CLA-2-42:OT:RR:NC:N4:441
Mr. John Mulvihill
UPS Supply Chain Solutions
One UPS Way
Champlain, NY 12919
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a shopping-style tote bag from Canada; Article 509
Dear Mr. Mulvihill:
In your letter dated August 18, 2009 and in subsequent correspondence, on behalf of L. Davis Textile of Granby, Canada, you requested a ruling on the status of a tote bag from Canada under NAFTA.
The tote bag is constructed with an outer surface of jute textile fabric. It is designed to provide storage, protection, portability, and organization to personal effects during travel. It features one interior storage compartment with no additional features. It has an open top and double carrying handles. It measures approximately 13” (W) x 15” (H)” x 8.5” (D).
The applicable subheading for the tote bag will be 4202.92.2000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for travel, sport, and similar bags, with outer surface of textile material, of vegetable fibers and not of pile or tufted construction, other. The general rate of duty is 5.7% 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/.
You have described the following scenario for production of the tote bag. Your client will purchase used coffee bean bags that are constructed from 100% jute from another Canadian company. You state that the actual origin of the bags is unknown and may vary. After importation into Canada the bags are slit and the coffee beans are removed. The empty, slit bags are then sold to your client who cuts and sews the bags, adds handles and does additional printing in order to construct the fabric into tote bags. Those processes are done in Canada. The handles are also constructed of jute fabric. However, it is not obtained from the coffee bags but rather is from another source. That fabric arrives into Canada in rolls. Presumably, its origin is also unknown. These rolls of fabric are laminated with a layer of plastics in Canada before being cut and assembled into the handles. The finished tote bags are then exported from Canada into the United States.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under 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;
The tote bag undergoes processing operations in Canada which is a country provided for under the North American Free Trade Agreement. As we are assuming that the jute bags and fabric are of non-NAFTA origin, neither rule (i) nor rule (iii) apply. Under rule (ii), the tote bag at issue will be eligible for NAFTA preference if it qualifies to be marked as a good of Canada and if it is transformed in Canada so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUS. For heading 4202, HTSUS, the appropriate subdivision (t), Chapter 42 rule states that:
A change to subheading 4202.92 from any other chapter, except from headings 5407, 5408, or 5512 through 5516 or tariff items 5903.10.15, 5903.10.18, 5903.10.20, 5903.10.25, 5903.20.15, 5903.20.18, 5903.20.20, 5903.20.25, 5903.90.15, 5903.90.18, 5903.90.20, 5903.90.25, 5906.99.20, 5906.99.25, 5907.00.05, 5907.00.15, 5907.00.15 or 5907.00.60.
Neither the jute bags of heading 6305 nor the rolls of jute fabric of heading 5310 are excluded from the tariff shift rule. Thus, based on the facts provided; the tote bags described above qualify for NAFTA preferential treatment. They will meet the requirements of HTSUS General Note 12(b)(ii)(B). 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 Vikki Lazaro at (646) 733-3041.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division