CLA-2-48:OT:RR:NC:1:130
Mr. Brian D. Rowe
Universal Logistics, Inc.
125 Commerce Valley Drive West
Suite 750
Thornhill, Ontario L3T 7W4
CANADA
RE: The classification of, and applicability of the North American Free Trade Agreement (NAFTA) to, paper muffin cups
Dear Mr. Rowe:
In your letter, dated July 31, 2017, you requested a binding classification and NAFTA status ruling on behalf of your client, Tielman North America Ltd. The request was returned to you for additional information, which was received by this office on September 7, 2017. The ruling was requested on printed paper muffin cups. Product information and photos were submitted for our review.
In your letter, you describe printed paper muffin cups that are manufactured from greaseproof cup stock paper. Squares of printed paper are pressed into cup shapes with the paper’s corners pointing upward. The cups are described as “tulip cups”. The greaseproof paper consists entirely of fibers obtained by the mechanical process. The paper weighs approximately 65 grams per square meter, and the side of the paper that comes into contact with the baked food product is coated with silicone for ease of release. The paper is printed and cut into squares in a single operation. You indicate that the paper is unbleached and has negligible ash content.
You suggest that the muffin cups are classifiable under subheading 4823.69.0020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Trays, dishes, plates, cups and the like, of paper or paperboard, namely cups and round nested food containers. While we agree that the muffin cups are classifiable in heading 4823, HTSUS, we do not agree that they are “cups and round nested food containers”. We find that use of the word “cups” for the instant item is merely a descriptive word. The instant muffin cups are not tableware, such as dishes, plates, bowls, and cups. The muffin cups are not nesting food containers, and do not, in fact, contain food as tableware would. Instead, the muffin cups are more akin to a printed wrapper. The Explanatory Notes to heading 4823 differentiate tableware from “other wrappings cut to size”; we find that “other wrappings cut to size” more specifically identifies the muffin cups.
The applicable subheading for the printed paper muffin cups will be 4823.90.6700, HTSUS, which provides for Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers: Other: Other: Other: Of coated paper or paperboard: Other. The rate of duty will be free.
You present a set of circumstances wherein silicone-coated, greaseproof cup stock paper originates in Canada or Sweden. The printing ink also originates in Sweden. In Canada, the paper, imported or sourced in 27”-wide rolls, is simultaneously cut in to 6.3” squares and printed. The printed squares are then pressed into the muffin cup shape. The muffin cups are then packaged for distribution.
Because there is manufacturing completed in Canada, we consider 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 specifically identified tariff change. For muffin cups where the paper originates in Canada, the only non-originating material that must undergo such a change is the printing ink originating in Sweden. When the paper and ink originate in Sweden, both the paper and ink must undergo such a tariff change. We do note, however, that the ink may be considered to be a de minimis component of the final muffin cups. We will nonetheless consider the tariff change rules of Subdivision (t).
Subdivision (t), Note 7, Chapter 48, provides for several possible tariff changes for goods classifiable in heading 4823. While the final muffin cups are classifiable in heading 4823, none of the tariff change rules set forth in Note 7 apply to the instant product. However, we note an intermediate change during manufacturing that satisfies a tariff change rule for heading 4811. Subdivision (t), Note 3A(B), Chapter 48 sets forth:
A change to paper or paperboard in rectangular (including square) sheets with the larger dimension not exceeding 36 cm or the other dimension not exceeding 15 cm in the unfolded state of heading 4811 from strips or rolls of a width exceeding 15 cm of heading 4811, paper or paperboard in rectangular (including square) sheets with the larger dimension exceeding 36 cm and the other dimension exceeding 15 cm in the unfolded state of heading 4811, floor coverings on a base of paper or paperboard of heading 4811 or any other heading, except from headings 4817 through 4823;
The rolls of silicone-coated, greaseproof cup stock originating in Canada or imported from Sweden are classifiable in heading 4811. The rolls measure 27” wide, or approximately 68.6cm. During processing in Canada, those rolls of paper are simultaneously printed and cut into square sheets measuring 6.3”, or 16cm, on each side. The above rule provides for a change from rolls of 4811 paper exceeding 15cm in width to sheets of 4811 paper with the larger dimension not exceeding 36cm. The instant paper is changed from 68.6cm rolls to 16cm squares, and remains classifiable in heading 4811. Furthermore, the ink also meets this rule as the cutting and printing are completed in a single operation; the coated paper in rolls is classifiable in heading 4811, while the cut and printed paper is still classifiable in heading 4811; printed paper is specifically provided for in heading 4811. Additionally, the change in classification of the ink in Chapter 32 to a printed paper good of Chapter 48 constitutes a substantial transformation, which, in accordance with Title 19, Code of Federal Regulations, Section 134 (19 CFR 134), confers country of origin. While the cutting and printing are technically only an intermediary step in the manufacturing of the muffin cups, the originating rule is still met.
General Note 12(a)(i) above also requires that the imported goods “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…” Title 19 CFR 102.20 sets forth the terms of those marking rules. This section requires that the manufacturing in a NAFTA country must result in a change identical to that set forth in Subdivision (t), Note 3A(B), Chapter 48, above. As it has already been established that the paper meets this rule, the country of origin of the muffin cups, for marking purposes, is Canada. Because the muffin cups meet all of the requirements of General Note 12(b)(ii)(A) above, they qualify for NAFTA preferential treatment regardless of the source country of the paper or ink.
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