MAR-2 OT:RR:NC:1:117
Mr. Michael Snarr
Baker & Hostetler LLP
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5304
RE: THE COUNTRY OF ORIGIN MARKING OF ALUMINUM ALLOY BILLETS; ARTICLE 509 AND NAFTA ELIGIBILITY.
Dear Mr. Snarr:
This is in response to your letter dated April 15, 2014, on behalf of your client, Aluminicaste Fundicion de Mexico, requesting a ruling on the country of origin of aluminum alloy billets. You also asked if the aluminum billets qualify for preferential treatment under the North American Free Trade Agreement (NAFTA). A marked sample was not submitted with your letter for review.
You state that used aluminum materials (feedstock) from China consisting of pipes, tubes, profiles, bars, rods and plates all made from aluminum alloy will be shipped to Mexico where it will be melted down and manufactured into aluminum alloy billets by Aluminicaste. In Mexico, the feedstock will be segregated and undergo a chemical analysis. Based on the chemical composition, Aluminicaste determines the quantity and type of additional alloying elements that need to be included with the feedstock as it is melted in the furnace.
Once the correct alloy is achieved, the metal is heated to the proper temperature and then transferred to the casting station where it is poured into molds. After the billets are cooled, they are made into diameters ranging from 6 to 10 inches, cut-to-length and marked to show the alloy, heat number, etc. The billets will ultimately be imported into the U.S. and will be used primarily for extrusions as well as forgings and flat-rolled products.
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. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a “good of a NAFTA country” are also determined in accordance with Annex 311 of the North American Free Trade Agreement (“NAFTA”), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.
However, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.
Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) states 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 section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts presented in this case, we note that the applicable tariff provision for the aluminum alloy billets will be 7601.20.9045, Harmonized Tariff Schedule of the United States (HTSUS), which provides for unwrought aluminum, aluminum alloys, other, other, other, of uniform circular cross throughout its length, not in coils. The subject billets are neither wholly obtained or produced in Mexico nor produced exclusively from domestic materials. Therefore, Sections 102.11(a)(1) and 102.11(a)(2) are not applicable. Since the country of origin still cannot be determined, we look to Section 102.11(a)(3).
Section 102.11(a)(3) provides that the country of origin is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 CFR 102.20. Since we have determined that the aluminum alloy billets are classified in subheading 7601.20.9045, HTSUS, the applicable tariff shift rule found in section 102.20(n) requires a change to heading 7601 through 7604 from any other heading, including another heading within that group”. Based on the information provided, we find that each of the foreign materials (feedstock) incorporated into the aluminum alloy billets meet the tariff shift requirement. Therefore, the country of origin for marking purposes is Mexico.
In addition, you inquire whether the subject billets qualify for preferential treatment under the NAFTA. 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.
The aluminum alloy billets are classified in subheading 7601.20.9045, HTSUS. They are neither wholly obtained nor produced entirely in the territory of Canada, Mexico and/or the United States. General Note 12(t)/Chapter 76(1) requires a change to heading 7601 from any other chapter. Since each of the non-originating Chinese materials (feedstock) used to make the billets are classified in various headings in Chapter 76 and are not classified in another chapter of the HTSUS, the tariff shift requirement has not been made. As such, the aluminum alloy billets do not qualify for preferential treatment under the NAFTA.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).
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 Mary Ellen Laker at [email protected].
Sincerely,
Gwenn Klein Kirschner
Acting Director
National Commodity Specialist Division