CLA-2-39:OT:RR:NC:N:5: 137
Rachel Stallings
FNS Customs Brokers
18620 Harmon Ave Carson, CA 90746
RE: The tariff classification, country of origin and eligibility of the United States-Mexico-Canada Agreement (USMCA) of a polyethylene pouch with spout from Mexico
Dear Ms. Stallings:
In your letter dated July 8, 2024, you requested a binding ruling on the tariff classification, country of origin and eligibility of a polyethylene pouch with spout under the United States-Mexico-Canada Agreement (USMCA).
The product under consideration is identified as Laminated Pouch with Spout. It is a lightweight polyethylene pouch with an incorporated spout. It is printed and designed for transporting or packaging small amounts of juices, baby food, etc. for retail sale.
The polyethylene film is manufactured and printed in China. Likewise, the plastic spout is manufactured in China. The polyethylene film and plastic spouts are shipped from China to Mexico for final processing.
In Mexico, the film is unwound from rolls onto a processing machine that will precisely cut, and heat seal the film into pouches. The spouts are then incorporated into the finished pouches.
Classification:
The applicable subheading for the polyethylene pouch with spout will be 3923.21.0095, Harmonized Tariff Schedule of the United States (HTSUS), which provides for articles for the conveyance or packing of goods, of plastics: sacks and bags (including cones): of polymers of ethylene: other: other. The general rate of duty will be 3 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 at https://hts.usitc.gov/current.
USMCA:
The 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-
(i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
(iii) 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 polyethylene pouch with spout contains non-originating ingredients, they are not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor are the products produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the product qualifies under GN 11(b)(iii). As previously noted, the polyethylene pouch with spout is classified under subheading 3923.21.0095, HTSUS. The applicable rule of origin for goods classified under subheading 3923.21.0095, HTSUS, is in GN 11(o)/ 39.2, HTSUS, which provides A change to headings 3916 through 3926 from any other heading, including another heading within that group.
The polyethylene film as imported to Mexico from China is classified in 3920.10, HTS. The plastic spout, as imported to Mexico from China, is classified in 3926.90, HTS. Both components of the pouch meet the change in tariff requirement. Therefore, the polyethylene pouch with spout would be eligible for preferential tariff treatment under the USMCA.
Marking:
The marking statute, 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.
The "country of origin" is defined in 19 CFR 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.
Applied in sequential order, 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 polyethylene pouch with spout 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 polyethylene pouch with spout, and paragraph (a)(3) must be applied next to determine the origin of the finished article. The polyethylene pouch with spout is classified under subheading 3923.21.0095, HTSUS. The tariff shift requirement in Part 102.20 for the polyethylene pouch with spout at issue states:
A change to heading 3922 through 3926 from any other subheading, including another heading within that group, except for a change to heading 3926 from articles of apparel and clothing accessories, other articles of plastics, or articles of other materials of headings 3901 to 3914 or heading 9619.
The polyethylene pouch with spout meets the tariff shift requirement. Therefore, the country of origin for marking purposes of the polyethylene pouch with spout will 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. Additionally, we note 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 and Border Protection 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, please contact National Import Specialist Christina Allen at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division