CLA-2 RR:TC:SM 560902 BLS
Port Director
9 N. Grand Avenue
Nogales, AZ 85621
RE: Eligibility of ink refill kits for NAFTA Preference; originating goods; country of origin marking; Article 509
Dear Sir:
This is in reference to a letter dated October 27, 1997, on behalf of Nu-Kote International (Nu-Kote), requesting a ruling concerning the tariff classification of certain ink refill kits. The importer also asks whether the imported kits will be considered “originating” goods for purposes of determining whether they are eligible for NAFTA preference, and the country of origin marking requirements for the articles. Samples have been submitted.
FACTS:
The ink refill kits, Item Numbers RF16, RF40 and RF63, are imported from Mexico by Nu-Kote from Nu-kote Internacional de Mexico, S.A. de C.V. The kits are designed to refill ink jet printer cartridges.
Item RF16 comprises three plastic ink filled squeeze bottles (colors cyan, magenta and yellow) with metal needles. A user can insert the needle into an ink jet print cartridge and refill the cartridge by squeezing the ink out of the bottle. A metal drill bit with a plastic handle is included in the kit. This will be used to make a hole in the print cartridge into which the needle will be inserted. A small sponge is provided to wipe away any ink spilled during refilling.
Item RF40 consists of a plastic refill bottle with a plastic needle. It contains black ink. A separate plastic primer syringe is also included along with an identical sponge as the one included in RF16. A plug removal tool, used to puncture the hole in the print
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cartridge through which the ink will be refilled, and two black plugs to fill the hole are also provided. The components are packaged in a plastic tray that can also be used as a refill station.
Item RF 63 comprises a plastic squeeze bottle with a metal needle. This bottle contains black ink for ink jet cartridges. A plug removal tool, such as the one included in RF40, screw plugs, a screw plug wrench, and sponge are also included. The plug removal tool is used to puncture a hole in the ink cartridge to be refilled. Once the cartridge is refilled using the squeeze bottle, the plastic plugs are inserted into the holes using the screw plug wrench. The screw plug wrench is also used to prime the cartridge once it has been filled.
The refill kits are produced in Mexico with the use of U.S.-origin ink. Nu-Kote states that it also provides squeeze bottle components with needles and primers, plug removal tools, and packaging materials (cartons, plastic trays, plastic wrap) all of which are produced entirely from materials which are of U.S.-origin.
The sponges, seal plugs, cartridge tool, drill bit, and plug wrench are of non-NAFTA origin. These components are shipped with the ink, plastic articles, and packaging materials to NIM for assembly.
NIM assembles the plastic squeeze bottles and then transfers the ink from the drums into the squeeze bottles. They then assemble the kits and package them for retail sale. The refill kits are then shipped back to Nu-Kote.
ISSUES:
1) What is the classification of the ink refill kits?
2) Whether the imported ink refill kits will qualify as originating goods for purposes of determining whether the articles are eligible for NAFTA preference.
3) What are the country of origin marking requirements for the ink refill kits?
LAW AND ANALYSIS:
Classification
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1
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states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 3(b)
states, in part, that goods put up in sets for retail sale (“sets”) shall be classified as if consisting of the component which gives them their essential character.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the System. Customs believes the ENs should always be consulted. See Treasury Decision (T.D.) 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
To qualify as a set for tariff purposes, relevant ENs for GRI 3(b) list three requirements: (1) there must be at least two articles which are, prima facie, classifiable in different headings; (2) the components must be put up together to meet a particular need or carry out a specific activity; and, (3) the components must be put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).
The plastic ink refill bottle, wrench and other items constitute a set in that they meet all the requirements listed in the Explanatory Notes for GRI 3. Specifically, the ink refill bottle and wrench are prima facie classifiable in different headings. The wrench is classifiable in heading 8204 and the ink cartridge in heading 3215. They are put up together with the other items to meet a particular need. In this instance the need is for a method of refilling an ink jet print cartridge.
In NY C81423 dated December 5, 1997, concerning the identical items, Customs found that the essential character of the imported kit is imparted by the ink, and held that each ink refill set was properly classifiable under subheading 3215.90.50, HTSUS, which provides for Printing ink, writing or drawing ink and other inks, whether or not concentrated or solid: Other: Other. We hereby affirm NY C81423.
Originating Goods
A. Originating Goods
General Note 12 of the HTSUS, incorporates Article 401 of the NAFTA into the
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HTSUS. General Note 12(b) provides in pertinent part the following:
For purposes of this note, goods imported into the
customs territory of the United States are eligible
for the tariff treatment and quantitative limitations
set forth in the tariff schedule as “goods originating
in the territory of a NAFTA party” only if:
(i) they are goods wholly obtained or produced entirely
in the territory of Canada, Mexico and/or the United
States; or
(ii) they have been transformed in the territory of
Canada, Mexico, and/or the United States so that --
(A) except as provided in subdivision (f) of this note,
each of the non-originating materials used in the
production of such goods undergoes a change
in tariff classification described in subdivisions (r),
(s) and (t) of this note or the rules set forth therein, or,
(B) the goods otherwise satisfy the applicable
requirements of subdivision (r), (s) and (t) where no
change in tariff classification is required, and the
goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of
Canada, Mexico and/or the United States exclusively
from originating materials.
