CLA-2-44:OT:RR:NC:1:230
Mr. Derick Roy
Wickham Hardwood Flooring
1031 7E Rang
Wickham, Quebec J0C 1S0
CANADA
RE: The country of origin and classification of multilayer wood flooring panels
Dear Mr. Roy:
In your letter, dated March 7, 2017, you requested a binding country of origin ruling. The ruling was requested on multilayer wood flooring panels. Product information was submitted for our review.
In your letter, you describe a multilayer flooring product consisting of a 2mm-thick oak or maple face ply laminated onto a 7.8mm-thick high density fiberboard (HDF) core, and backed with a 1.2mm-thick birch veneer. The panels are imported in widths of 3.5” and 5”, and in lengths of 15” to 48”. The panels are continually shaped on edges and ends with an interlocking “click” mechanism for installation. The panels are stained and coated with a clear material that doesn’t obscure the grain of the wood.
While you do not request a classification ruling, we must address the classification of the instant product. You suggest that this product is classifiable under subheading 4412.32.0620, Harmonized Tariff Schedule of the United States (HTSUS). This classification provides for Plywood, veneered panels and similar laminated wood: Other plywood consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm in thickness: Other, with at least one outer ply of nonconiferous wood: Not surface covered, or surface covered with a clear or transparent material which does not obscure the grain, texture or markings of the face ply: With a face ply of birch (Betula spp.): Panels not exceeding in any dimension 3.6 mm in thickness, 1.2 m in width and 2.2 m in length.
This description does not describe your product. First, the product does not meet the definition of “plywood” as set for in the Explanatory Notes to the Harmonized System (ENs). The definition states that plywood “consist(s) of three or more sheets of wood glued and pressed one on the other and generally disposed so that the grains of successive layers are at an angle.” The panels do not meet this description as the HDF core does not have a grain. Therefore, the requirement that the grains of the layers run at an angle to that of the successive layers is not met. Second, the HDF ply exceeds 6mm in thickness. Third, the product does not have a face ply of birch, but of oak or maple. And finally, the panels do not meet the dimension requirements of this subheading.
The panels, instead, meet the definition of a “veneered panel”, as set forth in the ENs. “Veneered panels” are defined as “panels consisting of a thin veneer of wood affixed to a base, usually of inferior wood, by glueing under pressure.” Veneers are defined in heading 4408, HTSUS, as a thin layer of wood not exceeding 6mm in thickness. As the face ply measures 2mm in thickness, this definition is met. Since the veneer is laminated onto a substrate of HDF backed with a birch veneer, the definition of “veneered panel” has been met.
The applicable subheading for the multilayer wood flooring panels will be 4412.99.5105, HTSUS, which provides for Plywood, veneered panels and similar laminated wood: Other: Other: With at least one outer ply of nonconiferous wood: Other: Other: Wood flooring. The rate of duty will be free.
You present a set of circumstances wherein the wood flooring panels will be manufactured in China and will be shipped to Canada for sorting, sanding, staining, varnishing, and packaging before being shipped to the United States. We note that the flooring panels will be classifiable in subheading 4412.99.5105, HTSUS, both before and after the production steps performed in Canada. Because there is manufacturing completed in Canada, we consider North American Free Trade Agreement (NAFTA) rules.
General Note 12, HTSUS, incorporates Article 401 of the NAFTA into the HTSUS. General Note 12(a)(i) provides, in pertinent part:
(a) Goods originating in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided herein. For the purposes of this note--
(i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and goods enumerated in subdivision (u) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.
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—
(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;
Subdivision (t) states that, in order to be subject to NAFTA, the manufacturing in a NAFTA country must result in a change as follows: A change to headings 4401 through 4421 from any other heading, including another heading within that group. Because the flooring panels from China are classifiable in heading 4412, HTSUS, and after manufacturing in Canada, are still classifiable in heading 4412, HTSUS the rule is not met; the panels therefore do not qualify for NAFTA preferential treatment. Therefore, the country of origin for duty purposes in China.
With regard to country of origin for marking of the flooring panels, 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. No operations take place in the U.S. However, the panels are manufactured in part in a NAFTA country, and thus, the NAFTA Rules of Origin (set forth in 19 CFR Part 102) will determine the country of origin for marking purposes.
Section 102.20 provides that, for goods of heading 4412, HTSUS, the manufacturing in a NAFTA country must result in a change to surface-covered plywood of heading 4412 from any other plywood that is not surface covered or is surface-covered only with a clear or transparent material which does not obscure the grain, texture, or markings of the face ply. The flooring panels, which are surface-covered with stain and a clear material in Canada, meet this rule. Therefore, the country of origin of the flooring panels, for marking purposes only, is Canada.
In summary, the country of origin for duty purposes is China. Therefore, the duty rate for the goods entered from Canada into the United States will be the rate for goods imported from China. The country of origin for marking purposes only, is Canada. The wood flooring shall be marked with Canada as the country of origin.
The instant product may be subject to antidumping duties or countervailing duties for imports of multilayer wood flooring from the People’s Republic of China. While the country of origin for marking purposes only is Canada, the panels remain Chinese in origin. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection. You can contact them at http://www.trade.gov/ia/ (click on “Contact Us”). For your information, you can view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and countervailing duty investigations”), and you can search AD/CVD deposit and liquidation messages using the AD/CVD Search tool at http://addcvd.cbp.gov/. The wood flooring in question, which is tongued and grooved with an interlocking profile, may be subject to an ITC exclusion order dealing with certain laminated floor panels (ITC Investigation No. 337-TA-545). The determination of whether your flooring panels are subject to the ITC Exclusion Order will be made independently of the tariff classification ruling. For further information on admissibility please contact your local Customs office prior to importation of the goods. If you require a written ruling on whether the exclusion order applies to your flooring panels, you should submit a ruling request with a sample of the flooring panels to the following office: U.S. Customs and Border Protection, IPR & Restricted Merchandise Branch, Regulations and Rulings, 799 9th Street N.W. – 7th Floor, Washington, DC 20229-1177.
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 the World Wide Web at https://hts.usitc.gov/current.
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,
Steven A. Mack
Director
National Commodity Specialist Division