MAR:RR:NC:2:224 G81433
Jack Alsup
Alsup & Alsup, Inc.
P.O. Box 1251
Del Rio TX 78841
RE: NAFTA; Article 509; Country of origin marking for fishing line;
19 CFR 102.20; 19 CFR 102.11; 19 CFR Part 134
Dear Mr. Alsup:
This is in response to your letter dated August 4, 2000, on behalf of your client, Plastic Lures, Inc., requesting a ruling on the country of origin marking requirements for finished spools of monofilament fishing line.
Facts
On behalf of your client, you have submitted a sample of retail packaged fishing line. The retail consumer spool contains 402 meters of .350mm diameter monofilament line. Synthetic monofilament line is manufactured in Germany from nylon and other polyamides. The monofilament line is exported to Mexico in bulk packed spools ranging in length from 32,000 meters to 87,000 meters of line per spool and the bulk rolls are respooled on to smaller retail consumer spools holding anywhere from 324 meters to 450 meters of line. The consumer spools are then packaged in Mexico for retail sale and imported to the United States.
Country of Origin Marking
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. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C 1304.
Section 134.1(b), of the Customs Regulations defines the term “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. (Emphasis added).
Section 134.1(j) of the regulations 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 U.S. as determined under the NAFTA Marking Rules.
Part 102, Customs Regulations (19 CFR Part 102), sets forth the “NAFTA Marking Rules.” Section 102.11, Customs Regulations sets forth the required hierarchy for determining the country of origin for marking purposes. Section 102.11(a) states that “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 section 102.20
and satisfies any other applicable requirements of that section,
and all other applicable requirements of these rules are satisfied.”
“Foreign material” is defined in section 102.1(e) 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.”
In the situation here, the imported fishing line is neither “wholly obtained or produced,” nor “produced exclusively from domestic (Mexican) materials.” Therefore, for purposes of determining the origin of the imported good, we must look next to section 102.11(a)(3). Under this rule, the country of origin is the country in which “each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20***.” When imported into Mexico the monofilament line, bulk spooled and not yet made up into fishing line for tariff purposes, is classified in subheading 5404.10 of the Harmonized Tariff Schedule of the United States (HTSUS), based on the information available. The finished line, put up and packaged for retail sale, is classified in heading 9507.90, HTSUS. See New York Ruling G80871 dated August 29, 2000.
The applicable tariff shift rule found in section 102.20(s), Section XX, Chapter 95 provides as follows:
9507.90….A change to subheading 9507.90 from any other subheading,
except from heading 5004 through 5006, subheading 5402.10
through 5402.49, subheading 5406.10 through 5406.20, or
heading 5603 or 5404.
Thus, the German-produced monofilament line that is transported to Mexico to be made up into fishing line ready for retail sale does not undergo the applicable tariff shift or change in classification set out in section 102.20(s). The rule specifically precludes a tariff shift where monofilament line is processed into made-up fishing line. As a result, a country of origin determination cannot be made under section 102.11(a)(3). Furthermore, since the foreign material is merely packaged for importation without more than minor processing, it will not be considered to have met the applicable change in tariff classification set out in 19 CFR 102.20. See 19 CFR 102.17.
Since no country of origin determination could be made applying section 102.11(a), the analysis continues with section 102.11(b) of the hierarchical rules which instructs us to examine the article’s essential character to determine its country of origin. Section 102.11(b) holds:
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:
The country of origin of the good is the country or countries of
origin of the single material that imparts the essential character to 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.
The imported article is not described in the Harmonized System as a set, nor is it classified as a set pursuant to General Rule of Interpretation 3. Thus, section 102.11(c) is not applicable. Further, section 102.11(b)(2) is not applicable to the circumstances. In consequence, the rule that must be applied to determine the country of origin of the imported article is section 102.11(b)(1).
In determining the “essential character” of the finished fishing line, section 102.18(b)(2) of the regulations provides as follows:
For purposes of applying 102.11, only domestic and foreign materials
(including self-produced materials) that are classified in a tariff
provision from which a change in tariff classification is not
allowed in the rule for the good set out in 102.20 shall be taken into
consideration in determining the essential character of the good.
In this case, the line material does not undergo the applicable tariff shift. Therefore, applying section 102.11(b)(1) to the facts of this case, we find that the single material that imparts the essential character of the finished fishing line article is the line. Since the origin of this component does not change as a result of the processing performed in Mexico under section 102.20(s), as explained above, the country of origin of the imported fishing line for marking purposes is the country of origin of the monofilament line when imported into Mexico. The retail packaged fishing line is a product of Germany pursuant to the NAFTA Marking Rules. Accordingly, the country of origin marking is required to indicate Germany as the country of origin of the imported spools of fishing line.
This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).
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 Tom McKenna at 212.637.7015.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division