CLA-2-96:OT:RR:NC:2:236
Mr. Jeff Satterlee
Russell A. Farrow (U.S) Inc.
27221 Northline Rd.
Taylor, MI 48180
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of scrap gelatin netting from Canada; Article 509
Dear Mr. Satterlee:
In your letter dated December 4, 2007 you requested a ruling on behalf of Accucaps Industries on the status of scrap gelatin netting from Canada under the NAFTA.
Your descriptive literature states that raw gelatin powder imported from Japan, India, and France will be brought to Canada where additional ingredients will be added and the product will be heated and then dyed to create gelatin for use in the production of gelatin capsules. Encapsulation machines turn the gel into gel ribbons. The gel ribbons are filled with the material that will be contained in the capsules. After encapsulation the capsules continue on their path and the excess ribbon (scrap gelatin netting) is collected. This scrap gelatin netting will be sent to the U.S for processing into adhesives.
The applicable tariff provision for the scrap gelatin netting will be 9602.00.1080, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Worked vegetable or mineral carving material and articles of these materials; molded or carved articles of wax, of stearin, of natural gums or natural resins, of modeling pastes, and other molded or carved articles, not elsewhere specified or included; worked, unhardened gelatin (except gelatin of heading 3503) and articles of unhardened gelatin: 9602.00.1080 Worked unhardened gelatin and articles thereof: Other. The general rate of duty will be 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(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. ยง 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; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their arts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
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 Debra Wholey at 646-733-3034.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division