CLA-2 RR:CR:TE 960464 GGD
Port Director
U.S. Customs Service
477 Michigan Avenue, Suite 200
Detroit, Michigan 48226
RE: Decision on Application for Further Review of Protest No. 3801-96-102628, filed
June 17, 1996, concerning the classification of articles of stationery.
Dear Sir:
This is a decision on a protest timely filed on June 17, 1996, against your decision in the classification and liquidation of articles of stationery identified as organizers (also known as bound diaries), some of which were made and assembled in Singapore, and the components of the remaining organizers were made in Singapore, Taiwan, and/or Mexico. The articles were entered into the U.S. from Canada in January 1996.
FACTS:
You classified the merchandise under subheading 4820.10.2010, HTSUSA, the provision for “Registers...diaries and similar articles...of paper or paperboard: Registers...diaries and similar articles: Diaries...bound;...and similar articles, Diaries and address books," with a general column one duty rate (in 1996) of 3.2 percent ad valorem.
While the protestant agrees that the imported product consists of a bound organizer/date book/day planner, protestant claims the entry should not have been liquidated without benefit of the NAFTA (North American Free Trade Agreement). The protestant submits additional materials suggesting the alternative claim that the articles should be classified as entered, in subheading 9801.00.1098, HTSUSA, the provision for "Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture
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or other means while abroad, Other: Other," with a general column one duty rate of free. The protestant states that the goods are made up of paper product components imported from various countries into Mexico (where reportedly, a binder was added), then shipped to the U.S. and assembled to form the finished products.
The goods at issue - listed on the proforma invoice as 3,762 organizers valued at $96,993.00 (U.S.) - were entered on January 19, 1996. On January 25, 1996, Customs issued a "Request for Information" on Customs Form (CF) 28, by which the importer (protestant) was asked to "...provide a signed copy of manufacturer's affadavit [sic], show[ing] where and by whom merchandise was manufactured in the U.S."
By memorandum dated April 26, 1996, the importer advised Customs that "a manufacturers affadavit [sic] cannot not [sic] be obtained for the merchandise in reference. Furthermore line items number thirteen and fourteen on the proforma invoice are country of origin Singapore, assembled in Singapore....All others are various origins assembled in the U.S.A. (these origins being Mexico, Taiwan, and Singapore)."
On April 29, 1996, Customs issued a CF 29 ("Notice of Action"), advising the importer that, "Per your submission the manufacturer's affidavit cannot be obtained," a rate advance action was taken, raising the duty rate from free, to 3.2 percent ad valorem, based on reclassification of the items of various origins in subheading 4820.10.2010, HTSUSA.
A copy of a "Certificate of Origin" bearing the protestant's letterhead and dated May 1, 1996, was subsequently submitted which states "US" as the country of origin of 3,762 Personal Organizers with classification in 4820.10.000, HS.
ISSUES:
1) Whether the organizers are eligible for beneficial treatment under the North American Free Trade Agreement (NAFTA).
2) Whether the organizers are eligible for treatment as products of the United States returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.
LAW AND ANALYSIS:
With regard to eligibility of goods for treatment under the NAFTA, we note that General Note 12(a), HTSUSA, provides, in pertinent part that:
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(a) Goods originating in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided herein. For the purposes of this note--
(i) Goods that originate in the territory of a NAFTA party...and that qualify to be marked as goods of Canada...when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.
(ii) Goods that originate in the territory of a NAFTA party...and that qualify to be marked as goods of Mexico...when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "MX" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.
Although the "Special" subcolumn for subheading 4820.10.2010, HTSUSA, does contain the symbols "CA" and "MX," eligibility for the "Free" rate of duty also appearing in the subcolumn requires that the goods qualify to be marked as goods of Canada or Mexico. Protestant has asserted and/or certified, however, that the countries of origin of the completed organizers are Singapore and the U.S.