Since, as described, each of the three sets is comprised in part of materials which come from countries other than Mexico, Canada and/or the United States, neither General Note 12(b)(i) or 12(b)(iii) is applicable. Therefore, we must ascertain whether the non-originating materials in each case are transformed in Mexico pursuant to General Note 12(b)(ii)(A), HTSUS. To qualify under this provision, the non-originating material(s) must undergo the requisite change in tariff classification required in General Note 12(t).
As noted, each of the imported sets is classified under subheading 3215.90.50, HTSUS. All of the non-originating materials, i.e., sponges, seal plugs, cartridge tool,
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drill bit, and plug wrench are classified in provisions outside of heading HTSUS heading 3215. General Note 12(t)/32.15 requires “A change to heading 3215 from any other heading.”
Thus, a change in tariff classification does occur in each case, and the imported ink refill kits are considered to be “goods originating in the territory of a NAFTA party,” and thus eligible for NAFTA preference.
Country of Origin Marking
The marking statute, section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin (or its
container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Part 134, Customs Regulations
(19 C.F.R. Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304.
The country of origin marking requirements for a “good of a NAFTA country” are
also determined in accordance with Annex 311 of the NAFTA, as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (December 8, 1993) and the regulations set forth in 19
CFR Parts 102, 134.
Section 134.1(b) (19 C.F.R. §134.1(b)) of the regulations defines “country of origin” as:
The country of manufacture, production, or growth
of any article of foreign origin entering the U.S.
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”; however, for a good of a NAFTA country, the NAFTA
Marking Rules will determine the country of origin.
Section 134.1(j) provides that the “NAFTA Marking Rules” are the rules
promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.
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Part 102 of the regulations (19 C.F.R. Part 102), sets forth the “NAFTA Marking Rules.” Section 102.11 of the regulations (19 C.F.R. §102.11) sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) provides that “[t]he country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that good undergoes
an applicable change in tariff classification set out in section
102.20 and satisfies any other applicable requirements of that
section, and all other requirements of these rules are satisfied.”
“Foreign Material” is defined in section 102.1(e) of the regulations as “a
material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.”
Since none of the three sets is wholly obtained or produced, or produced exclusively from domestic (Mexican) materials, section 102.11(a)(3) is the applicable rule which must first be applied. In order to determine whether Mexico is the country of origin under this rule, we must look at those materials whose country of origin is other than Mexico, which includes material of U.S-origin (“Foreign Material” under 19 C.F.R. §102.11(e)).
As each of the three sets is classified under subheading 3215.90.50, HTSUS,
the change in tariff classification must be made in accordance with section 102.20(f), Section VI: Chapters 28 through 38, heading 3215 of the regulations, which provides as follows:
A change to heading 3215 from any other heading.
As the ink of U.S.-origin (foreign material) is classifiable under subheading 3215.90.50, a tariff shift does not occur and accordingly, we must proceed to 19 C.F.R. §102.11(b), in the hierarchal order, to ascertain the country of origin marking requirements of the imported article. However, section 102.11(b) is not applicable if the good is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3. As a result, since neither section
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102.11(a) or (b) is applicable, section 102.19 is triggered. Section 102.19(a) provides that:
Except in the case of goods covered by paragraph (b) of this
section, if a good which is originating within the meaning of §181.1(q) of this chapter is not determined under §102.11(a) or (b) or §102.21 to be a good of a single NAFTA country, 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 (see §181.11 of this chapter) has been completed and signed for the good.
As each of the imported kits undergo assembly operations in Mexico, the country of origin of the kits is Mexico, the last NAFTA country in which the good underwent production other than minor processing as defined in 19 C.F.R. §102.1(m).
HOLDING:
1) The three ink refill sets are properly classifiable under subheading 3215.90.50, HTSUS, which provides for Printing ink, writing or drawing ink and other inks, whether or not concentrated or solid: Other: Other. NY C81423 dated December 5, 1997 is hereby affirmed.
2) As the non-originating materials undergo the requisite change in tariff classification in Mexico required in General Note 12(t), HTSUS, a change in tariff classification occurs with respect to each of the three ink refill kits. Therefore, the imported articles are considered to be “goods originating in the territory of a NAFTA party,” and eligible for NAFTA preference.
3) As the imported kits undergo assembly operations in Mexico and provided a certificate of origin has been completed and signed for the good, pursuant to 19 C.F.R. §102.19(a) the country of origin of the kits is Mexico, the last NAFTA country in which the good underwent production other than minor processing as defined in 19 C.F.R. §102.1(m).
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Please provide a copy of this decision to Marc D. Torrence, Import Manager, V. Alexander & Co., Inc., P.O. Box 291929, Nashville, Tenn. 37214-3650.
Sincerely,
John Durant, Director
Commercial Rulings Division