CLA-2-48:OT:RR:NC:2:234
Mr. David Murphy
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP
399 Park Avenue, 25th Floor
NewYork, NY 10022-4877
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of filler paper, composition notebooks, spiral notebooks and wireless notebooks from Mexico; Article 509
Dear Mr. Murphy:
In your letter dated April 13, 2009 and supplemented May 6, 2009, on behalf of your client, Staples, The Office Superstore, LLC (“Staples”), you requested a ruling on the status of filler paper, composition notebooks, spiral notebooks and wireless notebooks from Mexico under the NAFTA.
You state in your original request that all of the items will be formed from jumbo paper rolls sourced in Taiwan and substantially transformed in Mexico into separate and distinct articles of commerce. You state in your supplemental letter dated May 6, 2009, the items being imported into Mexico would be paper in rolls, weighing 40 g/m2 or more but not more than 150 g/m2. The paper would be in rolls that measure 100 - 102 cm in width. The paper is uncoated, designated as writing paper in the industry, and doesn’t contain fibers obtained by a mechanical or chemi-mechanical process. It is white in color, contains less than 3% ash, has a brightness of 60% or more, and is bleached uniformly throughout the mass. The paper is not embossed, perforated, creped or crinkled at the time of importation into Mexico.
At the time of importation into Mexico, the paper would be classified in subheading 4802.55.1000, Harmonized Tariff Schedule of the United States. You state in your letter dated April 13, 2009, that once in Mexico the rolls will be transformed into filler paper, composition notebooks, spiral notebooks or wireless notebooks. The process for all the transformations begins with unwinding the rolls and processing the paper through a lining machine. The purpose of the lining machine is to print lines and margin rulings on the paper in a continuous manner. The lined paper is then jogged and cut into large sheets. The large sheets are cut and trimmed to the appropriate size of the item being formed.
The filler paper is cut to notebook size (20.3 cm x 26.7 cm and 21.6 cm x 27.9 cm), counted and sorted into the specified number of sheets for each package, and three hole punched. The finished sheets are matched with a cover sheet, shrink wrapped and placed in cartons and shipped to your client in the United States for retail sale.
The composition notebooks are cut from large sheets into medium sheets measuring 39 cm x 50 cm and counted and sorted into the specified number of sheets for each notebook. The lined and cut sheets are matched with the appropriate printed cover sheets. Two cover designs are printed on one cover sheet. One is on the top and the other is on the bottom. The covers and sheets of paper are sewn together to create the spine binding which is then folded over. Spine tape is applied to cover the binding. The composition books are cut and trimmed to their final size of 19 cm x 24 cm and placed in cartons and shipped to your client in the United States for retail sale.
The spiral notebooks are further processed by being simultaneously perforated as it is going through the lining machine. The paper is then jogged and cut into large sheets. The large sheets of lined, perforated paper are cut to the appropriate notebook size 20.3 cm x 26.7 cm, 21.6 cm x 27.9 cm or 22.9 cm x 27.9 cm, counted and sorted into the specified number of sheets for each notebook and are three hole punched. The lined sheets are matched with the printed covers and fly sheets (if applicable) and are bound with wire. Some of the notebooks may be matched with slip-sheets and shrink wrapped. All the finished notebooks are placed in cartons and shipped to your client in the United States for retail sale.
The wireless notebooks like the spiral notebooks are simultaneously perforated as they go through the lining machine. The lined paper is then jogged and cut into large sheets. The large sheets are then cut to medium sheets 21.6 cm x 84 cm and counted and sorted into the specified number of sheets for the notebook. The lined sheets are then matched with printed covers and glued together. A spine tape is applied to cover the binding. The assembled notebooks are then cut to a final size of 21.6 cm x 27.9 cm or 22.9 cm x 27.9 cm and three hole punched. The finished product is placed in cartons and shipped to your clients in the United States.
The applicable tariff provision for the filler paper will be 4802.57.1000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes . . . other than paper of heading 4801 or 4803; hand-made paper and paperboard: Other paper and paperboard not containing fibers obtained by a mechanical or chemi-mechanical process . . . of such fibers: Other, weighing 40 g/m2 or more but not more than 150 g/m2: Writing and cover paper. The general rate of duty will be Free.
The applicable tariff provision for the composition notebooks, spiral notebooks and the wireless notebooks will be 4820.10.2020, HTSUS, which provides for Registers account books, notebooks . . . of paper and paperboard: Registers, account books, notebooks . . . and similar articles: Diaries, notebooks and address books, bound memorandum pads, letter pads and similar articles: Memorandum pads, letter pads and similar articles. The general rate of duty will be Free.
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. § 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.
Based on the facts provided, the notebooks 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 letter has not addressed the Regional Value Content (RVC) of the subject goods. If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, provide the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)), to U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177, along with a copy of this letter.
The filler paper does not qualify for preferential treatment under the NAFTA because none of the above requirements 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 Patricia A. Wilson at (646) 733-3037.
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, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division