The protestant contends that the facts of Headquarters Ruling Letter (HQ) 957701, dated July 7, 1995, support the instant claim of NAFTA eligibility. In that ruling, a six-ring looseleaf book with inserted components (i.e., a day planner with sections for a calendar, assignments, notes, telephone/addresses, a plastic ruler, and a pad of graph paper) was classified in subheading 4820.10.2010, HTSUSA, with a "Special" column one duty rate of "Free" when imported into the U.S. The component materials had first been imported into Mexico from three countries, i.e., China (a sewn nylon cover, metal binding mechanism, and heavy sheet of paperboard), Taiwan (the plastic ruler), and the U.S. (paper products). In Mexico, the paper was cut to size, collated, organized and hole-punched; the ring binder was riveted to the paperboard sheet; and the binding mechanism was inserted into the inside of the cover. On this basis, the bound diary was found to be eligible for preferential treatment under the NAFTA as a good originating in Mexico. The facts of that case do not support a similar finding here, where there is no evidence of record to indicate that the organizers qualify as originating goods of either Canada or Mexico. We therefore find that the organizers are not eligible for duty-free treatment under the NAFTA.
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Concerning the entry requirements of articles claimed to be "domestic products" of the United States, Title 19, Code of Federal Regulations (CFR), Part 10.1, states in pertinent part that:
(a) Except as otherwise provided for in...this part or in § 145.35 of this chapter, the following documents shall be filed in connection with the entry of articles in a shipment valued over $2,000 and claimed to be free of duty under subheading 9801.00.10 or 9802.00.20, Harmonized Tariff Schedule of the United States (HTSUS):
(1) A declaration by the foreign shipper...that...the articles herein specified were exported from the United States, from the port of _____ on or about _____, ...and that they are returned without having been advanced in value or improved in condition by any process of manufacture or other means.
(2) A declaration by the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry...that the (above) (attached) declaration by the foreign shipper is true and correct...that the articles were manufactured by _____ (name of manufacturer) located in _____ (city and state)....
(b) In any case in which the value of the returned articles exceeds $2,000 and the articles are not clearly marked with the name and address of the U.S. manufacturer, the port director may require, in addition to the declarations required in paragraph (a) of this section, such other documentation or evidence as may be necessary to substantiate the claim for duty-free treatment....
(d) If the port director is reasonably satisfied, because of the nature of the articles or production of other evidence, that the articles are imported in circumstances meeting the requirements of subheading 9801.00.10 or 9802.00.20, HTSUS, and related section and additional U.S. notes, he may waive the requirements for producing the documents specified in paragraph (a) of this section.
Exceptions to the documentation requirements above are contained in Title 19, Code of Federal Regulations, Part 145.35, which states that:
Products of the United States returned after having been exported, which have not been advanced in value or improved in condition while abroad, may be passed free of duty without issuing an entry and without the declarations provided for in § 10.1(a) of this chapter, provided the shipment is valued at not over $2,000 and the port director is satisfied that the merchandise is free of duty under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (19 U.S.C. 1202).
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As stated in the FACTS section above, the protested shipment at issue was valued at well over $2,000 when entered, and no manufacturer's affidavit or other declaration required under 19 CFR § 10.1(a) was filed to support the claim of duty-free treatment under subheading 9801.00.10, HTSUS. Although the production of such documentation may be waived, the port director must first be reasonably satisfied that the articles were imported in circumstances meeting the requirements of subheading 9801.00.10, HTSUS, which is not the case here. In light of the above, the articles at issue are not eligible for beneficial treatment under the NAFTA, or as products of the United States. We find that the available evidence supports classification of the subject organizers in subheading 4820.10.2010, HTSUSA, the classification assessed on the protested entry.
HOLDING:
The organizers are classified in subheading 4820.10.2010, HTSUSA, the provision for “Registers...diaries and similar articles...of paper or paperboard: Registers...diaries and similar articles: Diaries...bound;...and similar articles, Diaries and address books." The general column one duty rate (in 1996) is 3.2 percent ad valorem.
The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision.
No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and by other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division