CLA-2-40:OT:RR:NC:N2:421
Mr. Stephen J. Leahy
Law Office of Stephen J. Leahy
175 Derby Street, Suite 9
Hingham, MA 02043
RE: The tariff classification of factice/synthetic rubber from China
Dear Mr. Leahy:
In your letter dated June 5, 2014, on behalf of Blumberg Company of Newburyport, Massachusetts, you requested a tariff classification ruling.
The imported product is described as bulk, irregularly shaped sheets of factice derived from vulcanized soybean oil. The sheets measure approximately 20.5 inches by 11.5 inches and weigh approximately 10 pounds each. These sheets will be used to produce gum erasers in the United States. After importation the sheets will be cleansed to remove the talc or starch that is added post chemical reaction to prevent the sheets from sticking together. The sheets will then be cut to regularly shaped pieces with dimensions of 2 inches by 1 inch and 1 inch by 1 inch and marketed as gum erasers. The erasers will be printed with a commercial logo, packed in a display-style retail box, and packed in cartons for shipments to retail customers.
The applicable subheading for the factice sheets will be 4002.99.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for synthetic rubber and factice derived from oils, in primary forms or in plates, sheets or strip: other: other. The 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/.
You have also asked about the country of origin and the marking requirements for the erasers. You suggest that the erasers have become a product of the United States for purposes of NAFTA. Note that the imported product is a sheet that is wholly produced in China. Thus, China is considered to be the country of origin of the imported factice sheets and the NAFTA regulations do not apply to the sheets. Moreover, although you suggest that the erasers that are produced in the U.S. have undergone a tariff shift so as to be classifiable as erasers in subheading 4016.92.0000, that subheading falls under the heading for other articles of vulcanized rubber other than hard rubber. Classification in that subheading is limited to goods that are not provided for in earlier provisions of the chapter. Since the completed erasers are in the form of rectangular blocks, they remain classifiable in subheading 4002.99.000, and there is no tariff shift that occurs as a result of the U.S. processing.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d) defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See 19 CFR 134.35.
In this case, the imported bulk sheets are substantially transformed as a result of the U.S. processing. The erasers, which have been cut to both width and length, have undergone a substantial transformation into a new and commercially distinct product, having a new name and different function than the sheets from which they were formed. Therefore, the U.S. manufacturer is the ultimate purchaser of the imported bulk sheets. Under 19 CFR 134.35 only the containers which reach the ultimate purchaser, i.e., the producer of the erasers, are required to be marked to show China as the country of origin.
You concede that the erasers cannot be marked “Made in the United States” but suggest that they be marked “Made in the United States from U.S. and foreign components.” However, in a telephone conversation with this office you admitted that the erasers will contain no U.S. components but will merely have undergone the U.S. processing described above. Note that the Federal Trade Commission (FTC) has jurisdiction concerning the use of the phrase “Made in the U.S.A” or similar words denoting U.S. origin. Any inquiries regarding the propriety of such marking should be directed to Division of Enforcement, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, telephone (202) 326-2996. Information can also be found on the FTC website at www.ftc.gov.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
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 [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division