CLA-2-44:OT:RR:NC:1:230
Mr. Harro Jakel
PanTim Wood Products, Inc.
15 Washington Ave.
Scarborough, ME 04074
RE: The tariff classification multilayer wood flooring panels
Dear Mr. Jakel:
In your letter, dated February 2, 2017, you requested a binding tariff classification ruling. The ruling was requested on multilayer wood flooring panels. Two samples were submitted for our review and will be retained for reference.
Both flooring samples consist of eight layers of wood, the grain of each layer running at a 90-degree angle to that of the successive layer. The samples are tongued and grooved on their edges and ends. Each sample has a 3mm-thick face ply of maple wood, and the substrate is composed of Baltic birch. The panels measure 1/2" in thickness, and no ply exceeds 6mm in thickness. They are 3” to 5” in width and up to 71” in length. The panels are coated with a clear urethane finish.
In your letter, you explain that the substrate of the product is Baltic birch plywood manufactured in Russia. The plywood is imported into the United States, where it is cut into strips, laminated with the maple face ply, and tongued and grooved. You state that the complete flooring strips are then shipped to Canada, where they will be coated with urethane.
The flooring panels meet the definition of “plywood”, which is specifically provided for under heading 4412, Harmonized Tariff Schedule of the United States (HTSUS). “Plywood” is defined in the Explanatory Notes to the Harmonized System (ENs) as “consisting of three or more sheets of wood glued and pressed one on the other and generally disposed so that the grains of successive layers are at an angle.” The instant panels consist of 8 layers and the grains of each layer run at a 90 degree angle to that of the successive layers. Therefore, the panels are classifiable in heading 4412, HTSUS.
Because the substrate plywood from Russia is classifiable in heading 4412, HTSUS, and after manufacturing in the United States and Canada is still classifiable in heading 4412, HTSUS, there is no substantial transformation that takes place. Therefore, the country of origin for duty purposes is Russia. However, because there is manufacturing completed in the United States and Canada, we consider North American Free Trade Agreement (NAFTA) rules.
General Note 12, HTSUS, incorporates Article 401 of the NAFTA into the HTSUS. General Note 12(a)(i) provides, in pertinent part:
(a) Goods originating in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided herein. For the purposes of this note--
(i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and goods enumerated in subdivision (u) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.
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—
(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;
Subdivision (t) states that, in order to be subject to NAFTA, the manufacturing in a NAFTA country must result in a change as follows: A change to headings 4401 through 4421 from any other heading, including another heading within that group. Because the substrate plywood from Russia is classifiable in heading 4412, HTSUS, and after manufacturing in the United States and Canada is the flooring panels are still classifiable in heading 4412, HTSUS the rule is not met; the panels therefore do not qualify for NAFTA preferential treatment.
With regard to country of origin and marking of the flooring panels, 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. Pursuant to 19 CFR Section 134.1(b), the country of origin is the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to a foreign article in the United States must effect a substantial transformation in order to render the final product a good of the U.S. As noted, no substantial transformation takes place in the U.S. However, for a good manufactured in a NAFTA country, the NAFTA Rules of Origin (set forth in 19 CFR Part 102) will determine the country of origin for marking purposes. Because the flooring panels are partly manufactured in two NAFTA countries (the U.S. and Canada), the NAFTA rules govern the current scenario.
Section 102.20 provides that, for goods of heading 4412, HTSUS, the manufacturing in a NAFTA country must result in a change to surface-covered plywood of heading 4412 from any other plywood that is not surface covered or is surface-covered only with a clear or transparent material which does not obscure the grain, texture, or markings of the face ply. The flooring panels, which are surface-covered with urethane in Canada, meet this rule. Therefore, the country of origin of the flooring panels, for marking purposes only, is Canada.
In summary, the country of origin for duty purposes is Russia. Therefore, the duty rate for the goods entered from Canada into the United States will be the rate for goods imported from Russia. The country of origin for marking purposes only, is Canada. The wood flooring shall be marked with Canada as the country of origin.
The applicable subheading for the multilayer wood flooring panels will be 4412.32.3225, 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: 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: Wood flooring. 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 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