CLA-2-44:OT:RR:NC:N1:130
Mr. Marco Bussotti
Bourn Commodities Trading Group PLLC
30 OLD TUCSON RD #3
Nogales, AZ 85621
RE: The tariff classification and country of origin of unassembled wood pallets from Mexico
Dear Mr. Bussotti:
In your letter, dated August 4, 2021, you requested a binding ruling for tariff classification. The request was returned to you for additional information, which was received by this office on September 21, 2021. In your second submission, you also requested a country of origin determination. The ruling was requested on unassembled wood pallets. Product information and diagrams were provided for our review.
The products under consideration are two similar unassembled wood pallets for agricultural use. You state that the pallets are constructed to meet the standardized guidelines for food industry pallets developed by the Grocery Manufacturers Association. The pallets each consist of 15 pieces of cut and shaped wood that are ready for assembly into pallets without further manufacturing. The pallet components are shipped together in exact quantities and sizes to be assembled into a specific number of pallets after importation into the U.S.
The classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the General Rules of Interpretation (“GRIs”), taken in order. GRI 2 provides that unassembled goods are classified in the same manner as assembled goods:
Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
Therefore, complete pallet kits entered in unassembled condition are classifiable as wooden pallets.
The applicable subheading for the unassembled wood pallets will be 4415.20.8000, HTSUS, which provides for Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums, of wood; pallets, box-pallets and other load boards, of wood; pallet collars of wood: Pallets, box-pallets and other load boards; pallet collars: Other. The rate of duty will be 10.7 percent ad valorem.
In your submission you also request a country of origin determination for the pallets. Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)) provides that:
“Country of origin" means the country of manufacture, production or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter will determine the country of origin.
Because the pallets are manufactured in part in Mexico, the tariff shift rules set out in 19 CFR 102.20 will be considered. For a good of heading 4415, there must be “(a) change to any other good of heading 4412 through 4421 from any other heading including a heading from within that group.”
You describe a scenario wherein milled lumber of heading 4403, originating in the United States, is shipped to Mexico for pallet manufacturing. In Mexico, the wood is cut to customer dimensional specifications. The pallet stringers are cut to shape to accommodate forklift blades. The pallet components will be subjected to heat treating, stamping, and quality control operations. The components are then packaged in precise numbers for assembly into a specific number of pallets. Under these circumstances the tariff shift rule noted above is met, as lumber of heading 4403 is changed to pallets of heading 4415. We therefore find the country of origin of the pallets to be Mexico.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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