CLA-2-44:OT:RR:NC:N1:130
Ms. Heather Jacobson
Nakachi Eckhardt & Jacobson P.C.
2815 Elliott Avenue
Seattle, WA 98121
RE: The tariff classification, country of origin, marking, and applicable trade program of a solid wood baseboard molding
Dear Ms. Jacobson:
In your letter, dated May 25, 2023, you requested a binding ruling on behalf of your client, Metrie Canada Ltd. (Metrie). The ruling was requested for the classification, country of origin, marking, and applicable trade programs for a solid wood baseboard molding. Product information and photos were submitted for our review.
The product under consideration is a coated, solid wood baseboard molding. You indicate in your letter that the molding is constructed of continuously shaped meranti wood (a tropical wood). The wood is end-jointed (finger-jointed) for length, but not edge-glued. You state that the molding is painted, embossed with a wood grain, printed, and coated with a clear acrylic latex copolymer solution. We note that Metrie imports many shaped wood products; this ruling addresses only the baseboard molding.
In your letter, you suggest that the baseboard molding is classifiable under subheading 4409.10.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other continuously shaped moldings of coniferous wood. We disagree. The molding is constructed of meranti wood, which is a tropical wood, not a coniferous wood. Meranti is specifically named in the Annex to the Explanatory Notes for Chapter 44, Appellation of Certain Tropical Woods. Also, the molding is coated with an acrylic latex clear coating. The Explanatory Notes to heading 4409 specifically exclude “Wood which has been surface worked beyond planing or sanding, other than painting, staining or varnishing…” Coating with acrylic latex constitutes surface working beyond painting, staining, or varnishing, and thus the baseboard molding is precluded from classification within heading 4409. This is well documented in Customs rulings, including New York rulings N270952, N016109, N016113, and N006249.
The applicable subheading for the coated solid meranti wood baseboard molding will be 4418.99.9195, HTSUS, which provides for Builders' joinery and carpentry of wood, including cellular wood panels and assembled flooring panels; shingles and shakes: Other: Other: Other: Other: Other. The rate of duty will be 3.2 percent ad valorem.
In your letter, you describe a scenario wherein lumber is profiled into molding shapes in Malaysia and then shipped to Canada for additional processing. You state that, in Canada, the moldings will be painted, embossed, printed, and then finished with a topcoat.
The United States-Mexico-Canada Agreement (USMCA) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if— the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; the good is a good produced entirely in the territory of one or more USMCA countries using non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o));
Subdivision (o) states that, in order to be subject to USMCA, the manufacturing in a USMCA country must result in “A change to headings 4401 through 4421 from any other heading, including another heading within that group.” Since the manufacturing results in a change from heading 4409 to 4418, this rule is met. Therefore, the baseboard molding qualifies for USMCA preferential treatment. The country of origin for duty purposes is Canada.
The "country of origin" is defined in Title 19, Code of Federal Regulations (CFR), Section 134.1(b) as:
…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 (hereinafter referred to as the part 102 Rules) will determine the country of origin.
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico.
Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11. 19 CFR Part 102.11(a) provides that the country of origin of a good is the country in which:
(1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
The baseboard molding is neither “wholly obtained or produced” nor “produced exclusively from domestic materials.” Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of the baseboard and paragraph (a)(3) must be applied next to determine the origin of the finished article. Section 102.20 (19 CFR 102.20) sets forth the applicable tariff change rules that address the current scenario. Goods classified in heading 4418 must undergo a change as follows: “A change to any other good of heading 4413 through 4421 from any other heading, including another heading within that group.” The unfinished wood moldings exported from Malaysia are classifiable as continuously shaped wood of heading 4409. The finished baseboards are classifiable in heading 4418. Therefore, the tariff shift rule has been met. The country of origin for marking purposes is Canada.
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.
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