OT:RR:CTF:VS H086568 BGK
Category: Marking
Jack Alsup
Alsup & Alsup, Inc.
P.O. Box 1251
Del Rio, Texas 78841
Re: Revocation of NY G81433; Country of origin marking for monofilament fishing line
Dear Mr. Alsup:
This letter is to inform you that U.S. Customs and Border Protection (CBP) has reconsidered New York Ruling Letter (NY) G81433, issued to you on September 14, 2000, on behalf of your client, Plastic Lures, Inc., concerning the country of origin marking of monofilament fishing line. In NY G81433, CBP determined that the country of origin, under the NAFTA Marking Rules, should be Germany. We have reviewed that ruling and found it to be in error. Therefore, this ruling revokes NY G81433.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. § 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation was published on April 13, 2011, in the Customs Bulletin, Vol. 45, No. 16. No comments were received on the proposed action.
FACTS:
The merchandise at issue is described in NY G80871, dated August 29, 2000, issued to you prior to NY G81433:
Your letter indicates that synthetic monofilament line made from nylon and other polyamides with various line diameters ranging from .1mm to .5mm is produced in Germany and imported into Mexico in bulk spools ranging in length from 32000 meters to about 87000 meters of line per spool. In Mexico, the bulk rolls of monofilament are respooled on to smaller retail consumer spools holding anywhere from 324 meters of line to 450 meters of line. These consumer spools are then packaged for retail sale and imported to the United States. In their condition as imported, the monofilament line spools are made up into fishing lines and put up and packaged for sale at retail as recreational fishing line.
The fishing line, when imported into Mexico from Germany, is classified under subheading 5404.10 of the Harmonized Tariff Schedule of the United States (HTSUS). When imported into the U.S., the fishing line is classified under subheading 9507.90.20, HTSUS. NY G80871 determined that the monofilament fishing line imported from Mexico was eligible for NAFTA treatment.
ISSUE:
What is the proper country of origin marking for the monofilament fishing line?
LAW AND ANALYSIS:
As determined in NY G80871, the monofilament fishing line was eligible for NAFTA preferential tariff treatment when imported into the U.S. In NY G80871, CBP determined that the fishing line met the applicable tariff shift requirement of HTSUS General Note 12(t), Chapter 95, Rule 10 to be considered a “[good] originating in the territory of a NAFTA party”, as defined in General Note 12(b).
The marking statute, section 304, 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 U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. 19 U.S.C. § 1304(a). 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.
Section 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" within this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
19 C.F.R. § 134.1(b). 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) of the regulations, 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.” As provided in section 134.45(a)(2), “[a] good of a NAFTA country may be marked with the name of the country of origin in English, French, or Spanish.”
The NAFTA Marking Rules are set forth in 19 C.F.R. Part 102. Section 102.11(a) contains the “General rules” for determining country of origin:
(a) The country of origin of a good is the country in which:
The good is wholly obtained or produced;
The good is produced exclusively from domestic materials; or
Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
In this situation, the fishing line is neither wholly obtained nor produced in Mexico, nor is it exclusively produced from Mexican materials. Therefore, section 102.11(a)(3) is the next rule to consider in order to determine the country of origin. The tariff shift rule for subheading 9507.90.20, HTSUS, the classification of the fishing line upon importation into the U.S., is listed in section 102.20 as “A change to subheading 9507.90 from any other subheading, except heading 5004 through 5006, 5404, 5406, or 5603, or from subheading 5402.11 through 5402.49.” 19 C.F.R. § 102.20 (emphasis added). The fishing line is imported into Mexico under heading 5404, HTSUS, and therefore does not satisfy the requisite tariff shift rule.
Accordingly, 19 C.F.R. § 102.11(b) of the hierarchical rules must be applied, which provides that:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
(1) The country of origin of the good is the country or countries of origin of the single material that imparts the essential character of the good, or
(2) If the material that imparts the essential character of the good is fungible, has been commingled, and direct physical identification of the origin of the commingled material is not practical, the country or countries of origin may be determined on the basis of an inventory management method provided under the appendix to part 181 of [the Customs Regulations].
Here, we find that the monofilament fishing line imparts the essential character of the packaged retail fishing line. The country of origin of the monofilament fishing line is Germany.
However, section 102.19(a) contains a “NAFTA preference override”.
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 . . . has been completed and signed for the good.
19 C.F.R. § 102.19(a). As determined in NY G80871, the fishing line is an originating good under section 181.1(q). Additionally, the fishing line is not a good of a single NAFTA country under section 102.11(a) or (b) or section 102.21. As such, the fishing line may be a product of Mexico under the “NAFTA preference override” if it undergoes more than “minor processing.”
“Minor processing” is defined by 19 C.F.R. § 102.1(m), in part, as:
. . .
(4) Trimming, filing or cutting off small amounts of excess materials; [or]
. . .
(6) Putting up in measured doses, packing, repacking, packaging, repackaging;
. . .
Here, while cutting occurs, it is not the type of cutting described in paragraph (4). 19 C.F.R. § 102.1(m)(4) refers to cutting off small amount of excess materials, while here, bulk rolls are being cut to size to create the retail fishing line. The retail lines are being created, not trimmed. Therefore, paragraph (4) is not controlling. Also, because the bulk rolls are being cut to size and respooled before being packaged, the operations go beyond those described in paragraph (6) as well. The retail fishing line is not just sorted into smaller amounts and packaged, as described in 19 C.F.R. § 102.1(m)(6); it is cut to size from bulk rolls and respooled before packaging.
We note that in Headquarters Ruling Letter (HRL) 966892, it was held that cutting sutures to length and packaging them was not enough to create a change in the country of origin, taking into account section 102.21, the textile and apparel rules of origin and section 102.17. Section 102.17(c) provides that an applicable change in tariff classification set forth in section 102.20 or section 102.21 shall not have been met by “simple packing, repacking or retail packaging without more than minor processing.” We note that unlike this case, HRL 966892 did not involve the NAFTA eligibility of the goods at issue. Further in this case, the bulk rolls of the monofilament fishing line are cut to retail size, and the lines are respooled before packaging.
Accordingly, we find that the fishing line undergoes more than minor processing in Mexico. Pursuant to section 102.19(a), the fishing line is a product of Mexico.
HOLDING:
As the monofilament fishing line is a NAFTA originating good of Mexico under General Note 12(t), Chapter 95, Rule 10, HTSUS, the country of origin of the fishing line is Mexico for purposes of the marking requirements.
EFFECT ON OTHER RULINGS:
NY G81433, dated September 14, 2000, is hereby REVOKED.
Sincerely,
Myles B. Harmon, Director
Commercial Trade and Facilitation Division