CLA-2-39:OT:RR:NC:3:353
Ms. Paula Fraser
Innovation Acres Inc.
R.R.#1 Pownal
Mt. Albion, PE C0A IZ0
RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA), of a plastic clothing accessory from Canada; Article 509
Dear Ms. Fraser:
In your letter dated February 18, 2008, you requested a ruling on the classification, country of origin and status of a “Strapsecret” from Canada under the NAFTA. The sample has been retained by this office.
The submitted sample is referred to as “Strapsecret” and is composed of polypropylene hook strip and silicone. The sample is approximately 3½-inches in length and ½-inch in width with rounded edges; one side is hook material and the other side is silicone. The “Strapsecret” keeps the bra strap from sliding off the shoulder; the item is worn on the underside of a bra strap, with the hook side facing the bra strap and the silicone side against the wearer’s shoulder.
Hook strip and flowable sealant silicone are imported into Canada. The hook strip is of Taiwanese origin; the silicone is of United States origin. In Canada, the hook strip is pre-treated and the silicone is applied. The item is cured, die cut to size and packaged two to a package.
The applicable tariff provision for the “Strapsecret” will be 3926.20.9050, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other articles of plastics and articles of other materials of headings 3901 to 3914: Articles of apparel and clothing accessories…Other: Other, Other.” The general rate of duty will be 5% 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/.
Section 102.11 of the Customs Regulations (19 CFR 102.11), sets forth the required hierarchy for determining country of origin of goods from NAFTA countries for marking purposes.
Section 102.11(a) of the Customs Regulations states that, “[t]he country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or
(3) 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."
The requirements of CR 102.11 (a), (1) and (2) are not applicable since the “Strapsecret” is neither wholly obtained nor produced exclusively from domestic materials. CR 102.20 for headings 3922-3926 requires “A change to heading 3922 through 3926 from any other heading, including another heading within that group.” The Taiwanese polypropylene hook strip is a good of heading 3926 and has not undergone the required tariff shift; Section 102.11(a)(3) is not applicable.
Since the country of origin cannot be determined under paragraph (a) of Section 102.11, Section 102.11(b) must be looked to under the marking rules of origin hierarchy. Under Section 102.11(b)(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.” As neither the hook strip nor the silicone imparts the essential character of the good, Section 102.11(b)(1) is not applicable. The issue of fungibility under Section 102.11 (b)(2) is also inapplicable.
Section 102.11(c) requires that “Where the country of origin cannot be determined under paragraph (a) or (b) of this section and the good is specifically described in the Harmonized System as a set or mixture, or classified as a set, mixture or composite good pursuant to General Rule of Interpretation 3, the country of origin of the good is the country or counties of origin of all the materials that merit equal consideration for determining the essential character of the good.” Section 102.11(c) is also inapplicable because neither component imparts the essential character of the good.
Section 102.11(d) is next in the rules of origin hierarchy. These rules state that the country of origin of a NAFTA good shall be determined as follows:
(1) If the good was produced only as a result of minor processing, the country of origin of the good is the country or countries of origin of each material that merits equal consideration for determining the essential character of the good.
(2) If the good was produced by simple assembly and the assembled parts that merit equal consideration for determining the essential character of the good are from the same country, the country of origin is the country of origin of those parts.
(3) If the country of origin of the good cannot be determined under paragraph (d)(1) or (d)(2) of this section, the country of origin of the good is the last country in which the good underwent production.
The “Strapsecret” has is not produced only as a result of minor processing and is not the result of simple assembly; therefore, Section 102.11 (d) (1) and (2) do not apply. The country of origin will be determined according to Section 102.11 (d) (3) as the last country in which the good underwent production. As the hook strip and the silicone was produced into the “Strapsecret” in Canada, the good is a product of Canada.
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; 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 parts 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.
As the “Strapsecret” is classified in heading 3926, HTSUS, GN 12(t)/39.10 applies, which provides for:
A change to headings 3924 through 3926 from any other heading, including another heading within the group, provided there is a regional value content of not less than:
(A) 60 percent where the transaction value method is used, or
(B) 50 percent where the net cost method is used.
The hook strip from Taiwan is a good of heading 3926. The merchandise does not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials used in the production of the good will not undergo the change in tariff classification required by General Note 12(t)/39.10 and because none of the other requirements of GN 12 (b) 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 Kenneth Reidlinger at 646-733-3053.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division