MAR-2 OT:RR:CTF:VS H233566 HkP
UKFTA
Mr. Dennis Yoon
Assistant Manager, Overseas Business
Yuhan Corporation
49-6 Daebang-Dong
Dongjak-Gu, Seoul 156-754
South Korea
RE: United States-Korea Free Trade Agreement; Country of Origin; Pentaerythritol Polyethylene Glycol Ether Tetra-Thiol (“(PEG-Thiol)4”)
Dear Mr. Yoon:
This is in response to your letter, dated July 17, 2012, on behalf of your company
Yuhan Corporation to the National Commodity Specialist Division, U.S. Customs and Border
Protection (“NCSD, CBP”), requesting a binding ruling on whether (PEG-Thiol)4 imported from South Korea qualifies for preferential duty rates under the United States-Korea Free Trade Agreement (“UKFTA”). Included in your letter were documents describing manufacturing operations in Korea, Batch Production and Control Records, a Certificate of Analysis, and a statement by the final user in the United States that (PEG-Thiol)4 and another chemical are used in the manufacture of surgical sealant in the United States. Your letter was forwarded to this office for a response.
FACTS:
According to the information submitted, Yuhan Chemical Inc. manufactures and purifies (PEG-Thiol)4 at a facility in South Korea. In the first stage of the manufacturing process (PEG-Ms)4, the precursor to (PEG-Thiol)4, is formed as a result of the synthesis of a basic 4-Arm PEG (polyethylene glycol), classified in subheading 3907.20.00, Harmonized Tariff Schedule of the United States (“HTSUS”), with other products of chapter 29, HTSUS. In the second manufacturing stage, (PEG-Ms)4 is reacted with products of chapters 22, 28, and 29, HTSUS, to produce a crude (PEG-Thiol)4 wet cake. The wet cake is then purified through a series of degassings, washings, coolings, stirrings, and filterings with products of chapters 22, 28, and 29, HTSUS. The resulting product is a purified (PEG-Thiol)4 wet cake. The second step in the purification process consists of a series of degassings, washings, coolings, stirrings, and filterings with products of chapters 22 and 29, HTSUS, after which the product is dried. According to the Certificate of Analysis, the resulting product is dry, solid (PEG-Thiol)4 that is 87 percent pure. It is imported into the United States classified under subheading 3907.20.00, HTSUS.
ISSUE:
Whether (PEG-Thiol)4, manufactured and purified in South Korea and imported into the United States, is eligible for preferential tariff treatment under the UKFTA.
LAW AND ANALYSIS:
On October 21, 2011, Congress approved the UKFTA in section 101(a) of the UKFTA Implementation Act, Public Law 112–41, 125 Stat. 428 (19 U.S.C. § 3805, note). On March 6, 2012, the President signed Proclamation 8783 to implement the provisions of the UKFTA for the United States. The Proclamation, which was published in the Federal Register on March 9, 2012 (77 FR 14265), modified the HTSUS as set forth in Annexes I and II of Publication No. 4308 of the U.S. International Trade Commission entitled “Modifications to the Harmonized Tariff Schedule of the United States to Implement the United States-Korea Free Trade Agreement.” The modifications to the HTSUS included the addition of new General Note (“GN”) 33, incorporating the relevant UKFTA rules of origin as set forth in the Act, and the insertion throughout the HTSUS of the preferential duty rates applicable to individual products under the UKFTA where the special program indicator “KR” appears in parenthesis in the “Special” rate of duty subcolumn. The Proclamation implemented the UKFTA for goods entered or withdrawn from warehouse for consumption on or after March 15, 2012. Therefore, imported goods that are Korean originating are entitled to the benefits of the UKFTA as of March 15, 2012, and in accordance with the Act and General Note 33 of the HTSUS.
An originating good is one that meets the general and/or product specific rules of origin, set forth in section 202 of the Act and incorporated in GN 33, HTSUS, and all other requirements of the UKFTA. For goods classified under subheading 3907.20, HTSUS, GN 33 contains the general rules of origin, which provide in part, as follows:
(b) For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if -
(i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both;
(ii) the good is produced entirely in the territory of Korea or of the United States, or both, and
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and
satisfies all other applicable requirements of this note and of applicable regulations; or
(iii) the good is produced entirely in the territory of Korea or of the United States, or both, exclusively from materials described in subdivisions (i) or (ii), above.
For the purposes of General Note 33, the term “UKFTA country” refers only to Korea or to the United States.
GN 33(n) provides, in relevant part:
(viii) A good of heading in chapters 28 through 40 that satisfies one or more of the
provisions enumerated in this subdivision shall be treated as an originating good for the purpose of this note, except as otherwise specified in such provisions. Notwithstanding the preceding sentence, a good is an originating good if it meets the applicable change in tariff classification or satisfies the applicable value content requirement specified in the rules of origin in subdivision (o) for such chapters.
A good of chapters 28 through 40 that is subject to purification shall be treated as an originating good provided that the purification occurs in the territory of Korea or of the United States, or both and results in the following:
The elimination of not less than 80 percent of the impurities; or
The reduction or elimination of impurities resulting in a good suitable:
As a pharmaceutical, medicinal, cosmetic, veterinary or food grade substance[.]
According to the information submitted, (PEG-Thiol)4 is manufactured and purified in Korea and is 87 percent pure when imported into the United States, where it is used in the manufacture of surgical sealants. Based on these facts, we find that the (PEG-Thiol)4 imported from Korea satisfies GN33(n)(viii)(A)(1) and (2), HTSUS, and is eligible under either provision to be treated as a good originating in Korea and to benefit from preferential tariff treatment under the UKFTA.
HOLDING:
(PEG-Thiol)4, described in this ruling, qualifies for preferential tariff treatment pursuant to General Note 33(n), HTSUS, provided that all other applicable requirements are met.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents are filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation & Special Programs Branch