Before Mayer, Chief Judge, Newman, and Clevenger, Circuit Judges.
The opinion of the court was delivered by: Clevenger, Circuit Judge.
Appealed from: United States Court of International Trade
Judge Thomas J. Aquilino, Jr.
United States Court of Appeals for the Federal Circuit
Alcan Alumnium Corporation, Plaintiff-Appellant, v. United States, Defendant-Appellee.
Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting opinion filed by Chief Judge MAYER.
Appellant Alcan Aluminum Corporation requests reversal of the Court of International TradeOs decision affirming the United States Customs ServiceOs imposition of merchandise processing fees on imported aluminum ingots at a rate greater than that permitted by the United States-Canada Free-Trade Agreement of 1988. See Alcan Aluminum Corp. v. United States, 986 F. Supp. 1436 (Ct. IntOl Trade 1997). Because the Court of International Trade erred by finding the common-law Osubstantial transformationO test available as an alternative to the transformation requirements of General Note 3(c)(vii)(B)(2) of the 1993 Harmonized Tariff Schedule of the United States, and failed to construe General Note 3(c)(vii)(B)(2) in light of the well-recognized doctrine of de minimis non curat lex, we reverse.
This dispute arose when the Alcan Aluminum Corporation (OAlcanO) imported from Canada unwrought aluminum ingots, seeking preferential trade status under the United States-Canada Free-Trade Agreement Implementation Act of 1988 (OUSCFTA ActO), Pub. L. No. 100-449, 102 Stat. 1851 (1988). See also 19 U.S.C. * 2112 note (1994). Section 202 of the USCFTA Act allowed Ogoods originating in the territory of CanadaO to qualify for merchandise processing fee of 0.038 percent ad valorem, greatly reduced from the 0.19 percent imposed on ineligible imports. *fn1 See 19 U.S.C. ** 58(a), (b)(10) (1993) (authorizing full and reduced merchandise processing fees respectively).
At the time of their import, Alcan asserted that the aluminum ingots, comprised of both Canadian and OoffshoreO--non-Canadian--materials, underwent the "transformationO required by HTSUS General Note 3(c)(vii)(B)(2) (1993) (codifying section 202(a)(1)(B) of the USCFTA Act), and thus constituted "goods originating in the territory of Canada" that qualified for the reduced merchandise processing fee. The United States Customs Service (OCustomsO) disagreed, and imposed the full merchandise processing fee because a small amount--less than one percent by weight and value--of the ingredients used in production of the ingots did not undergo a tariff classification shift, as required by General Note 3(c)(vii)(B)(2)(I). Upon paying the fees and exhausting administrative remedies, Alcan filed suit in the Court of International Trade. After a two-day trial, that court issued a ruling affirming CustomsO decision, holding (1) that while the common-law Osubstantial transformationO test established by United States v. Gibson-Thomsen Co., 27 CCPA 267, 140 WL 4085 (1940), was applicable to the OtransformationO requirement in General Note 3(c)(vii)(B)(2), the imported merchandise did not undergo such a transformation, and (2) that the principle of de minimis non curat lex did not apply to the terms of that subsection. See Alcan, 986 F. Supp. at 1436. Alcan appealed to this court. Our jurisdiction is pursuant to 28 U.S.C. * 1295(a)(5) (1994).
We review the Court of International TradeOs interpretation of statutory provisions de novo. See Midwest of Cannon Falls, Inc. v. United States, 122 F.3d 1423, 1426 (Fed. Cir. 1997); Rollerblade, Inc. ...