CLA-2-63:OT:RR:NC:N3:349
Ms. Kim M. Lamberton
Deringer Logistics Consulting Group
173 West Service Road
Champlain, NY 12919
RE: The tariff classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination of cell phone cleaners ; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.21(c)(2); tariff shift; NAFTA Preference Override; Article 509
Dear Ms. Lamberton:
In your letter dated November 29, 2011 you requested a ruling on the classification and status of cell phone cleaners from Canada under the NAFTA. This request is made on behalf of Micro Clair International Inc.
The subject merchandise consists of Micro Spot Cellphone Cleaners. Samples of two cleaners were submitted. Both items are made from a woven 30 percent nylon and 70 percent polyester fabric laminated to an adhesive sheet. The outer surface of the fabric has a thin clear coating. One cleaner is square in with rounded corners. The second cleaner is oval. They measure approximately 1 inch square and 1.5 x .75 inches, respectively. The cleaners will be printed with various designs. The items are used to clean cell phone screens.
The manufacturing operations for the cell phone cleaners are as follows:
KOREA:
- nylon and polyester fabric is woven.
-adhesive plastic sheets are formed.
-woven fabric and adhesive plastic sheets are shipped to Canada.
CANADA:
-product designs are printed on sublimation papers using a digital printing machine.
-images are heat transferred onto the woven fabric.
-printed fabric is laminated to adhesive sheet.
-fabric is cut to shape (oval or square with rounded edges).
-micro spot cleaner cloth is placed on an information card.
- the card is inserted into a cellophane wrapper, packaged and shipped to the United States.
The classification of the Micro Spot Cellphone Cleaners was previously determined in New York Ruling Letter N103204 dated May 25, 2010. As noted in that ruling the applicable tariff provision for the Micro Spot Cleaners will be 6307.10.2030, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other made up articles, including dress patterns: floorcloths, dishcloths, dusters and similar cleaning cloths: other… other. The general rate of duty will be 5.3 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
General Note 12, HTSUS, incorporates Article 401 of NAFTA into the HTSUS. General Note 12(a)(i) provides, in pertinent part:
(i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and goods enumerated in subdivision (u) of this note, 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.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the 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 subdivisions (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;
The micro spot cleaners undergo processing operations in Canada. Canada is a country provided for under the North American Free Trade Agreement. These products will be eligible for the NAFTA preference if they qualify to be marked as a good of Canada and if they are wholly obtained or produced in the NAFTA territories or transformed in Canada so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUS. For heading 6307, HTSUS, the appropriate subdivision (t) rule states that:
A change to subheading 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.
When the woven fabric enters Canada it is classified in heading 5407, HTSUS. The plastic backing is classified in Chapter 39. As fabrics of headings 5407, HTSUS, are excepted from meeting the tariff change to heading 6307, HTSUS, it would initially appear that the non-originating material from Korea does not undergo the requisite change in tariff classification. However, you have indicated that the producer in Canada will claim the Canadian made laminated fabric to be their “self-produced material.”
The Appendix to Part 181 of the Customs Regulations (19 CFR Part 181), which sets forth the NAFTA rules of origin regulations, specifies rules for determining whether certain non-originating materials undergo an applicable change in tariff classification when used in self- made goods. The Appendix to Part 181, Part II, Section 4 ("Originating Goods")(8), states:
For purposes of determining whether non-originating materials undergo an applicable change in tariff classification, a self-produced material may, at the choice of the producer of the good into which the self-produced material is incorporated, be considered as an originating material or non-originating material, as the case may be, used in the production of that good.
The laminated fabric, which is manufactured in Canada prior to the completed cell phone cleaner is considered a “self-produced material.” On the basis of the foregoing, the producer of the cell phone cleaners ("the good") has the option of identifying the laminated fabric ("the self-produced material") as non-originating materials. When this choice is made, the laminated fabric (classifiable under heading 5903, HTSUS) falls within a tariff provision that is not excepted by the tariff shift rule set forth in subdivision (t). Accordingly, the cell phone cleaners would be deemed as undergoing the requisite change in tariff classification.
Pursuant to the analysis set forth above, the cell phone cleaners qualify as an originating good. Accordingly, they will be entitled to the special "CA" rate of duty if they qualify to be marked as a good of Canada and provided that all other NAFTA requirements are met.
Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.
Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:"
Paragraph (e) in pertinent part states that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:"
HTSUS Tariff shift and/or other requirements
6307.10 The country of origin of a good classifiable under subheading 6307.10 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
The cell phone cleaners are made from combinations of plastic and a textile fabric. The fabric was formed in a single country. As the fabric comprising the cleaners is formed in a single country, that is, Korea, as per the terms of the tariff shift requirement, country of origin is conferred in Korea.
However, the cell phone cleaners qualify as a NAFTA originating good. As stated in Section 102.19(a):
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 the cell phone cleaners qualify as a NAFTA originating good, applying the terms of Section 102.19(a), the country of origin of the cell phone cleaners is Canada. The cell phone cleaners will be entitled to the special "CA" duty rate, provided that all other requirements of the NAFTA are met.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist John Hansen at (646) 733-3043.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division