A Georgia PET sheet manufacturer is contesting a preliminary U.S. government decision to label imported recycled PET flake as a ``primary'' material rather than waste and as a result subject to a tariff.
Freudenberg Texbond LP, based in Macon, Ga., is urging the Bureau of Customs and Border Protection to consider the material waste, which is imported duty- free. The case potentially impacts PET imported to the United States from outside the North American Free Trade Agreement zone.
Freudenberg contends that since recycled PET contains contaminants, such as small amounts of vinyl and polypropylene, it is not the same as virgin and does not have the same uses, said Jason Waite, a lawyer with Alston & Bird LLP in Washington who is representing the company. The company said that if it needed an absolutely pure PET, it would buy virgin.
Customs Bureau lawyer Allyson Mattanah said the agency is studying the issue, but she referred a reporter to a previous bureau ruling involving fluoropolymers that noted that ``the presence of contaminants does not qualify the plastic as waste.''
She said recycled material can be designated as primary.
Labeling it as a primary form, which can include virgin material, means the company pays tariffs equal to about 7.5 percent of the value of the shipment, Waite said.
Freudenberg, which is a unit of Freudenberg & Co. LP in Weinheim, Germany, imports the material from Italy.
The initial determination that the recycled PET should be treated as ``PET in primary form'' was made by officials at the Port of Atlanta, where the material is brought in, Freudenberg said in documents filed with the Customs Bureau. Government regulations say that if a shipment of thermoplastic is only one material, it cannot be considered waste, Waite said.
``The government sees this being used in commercial products and one question that has come up is can this be used in the same way as virgin PET,'' Waite said. ``Our response is no. It can be used in rugs and to stuff pillows and what we use it for, [but] it doesn't command the same price on the market.''
Customs officials tested the company's imported recycled PET but those tests were not detailed enough to produce valid results that showed contamination, Freudenberg said. Mattanah said the government is waiting for the results of additional tests to make a decision.
Waite said the company conducts much more detailed tests and occasionally rejects loads for having too much contamination, which it considers more than 50 parts per million of PVC or 25 ppm of other polyolefins.