CLA-2-44:OT:RR:NC:1:130
Mr. Joseph F. Walter
Livingston International
670 Young Street
Tonawanda, NY 14150
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of multilayer wood flooring panels
Dear Mr. Walter:
In your letter, dated February 2, 2018, you requested a binding classification and trade program status ruling on behalf of your client, Les Bois de Plancher PG, Inc. (PGI). The request was returned to you for additional information, which was received by this office on April 10, 2018. The ruling was requested on multilayer wood flooring panels. Samples and product information were submitted for our review.
Samples of two different flooring styles were reviewed. The first is identified as “Inspire”, and the second as “Distinct”. Inspire is a 6-ply flooring panel measuring approximately 16mm in thickness, with a face ply measuring 2mm in thickness. The face ply consists of birch, Red Oak, or maple wood (all non-coniferous woods), and the back ply is fir or spruce (coniferous woods). None of the plies exceeds 6mm in thickness. The grain of each ply runs at an angle to that of the subsequent plies. The panels range from 5” to 7” in width and from 12” to 84” in length at time of importation. The panels are tongued and grooved on edges and ends and are coated with stain and/or polyurethane.
Distinct is a flooring panel consisting of two plies, a non-coniferous face ply laminated onto a base of pine (coniferous) lumber fingers. The panel measures approximately 16mm in thickness and the face ply measures 3mm in thickness. The face ply consists of birch, Red Oak, maple, hickory, or White Oak wood (all non-coniferous woods). The panels measure 4 3/8” in width and range from 12” to 84” in length. The panels are tongued and grooved on edges and ends and are coated with stain and/or polyurethane.
Both “plywood” and “veneered panels” are defined in the Explanatory Notes for heading 4412, Harmonized Tariff Schedule of the United States (HTSUS). 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.” Veneered panels are “panels consisting of a thin veneer of wood affixed to a base, usually of inferior wood, by glueing under pressure.” The definition for “plywood” describes the Inspire panels, while the definition for “veneered panels” describes the Distinct panels. Plywood and veneered panels are specifically provided for in heading 4412 of the HTSUS, and the panels are classified in that heading in accordance with General Rule of Interpretation 1.
The applicable subheading for the Inspire wood flooring panels with a face ply of maple or Red Oak wood 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.
The applicable subheading for the Inspire wood flooring panels with a face ply of birch wood will be 4412.32.0665, 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: With a face ply of birch (Betula spp.): Other: Other: Wood flooring. The rate of duty will be free.
The applicable subheading for the Distinct flooring panels will be 4412.99.5105, HTSUS, which provides for Plywood, veneered panels and similar laminated wood: Other: Other: With at least one outer ply of nonconiferous wood: Other: Other: Wood flooring. The rate of duty will be free.
In your submission, you describe a scenario wherein the unfinished Inspire and Distinct panels are fully manufactured in Canada, by an unrelated manufacturer. Then, PGI purchases the panels, finishes them with stain and polyurethane, and packages them for export to the United States. You indicate that all of the components of the panels, including finishes, are sourced or manufactured in Canada, with the exception of US-sourced hardwoods for the panel face plies. You state that the only non-originating materials are the adhesives used to laminate the panels. These adhesives originate in multiple countries.
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. The adhesive is the only material that is non-originating. Because the adhesive imported into Canada is classifiable under heading 3506, HTSUS, and because the final flooring products are classifiable in heading 4412, 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 manufacturing in Canada results in a change to heading 4412, HTSUS, from multiple other headings, and therefore constitutes a substantial transformation, rendering 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 4412, HTSUS, the manufacturing in a NAFTA country must result in a change to heading 4412 from any other heading. Because the manufacturing in Canada results in changes from multiple headings to 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.
The flooring panels are eligible for preferential, duty-free treatment under NAFTA.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in 19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. In the event that the facts or merchandise are modified in any way, you should bring this to the attention of Customs and you should resubmit for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by Customs.
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