MAR-2-44:OT:RR:NC:N5:130
Mr. Ian Clarke
Clarke Veneers and Plywood
3000 Old Canton Road
Jackson, MS 39216
RE: The country of origin, marking, and applicability of trade programs for plywood panels
Dear Mr. Clarke:
In your letter, dated July 13, 2023, you requested a binding ruling. The request was for the country of origin, marking, and applicability of trade programs for imports of plywood panels. Product information was submitted for our review.
You outline a scenario wherein veneer-core plywood platforms (plywood panels without a face or back veneer ply), made wholly of Gabonese okoume wood (Aucoumea klaineana, a tropical wood), are manufactured in Gabon. The plywood platforms are constructed of several wood veneers laminated together, none exceeding 6mm in thickness, and the grain of each veneer is at an angle to those of the adjacent veneers. You indicate that the complete panels measure 1/4” to 2” in thickness, 30” to 62” in width and 87” to 144” in length. The platforms are subsequently shipped to Mexico where face and back veneer plies will be laminated onto each. The face and back veneer plies will consist of U.S. and Canadian hardwoods, including maple, walnut, red oak, alder, white oak, and others (all non-coniferous woods). The complete plywood panels will be uncoated. The plywood platforms are classifiable under heading 4412, which provides for plywood, veneered panels, and similar laminated wood. The finished plywood imported from Mexico into the United States is also classifiable under heading 4412.
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));
Since the plywood panels contain non-originating materials, they would not be considered as goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and GN 11(b)(ii). Thus, we must next determine whether the plywood panels qualify under GN 11(b)(iii). 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 Gabonese plywood platforms are classifiable in heading 4412, and the finished plywood panels are also classifiable in heading 4412, the rule is not met. Therefore, the goods are not originating. Therefore, the country of origin for duty purposes is NOT Mexico and the plywood panels would NOT qualify for beneficiary treatment under the USMCA.
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 complete plywood panels are 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 plywood panels 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 4412 must undergo a change as follows: “A change to heading 4412 from any other heading, except from plywood of subheading 4418.73 through 4418.79.” Because the Gabonese plywood platforms are classifiable in heading 4412 and the complete plywood panels are also classifiable in heading 4412, the tariff shift rule is not met.
Since an analysis of section 102.11(a) has not produced a country of origin determination, we turn to section 102.11(b) of the regulations. Section 102.11(b) states, in relevant part:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good….
In determining the “essential character” of the finished good, Section 102.18(b)(1) provides, in relevant part:
(b)(1) For purposes of identifying the material that imparts the essential character to a good under § 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the § 102.20 specific rule or other requirements applicable to the good. For purposes of this paragraph (b)(1): … (ii) Materials that may be considered include materials produced by the producer of the good and incorporated in the good. For example, if a producer of a good purchases raw materials and converts those raw materials into a component that is incorporated in the good, that component is a material that may be considered for purposes of identifying the materials that impart the essential character to the good, provided that the component is classified in a tariff provision from which a change in tariff classification is not allowed under the specific rule…
The only material that does not undergo the applicable tariff shift in 19 C.F.R. § 102.20(d) is the plywood platforms from Gabon. Therefore, for the completed plywood panels exported from Mexico, the country of origin will be Gabon. The plywood should be marked accordingly with their country of origin in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit. “Product of Gabon” and “Made in Gabon” are both acceptable markings. General Note 16(b), Harmonized Tariff Schedule of the United States (HTSUS) provides for the African Growth and Opportunity Act (AGOA). The Gabonese Republic is a beneficiary country under the AGOA. The AGOA requires that imports from an AGOA country must be shipped directly to the United States in order to be subject to beneficiary treatment:
Whenever an eligible article which is a good of a designated beneficiary sub-Saharan African country enumerated in subdivision (a) of this note is imported directly into the customs territory of the United States, such article shall be entitled to receive the duty-free treatment provided for herein…
Because the plywood platforms from Gabon are shipped to Mexico, where they are further manufactured, the finished plywood is not “imported directly (from Gabon) into the customs territory of the United States”. The goods are therefore not entitled to beneficiary treatment under the AGOA.
The completed plywood panels are classifiable under subheading 4412.33.3275, HTSUS, which 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 of the species alder (Alnus spp.), ash (Fraxinus spp.), beech (Fagus spp.), birch (Betula spp.), cherry (Prunus spp.), chestnut (Castanea spp.), elm (Ulmus spp.), eucalyptus (Eucalyptus spp.), hickory (Carya spp.), horse chestnut (Aesculus spp.), lime (Tilia spp.), maple (Acer spp.), oak (Quercus spp.), plane tree (Platanus spp.), poplar and aspen (Populus spp.), robinia (Robinia spp.), tulipwood (Liriodendron spp.) or walnut (Juglans spp.): 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: Other: Other: Other: Other: Not surface covered. The rate of duty will be 8 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 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