CLA-2-96:OT:RR:NC:N4:414
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of marker boards from Canada; Article 509
Mr. Milton Tamamoto
Broker Manager
Nippon Express USA, Inc.
230-19 International Airport Center Blvd.
Suite 100
Jamaica, NY 11413
Dear Mr. Tamamoto:
In your letter dated November 30, 2016 you requested a ruling on the status of marker boards from Canada under the North American Free Trade Agreement (NAFTA), on behalf of your client Kanematsu USA, Inc.
The product at issue is identified in your submission as a marker board. It is described as a porcelain enamel coated marker board with a writing or drawing surface. Dry erase markers are used to write or draw on the surface of the marker board.
Kanematsu USA, Inc. plans to sell Japanese origin porcelain enamel coated steel sheet in coils to a Canadian company. The porcelain enamel coated steel sheet will be imported into Canada under subheading 7225.99.00, Harmonized Tariff Schedule. The Canadian company will cut the porcelain enamel coated steel sheet to size, add an aluminum foil layer and a plywood backing on top of the aluminum layer to the backside of the porcelain enamel coated steel sheet. For most orders, the borders would be left off.
After completion, Kanematsu USA, Inc. will purchase the marker boards from the Canadian company. The marker board will be imported to the US and will be sold to other US customers who will add the borders to the marker boards, per their customers’ requirements.
The applicable tariff provision for the marker boards will be 9610.00.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Slates and boards, with writing or drawing surfaces, whether or not framed. The general rate of duty will be 3.5 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 https://hts.usitc.gov/current.
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.
The porcelain enamel coated steel sheet in coils imported from Japan and sent to Canada are classified in heading 7225, HTSUS. The marker boards that are made in Canada from the Japanese porcelain enamel coated steel sheets are classified in heading 9610, HTSUS. Based on the change in classification as a result of the Canadian operations, we find that the porcelain enamel coated steel sheets make the requisite tariff shift under GN 12(t)/chapter 96(9). Consequently, the marker boards are eligible for preferential tariff treatment under NAFTA. 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 Barbara Kiefer at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division