CLA-2-73:OT:RR:NC:N1:113
Mr. Sean James Dinsmore
North Hanger Company Ltd.
9 Hershey Drive, P.O. Box 250
Smiths Falls, Ontario K7A4TI Canada
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of steel wire garment hangers from Canada; Article 509
Dear Mr. Dinsmore:
In your letter dated April 13, 2017, you requested a ruling on the status of steel wire garment hangers from Canada under the NAFTA. In response to our request for additional information, our office received answers to our questions in your email dated April 10, 2017 and your letter dated April 13, 2017. Photographs of the steel hangers were submitted for our review.
The products under consideration are identified as steel wire garment hangers. You stated in your letter that the hangers are comprised of galvanized steel wire. Each hanger is approximately 2.20 to 2.51 mm (millimeters) in diameter with a latex coating on the bottom bar and weighs approximately 35 grams. The hanger has a triangular base and the top is twisted with a hook so the hangers can be hung.
In your request, you indicated that the wire is wholly obtained and produced in China. The hangers will be formed, coated and packaged in a manufacturing plant in Canada and exported to the United States. You stated in your email that the manufacturing processes performed on the wire in Canada include taking raw wire on coils and threading the wire into hanger making machines, bending the wire into the proper shape and producing a twisted hook on the top for hanging, passing the hangers through a glue machine that puts a latex coating on the bottom bar and sending the hangers through a heat tunnel to dry the glue on the base bar. After the glue is dried, the hangers are packaged in printed cardboard boxes for resale to the dry cleaning and industrial laundry industry.
The applicable tariff provision for the steel wire garment hangers will be 7326.20.0020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other articles of iron or steel, articles of iron or steel wire, garment hangers. The general rate of duty will be 3.9 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.
Based on the facts provided, the steel wire garment hangers described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). The subject hangers 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 Ann Taub at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division