CLA-2-48:OT:RR:NC:2:230
Ms. Lisa Ho
Maddocks Industrial Filter Division
663 Woodward Ave.
Hamilton, ON L8H 6P3
CANADA
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of pleated filter paper
Dear Ms. Ho:
In your letter, dated May 6, 2015, you requested a binding ruling on pleated filter paper. Samples and product information were submitted for our review.
You have requested a ruling regarding classification, country of origin and NAFTA eligibility of pleated filter paper. In your letter, you indicate that the base paper, in rolls, is manufactured in the United States. You explain that the paper will be shipped to Canada where only the pleating process will be completed. The pleated filter paper will then be returned to the U.S.
In your submission, you suggest that the base paper is classifiable under heading 4805, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specified in note 3 to this chapter, and that the final pleated filter paper is classified in heading 4823, HTSUS, which provides for Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers. Unfortunately, you have not provided sufficient information regarding the manufacturing of the base paper to determine the original classification. Nonetheless, we believe that the base product is classified in a separate heading than the final pleated filter paper product, which we agree is classified in heading 4823, HTSUS.
The applicable subheading for the pleated filter paper will be 4823.20.9000, HTSUS, which provides for Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers: Filter paper and paperboard: Other. The rate of duty will be free.
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
You state that the U.S.-origin filter paper is pleated in Canada. Both Canada and the United States are countries provided for under the NAFTA. Based on the facts provided, the pleated filter paper qualifies for NAFTA preferential treatment, as it meets the requirements of HTSUS General Note 12(b)(i). The pleated filter paper will be entitled to a free rate of duty under NAFTA upon compliance with all applicable laws, regulations, and agreements.
With regard to country of origin and marking thereof, 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. Pursuant to 19 CFR Section 134.1(b), the country of origin is the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to a foreign article in the United States must effect a substantial transformation in order to render the final product a good of the U.S. However, for a good of a NAFTA country, the NAFTA Marking Rules (set forth in 19 CFR Part 102) will determine the country of origin. The NAFTA rules govern the current scenario. Applying the terms of Section 102.19(b), the country of origin of the pleated filter paper is Canada:
If, under any other provision of this part, the country of origin of a good which is originating within the meaning of § 181.1(q) of this chapter is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.
While the manufacturing completed in Canada does result in a change of classification heading, it is not sufficient to impact origin. Section 102.20 provides that, to render a change in the country of origin of a good classifiable in subheading 4823.20, HTSUS, there must be a change to that subheading from any other chapter. Since the product is paper and remains paper after processing in Canada, there is not a change from another chapter; thus, the pleated filter paper is of U.S. origin. Then, applying 19 CFR 102.19(b) above, the country of origin is Canada, the last NAFTA country in which the pleated filter paper was advanced in value before its return to the U.S.
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/.
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 Laurel Duvall at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division