CLA-2-44:OT:RR:NC:1:230
Ms. Sandra Hewines
Northern Wide Plank Flooring, Inc.
5930 Lloydtown Aurora Road
Schomberg, Ontario L0G 1T0
CANADA
RE: The tariff classification, country of origin, and status under the North American Free Trade Agreement (NAFTA) of multilayer wood flooring panels
Dear Ms. Hewines:
In your letter, dated March 20, 2017, you requested a binding classification and trade program status ruling. The request was returned to you for additional information, which was received by this office on April 6, 2017. The ruling was requested on multilayer wood flooring panels. Samples and product information were submitted for our review.
Samples of three wood flooring products were reviewed. The first panel, manufactured in Belgium, is constructed of three layers of wood and measures 7 3/8” in width and 15mm in thickness. You do not identify the length of the panels at time of imporation. The face ply consists of a 4mm-thick French oak veneer, the core is 9mm-thick lumber blocks, and the back ply is a 1mm-thick veneer. The second panel, manufactured in Lithuania, measures 7” wide and 20mm in thickness, and is constructed of 12 layers of wood. The face ply consists of a 5mm-thick European oak veneer, and the substrate consists of multilayer plywood wherein no ply exceeds 6mm in thickness. The third panel, whose origin will be discussed herein, measures 5 7/8” wide and 20mm in thickness, and is constructed of 12 layers of wood. The face ply is 5mm in thickness and may consist of hemlock, elm, oak, or walnut wood. The substrate consists of multilayer plywood wherein no ply exceeds 6mm in thickness. Within each panel, the grain of each layer runs at a 90-degree angle to that of the successive layers.
Additional U.S. Note 4(b) to Chapter 44, Harmonized Tariff Schedule of the United States (HTSUS) states that Heading 4418, HTSUS, includes multi-layer assembled flooring panels having a face ply 4 mm or more in thickness. As the expression, “multi-layer assembled flooring panels” is not defined, we turn to the common meaning of the terms. We interpret the expression to mean a panel that is made of multiple layers glued one on top of the next, is assembled from defined pieces, such as veneers or blocks, to form a whole, is made of wood or has the essential character of wood, and is specifically designed for use as the decoratve and durable covering for a structural floor. All three of the sample panels meet this description, thus, they are classifiable in heading 4418, HTSUS. You suggest that the panels are classifiable in subheading 4418.99.9005, HTSUS. However, they are classifiable in a subheading that more specifically describes their construction.
The applicable subheading for each of the multilayer wood flooring panels will be 4418.75.7000, HTSUS, which provides for Builders' joinery and carpentry of wood, including cellular wood
panels and assembled flooring panels; shingles and shakes: Assembled flooring panels: Other, multilayer: Other. The rate of duty will be 5 percent ad valorem.
In your submission, you describe a scenario wherein the third panel is constructed from Russian birch plywood platforms that have been imported into Canada for further manufacturing into flooring panels. You state that, in Canada, the face ply veneers are cut and the birch plywood is sawn into planks. The face plies are glued onto the plywood planks, and the planks are tongued and grooved, stained, and finished. The finished panels will be exported to the United States. We note that the Russian plywood substrate meets the definition of “plywood” as set forth in the Explanatory Notes (ENs) to heading 4412, which states that plywood “consist(s) 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.” Therefore, the plywood substrate is classifiable in heading 4412, HTSUS. Because manufacturing of the flooring panels is completed in 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 plywood substrate imported into Canada is classifiable under heading 4412, HTSUS, and because the final flooring product is classifiable in heading 4418, HTSUS, this rule is met; the panels therefore qualify for NAFTA preferential treatment.
With regard to country of origin for 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 another country must effect a substantial transformation in order to render the final product a good of the other country. The change in Canada from heading 4412, HTSUS, to heading 4418, HTSUS, constitutes a substantial transformation and renders Canada the country of origin. However, as the panels are manufactured in a NAFTA country, the NAFTA Rules of Origin (set forth in 19 CFR Part 102) will officially determine the country of origin for marking purposes.
Section 102.20, Customs Regulations, provides that, for goods of heading 4418, HTSUS, the manufacturing in a NAFTA country must result in a change to any other good of heading 4413 through 4421 from any other heading, including another heading within that group. Because the manufacturing in Canada results in a change to heading 4418, HTSUS, from heading 4412, HTSUS, the flooring panels meet this rule. Therefore, the country of origin of the flooring panels, for both duty and marking purposes, is Canada.
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