CLA-2-39:OT:RR:NC:N4:421
Mr. Anthony d’Eon
Marinelite Windows Limited
P.O. Box 163
Middle West Pubnico
Nova Scotia, Canada B0W 2M0
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of windows from Canada; Article 509
Dear Mr. d’Eon:
In your letter, which was received in this office on July 2, 2009, you requested a ruling on the status of framed windows from Canada under the NAFTA.
Your company manufactures polyvinyl chloride (PVC) framed marine windows. The windows are custom built to the size and shape requested by your customers. The tempered glass panels, laminated glass panels, PVC frames, PVC center posts, PVC drains, PVC flanges, plastic latches and seals originate in Canada. The compression springs, weather seals, rubber seals, metal hinges and tape patches originate in the United States. The sealant originates in the Netherlands. The self-threading screws originate in Thailand. The hatch adjusters originate in Taiwan. The metal washers originate in Singapore.
The applicable tariff provision for the framed windows will be 3925.20.0020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for builders’ ware of plastics, not elsewhere specified or included: doors, windows and their frames and thresholds for doors…window and window frames. 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(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 non-originating 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.
Since the windows include components that originate in countries other than Mexico, Canada or the United States, General Note 12(b)(i), HTSUS, does not apply. We must next refer to General Note 12(b)(ii)(A), which specifies in part that merchandise will qualify as originating goods for NAFTA eligibility if each of the non-originating materials – in this case, sealant, screws, hatch adjusters and metal washers – undergoes a change in tariff classification described in subdivision (t). The finished windows are classified within heading 3925, HTSUS. The rule applicable to merchandise classifiable in this heading is found in General Note 12(t) (39.10), which requires a change to headings 3924 through 3926 from any other heading, provided there is a Regional Value Content (RVC) of not less than 60 percent where the transaction value method is used or 50 percent where the net cost method is used. All of the non-originating materials used in the production of the windows have undergone the tariff shift required by the note. The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements, including the Regional Value Content requirements specified in General Note 12(t)(39.10).
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.
You have provided cost breakdowns showing the country of origin and cost of each component comprising the finished window. However, you have not tracked each component to its original origin and cost. For example, although you indicate that the compression springs are purchased from the United States, you have not indicated whether those springs are manufactured in the United States from material sourced solely in the United States. Although you indicate that the PVC frames are extruded in Canada, you have not identified the country of origin and original cost of the PVC resin or precursor materials to the resin that are used in the production of the PVC frames. More detailed information is necessary in determining the RVC for components that are themselves manufactured from non-originating materials, e.g., if the frames, which are extruded in Canada, are made from PVC resin from a non-NAFTA country.
If you request a ruling regarding the RVC of your goods, then provide complete information about the original source of each component comprising each finished window. That information should track the country of origin of all precursor materials, such as the PVC resin in the framing material, drains, center posts and flanges and the plastic resin in the injection latch and seals. For all precursor materials that are not produced in a NAFTA country, you should include a breakdown showing the country of origin of each precursor component, the cost of each precursor component, and the cost of each processing step.
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 Joan Mazzola at (646) 733-3023.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division