CLA-2-63:OT:RR:NC:N3:351
Ms. Barbara M. Carman
BCB International Inc.
1010 Niagara Street
Buffalo, NY 14213
RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA) of scrubbing sponges from Canada, Article 509
Dear Ms. Carman:
In your letter dated January 31, 2017, you requested a ruling on behalf of your client, Royal Sponge Mfg., Ltd. on the status of scrubbing sponges from Canada under the NAFTA. Samples of the scrubbing sponges were examined and will be retained.
FACTS:
The samples you submitted, items # 1931, 1934, 1942 and 1951 are all scrubbing sponges.
Item # 1931 - is a scrubbing sponge that is cut with a wavy edge on the long sides, composed of a thin layer of non-woven polyester glued to a polyurethane foam sponge ½ inch in thickness. It is retail- packed in plastic, six sponges to a pack.
Item # 1934 - is a scrubbing sponge that is rectangular in shape composed of a thin layer of non-woven polyester glued to a polyurethane foam sponge ½ inch in thickness. It is retail-packed in plastic twelve sponges to a pack.
Item # 1942 - is a scrubbing sponge that is rectangle is shape composed of a thin layer of non-woven polyester glued to a ¼ inch polyurethane foam sponge. It is retail packed in a cardstock wrapper, five sponges to a pack.
Item # 1951 - is a scrubbing sponge that is cut with a wavy edge on the length sides composed of a thin layer of non-woven polyester glued to a one inch polyurethane foam sponge. It is retail packed, in plastic, including a small plastic basket holding three sponges to a pack.
Essentially all of the scrubbing sponges are the same and the only difference is the shape, thickness of the polyurethane foam sponge and the packaging. The scrubbing sponges are used for cleaning and scouring dishes, pots and pans and kitchen surfaces.
The scrubbing sponges are produced from the following materials:
Polyurethane foam sponge from Canada
Non-woven polyester scouring layer from China
Polyurethane adhesive glue from the United States
CLASSIFICATION:
The item under consideration, the scrubbing sponge, is a composite good that consists of several components which are classified in different headings. The key components are the polyurethane foam sponge classified under heading 3921, Harmonized Tariff Schedule of the United States (HTSUS) and the nonwoven polyester scouring layer classified under heading 5603, HTSUS.
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Since no one heading in the tariff schedules covers all the components of the subject scrubbing sponge in combination, GRI 1 cannot be used as a basis for classification. GRI 3(b) provides that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. The foam may hold the water and cleaning solution but the scouring layer performs the scrubbing action that plays the vital role. Hence, in accordance with GRI 3(b), it is the opinion of this office that the textile component, the nonwoven scouring layer, imparts the essential character of the sponge and thus determines the classification.
The applicable tariff provision for the scrubbing sponge items # 1931, 1934, 1942 and 1951 will be 6307.90.9889, HTSUS, which provides for other made up textile articles, other. The rate of duty will be 7 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.
You state that the manufacturing operations for the scrubbing sponge are as follows:
Production of the scrubbing sponge takes place at the Royal Sponge Mfg., Ltd. facility located in Brampton, Ontario, Canada. The nonwoven polyester scouring portion is manufactured in China in sheets that measure approximately 35.5 inches by 39.5 inches. The polyurethane adhesive/glue is manufactured in the United States and the polyurethane foam sponges and packaging (i.e. labels, boxes, baskets etc.) all are made in Canada. All of the foreign components are imported directly into the Canadian facility. The nonwoven scouring sheet is cut to size and shape and glued to the foam sponge and finished; all of which is done in the Canadian factory. The scrubbing sponge is fully assembled and packaged in a plastic bag or a plastic basket to be shipped directly to the United States from Canada.
NAFTA - LAW AND ANALYSIS:
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.
For goods classified in heading 6307, General Note 12/63.4 requires:
A change to headings 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.
Chapter 63:
Chapter rule 1: For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good.
The component that determines the classification of the good is the non-woven scouring layer classified under heading 5603, HTSUS. The scouring layer is said to be formed in China. It is imported in sheets measuring 35.5 inches by 39.5 inches into Canada where it is cut and assembled into the product, a scrubbing sponge classified under heading 6307, HTSUS.
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(t) 63.4. The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
COUNTRY OF ORIGIN - LAW AND ANALYSIS: Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995 in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21. Paragraph (c)(1) states, “The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.” As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable. Paragraph (c)(2) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:”
Paragraph (e) in pertinent part states, The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:
6307.90 The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
Since the nonwoven scouring sheet used in making the scrubbing sponge was formed in China, the sheet does not meet the terms of the tariff shift requirement of 19 C.F.R. 102.21. However, the NAFTA Preference Override set forth in 19 CFR 102.19 is applicable to the subject merchandise. Specifically, 19 CFR 102.19(a) states: “…if a good which is originating within the meaning of 181.1(q) of this chapter [the tariff shift under General Note 12, HTSUS] is not determined under …102.21 to be a good of a single NAFTA country, the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing, provided that a Certificate of Origin…has been completed and signed for the good.”
The scouring sheet was cut to shape and assembled in Canada and qualifies for NAFTA treatment according to General Note 12/63.4, HTSUS. Therefore, with a completed and signed Certificate of Origin, the good may be marked as a product of Canada.
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 Adleasia Lonesome via email at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division