CLA-2-59:OT:RR:NC:TA:350
Ms. Kimberly Whitworth
Maddocks Industrial Filter Division
663 Woodward Avenue
Hamilton, ON L8H 6P3
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of an air filter, from Canada; Article 509.
Dear Ms. Whitworth:
In your letter dated March 7, 2013, you requested a ruling on the status of an “OTR-14 Round Filter”, for use in automobile engines, from Canada, under the NAFTA. You also inquired about the marking and country of origin. All of these issues will be addressed below.
You write that these filters are constructed from 100 percent polyester filter media of knit construction that is sourced from Canada. Additionally, the charcoal aluminum mesh, stainless steel clips and black plasticizer are all of U.S. origin. It is these four components that are processed in Canada to form a complete air filter.
While you suggest that classification of this product is proper in tariff subheading 8421.31.00, HTS, which provides for filtering or purifying machinery and apparatus, for liquids and gases… and parts thereof, this is not correct. Section XVI, Note 1(e), which governs the classification of all products in this section which includes Chapter 84, reads, "this section does not cover “transmission or conveyor belts of textile material ... or other articles of textile material for technical uses (heading 5911)."
Following on the tenets of that tariff exclusion, the applicable tariff provision for the filter will be 5911.90.0080, Harmonized Tariff Schedule of the United States (HTSUS), which provides for textile products and articles, for technical use. The general rate of duty will be 3.8 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 World Wide Web at http://www.usitc.gov/tata/hts/.
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 upon the facts provided, the goods described above qualify for NAFTA preferential treatment because they meet the requirements of HTSUS General Note 12(b)(i) above. That is, the filter has been wholly obtained or produced in the territory of NAFTA. As such, the goods will therefore, be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
Additionally, you inquired about the country of origin and marking for the above captioned product. To that end, please be aware of the following textile rules of origin that apply in this case.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995 in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.
Paragraph (c)(1) states, “The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.” As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (c)(2) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:” Paragraph (e) in pertinent part states,
The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:
HTSUS 5911.90 Tariff shift and/or other requirements
This rule states in pertinent part that “if the good is a made up article other than a good of yarn, rope, cord or braid, a change to subheading 5911.90 from any heading including a change from another good of heading 5911, provided that the change is the result of the good being wholly assembled in a single territory or insular possession”.
In that regard, please note that the knit filter media is classifiable in heading 6002, the charcoal aluminum mesh in heading 7616, the stainless steel clips in 7220 and the black plasticizer in heading 3904. As such, and noting that the finished product was wholly assembled in the territory of Canada from these four components which are all outside heading 5911, the goods have met the tariff shift requirement described above.
Once again, as the subject filter is wholly assembled in the territory of Canada from goods classifiable in other headings, the requirements of Section 102.21(c)(2) have been met.
HOLDING:
The country of origin of the air filter is Canada. The marking “Made in Canada”, as you suggest, would be acceptable.
The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
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 Deborah Walsh at (646) 733-3044.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division