Ungraded Outer Ply of Plywood Can Be High Grade for HTS Classification, Says CBP
An ungraded outer veneer on one side of plywood can be of “higher grade” than a graded side when deciding the tariff classification of plywood, said CBP in a recent tariff classification ruling. Tasked with deciding the tariff classification of plywood with outer plies from two different woods on either side, CBP ruled in HQ H256797 (here) that a visual inspection by CBP officers is enough to determine that the ungraded side is of higher quality and predominates for classification purposes.
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Shelter Forest International had imported “C/X” plywood, with one side having an outer ply of birch, and the opposite side made of luan. The birch ply on one side had knots, pitch pockets and splits, and received the low grade “C.” The luan ply on the other was free of blemishes, but ungraded (i.e., grade “X”). Shelter Forest had classified the plywood under the duty-free HTS subheading 4412.32.05 for plywood with an outer face of birch. CBP instead liquidated the entry under subheading 4412.32.32 for other plywood with an outer face of non-coniferous wood, dutiable at 8 percent. Shelter Forest protested, and upon denial by the port, applied to headquarters for further review of the protest.
Though neither the tariff schedule nor the Explanatory Notes give any instruction on how to determine the classification of plywood with outer plies of two different woods, the International Wood Products Association’s Procurement Standard for Imported Hardwood Plywood says that the “better side of any plywood panel in which the outer plies are of different veneer grades” is the face ply. According to Shelter Forest, the only graded face of its plywood is birch, so the birch ply is automatically the “better side.” Shelter Forest also argued that the birch side gave the plywood its “essential character” because it had a higher value than the luan ply.
Relying on a visual inspection conducted by CBP officers, the agency ruled that the luan ply would have been of a higher grade had it been graded, and therefore was the “better side” that determined classification. CBP Seattle observed that the birch side had the characteristics of low-quality “C” grade plywood, said the agency in the May 29 ruling. But the luan side, though not labeled with a grade, did not have any defects, and was smooth and blemish free. “Per industry guidelines, the flaws found in the birch ply mean the birch side is a lower quality grade than the luan. Therefore, the luan side is the face ply,” said CBP.