Monday, October 05, 2015

Composite Wood is not Necessarily Veneered

In Composite Technology International, Inc v. United States, the Court of International Trade considered the tariff classification of wooden door stiles and rails consisting of a 9.5 mm thick pine cap laminated to a based of laminated poplar wood layers. Each poplar layer is lass than 6 mm thick. The exposed surface is a layer of pine.

Customs classified the merchandise in 4421.90.97 as other articles of wood. The imported protested that classification and claimed that the correct classification is 4412.99.51 as other plywood, veneered panels, and similar laminated wood. The issue, therefore, was whether the imported merchandise is properly classified as plywood, veneered panels, or similar laminated wood. If so, it would not be classifiable as an "other article of wood."

According to the plaintiff, the merchandise described above fits squarely within the definition of a veneered panel or, in the alternative, as a "similar laminated wood."

For those of you who, like me, might have no idea what this case is about, here is a useful illustration:

From Homestead Interior Doors
Looking at the Explanatory Notes, the Court quickly identified the apparent problem for the plaintiff. The Explanatory Notes state that these products are a thin veneer of wood affixed to a base. Heading 4408 defines "sheets of veneering" as being not more than 6 mm in thickness, which indicates that a veneer for purposes of Heading 4412 must also be less than 6 mm. Here, the facing layer exceeds 6 mm and, therefore, is not a veneer.

Plaintiff relied on a prior decision of the Federal Circuit called Boen defining plywood construction for purposes of Heading 4412. That case defined plywood, but did not address the meaning of veneer.  Consequently, the CIT was not moved to follow it.

That leaves open the question of whether the merchandise is "similar laminated wood." On this, the CIT was also unconvinced. The Explanatory Notes define similar laminated wood as:

[1] Blockboard, laminboard and battenboard, in which the core is thick and composed of blocks, laths or battens of wood glued together and surfaced with the outer plies. Panels of this kind are very rigid and strong and can be used without framing or backing.

[2] Panels in which the wooden core is replaced by other materials such as a layer or layers of particle board, fibreboard, wood waste glued together, asbestos or cork.

On this point, the plaintiff failed to prove that the core of the product was blocks, laths, or battens glued together. That precludes classification under the first definition of "similar laminated wood." Similarly, because the cores are wood, and not some other material, the merchandise did not fit the second meaning of similar laminated wood.

There is not much more to say about this case. If there is an issue for appeal, it strikes me that the CIT read the Explanatory Notes definition of "similar laminated wood" as exclusive, which seems contrary to the broad meaning of the term "similar." If the heading were intended to cover only those two categories of "similar" products, the HTS language should say so. This reading of the notes seems to add a limitation that is not otherwise there. That is a no no, at least according to the Federal Circuit. 

1 comment:

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