil aviation authority found that China Eximbank had demanded as a guarantee that revenue from all of Nepal’s airports be kept in a joint account with itself.168 In a separate example, the state-owned airline was forced to ground aircraft purchased from China due to unprofitability and operational issues.169 It was later established that the aircraft had been brought into the fleet even before their suitability for Nepal’s needs had been established by government oversight.170 In other cases, local officials had to make peace between Chinese contractors and local laborers in a road project after the latter accused their employer of not paying the legal minimum wage, as a stronger state would have enforced.171 Similarly, the government body in charge of setting school curriculums was left in the dark when schools across the country made Mandarin classes mandatory as part of a direct deal between the schools and the Chinese government.172
In 2020, for example, 122 Chinese nationals were arrested in Nepal and sent back to China after local authorities failed to file charges against them. The Nepali and Chinese authorities contradicted each other on the nature of the operation, with the former claiming that they acted alone with information from Chinese authorities, while Beijing claimed that it was a joint operation.174 According to stakeholders, Chinese requests to Nepal’s police started ahead of the 2008 Olympics when pro-Tibet protesters were arrested.175 This elevated level of vigilance returned during Xi’s 2019 visit, not only because of the government’s initiatives but also because of requests made by Beijing.176
Reports of political influence on the police and other law-enforcement agencies are not new in Bangladesh either. International human-rights organizations have highlighted instances of how the police has been used to restrain the political opposition of the day and of citizens being arrested on charges of anti-government actions.177 While incidents of police action in projects funded or constructed by Chinese entities come up in conversation with stakeholders, they rarely appear in newspapers.178 At least one project—a power plant in Chittagong, built as part of a joint venture between a Bangladeshi and a Chinese company—has seen unrest over the years. In 2016, four people were killed by the police, who fired on demonstrators protesting against the plant’s construction.179 Five people were killed in connection with the same project in April 2021 when demonstrators protesting against the Chinese subcontractor clashed with the police.180
Organizations dedicated to good relations and friendship between the two countries—for instance, between elite journalists—have an active online and social media presence, helping to amplify positive impressions about China. China-linked journalists sometimes publish op-eds in mainstream newspapers on topics ranging from criticism of Western media’s propaganda about COVID-19 to commentary against “U.S. imperialism.”249 In some cases, publications acknowledge their Chinese partnerships, as in the case of the Sri Lanka Red Cross Society, which publishes the quarterly magazine Subhasara jointly with China Radio International.250 Similarly, the Sri Lanka-China Journalists Forum and the Chinese Cultural Centre sponsor the bi-monthly magazine People’s Republic of China.251 To reach out to the public-policy community, institutions associated with China’s State Council or the CCP have started directly building ties with Sri Lankan think tanks for knowledge and experience sharing.252 Chinese actors also directly fund educational institutions to set up specific centers, such as the Chinese Academy of Sciences funding the China-Sri Lanka Center for Education and Research at the University of Ruhuna in the southern part of the country.253
75 Rewati Sapkota, “China Proposes Joint Security Mechanism Along Border With Nepal,” Himalayan Times, December 26, 2017, https://thehimalayantimes.com/nepal/china-proposes-joint-security-mechanism-along-border-nepal.
116 Pushpa Rowell, “චීනයේ අසිරියෙන් බිඳක්” (A Bit of Chinese Wonder), Dinamina, August 9, 2016, http://www.dinamina.lk/2016/08/09/20621; “Visit to Institutes of Chinese Academy of Sciences,” China-Sri Lanka Joint Center for Research and Education [ CSL-CER ], accessed August 9, 2021, https://www.ruh.ac.lk/Uni/cslcer/mainmenu.php?menu=Events&evntid=8.
253 “China-Sri Lanka Joint Center for Research and Education (CSL-CER) Was Declared Open,” China-Sri Lanka Joint Center for Research and Education [ CSL-CER ], accessed August 9, 2021, https://www.ruh.ac.lk/Uni/cslcer/mainmenu.php?menu=Events&evntid=5.
The thirteenth CCP Beijing Municipal Congress opened this morning. Comrade Cai Qi reported that Beijing would continue to maintain Zero COVID pandemic control measures [for the next five years] and would resolutely protect against outside infections as well as internal transmission. The city will maintain and improve Beijing’s “four joint responsibilities” (local, work unit, organizational, and individual), infection prevention mechanisms, and the “four earlies” emergency response system (early detection, reporting, isolation, and treatment). Beijing will implement comprehensive pandemic controls that are scientific, accurate, and dynamic.
Russia and China held a weeklong joint military exercise in the Sea of Japan with other troops such as India, Laos and Mongolia last month. Both countries have held joint drills in recent years, including in Russia"s Far East.