CLA-2-63:OT:RR:NC:N3:351
Mr. Myron Barlow
Barlow & Co. LLC
550-M Ritchie Highway, Suite 114
Severna Park, MD 21146
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of woven polypropylene/biaxially-oriented polypropylene bulk bags from Honduras
Dear Mr. Barlow:
In your original letter dated May 27, 2020, and your follow up letter, dated June 16, 2020, you requested a ruling written on behalf of Anduro Manufacturing, on the tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) for two products. Samples of both products were provided to this office.
Product 1 is described as a bag constructed of woven polypropylene (WPP) laminated with biaxially oriented polypropylene (BOPP) on the exterior surface. The WPP consists of a 10 x 10 warp and weft density, consisting of 2.5 mm wide strips of white polypropylene. The bags are used for packaging products including animal feed, animal products such as cat litter, home and garden products, charcoal, and other items. One end of the bag is sewn or heat sealed, depending upon the customer’s requirements. The weight of each finished bag is approximately 100 grams.
Product 2 is constructed in the same manner as Product 1 but also has a coating of polypropylene on the interior surface of the bag. One end of the bag is sewn or heat sealed, depending upon the customer’s requirements. The weight of each finished bag is approximately 118 grams.
The manufacturing steps are as follows:
United States, India or El Salvador
BOPP film is formed.
Colombia
WPP is woven into rolls. (Heading 5407)
WPP is coated with 15-16 grams of clear polypropylene resin. (Product 2, only)
WPP rolls are exported to Honduras.
Honduras
BOPP film is printed with three or more colors.
WPP rolls are laminated with BOPP film.
The bag is formed from the laminated rolls by forming a tube and heat sealing or sewing one end.
The bag is shipped to the United States.
ISSUES:
What are the tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of the subject merchandise? CLASSIFICATION:
You propose the classification of Product 1 is subheading 4602.90 of the Harmonized Tariff Schedule of the United States (HTSUS). However, the bags are described as being constructed of 2.5 mm wide strips of plastic, which do not qualify as a plaiting material.
Subnote (ii) to Chapter 46 of the Harmonized Commodity Description and Coding System, Explanatory Notes, the official interpretation of the nomenclature at the international level, states that the following is not considered plaiting materials of Chapter 46:
Monofilament of which no cross-sectional dimension exceeds 1 mm, or strip or flattened tubes (including strip and flattened tubes folded along the length), whether or not compressed or twisted (artificial straw and the like), of man-made textile materials, provided that the apparent width (i.e., in the folded, flattened, compressed or twisted state) does not exceed 5 mm (Section XI).
Note 1(g) to Section XI, provides that Section XI does not cover the following: Monofilament of which any cross-sectional dimension exceeds 1 mm or strip or the like (for example, artificial straw) of an apparent width exceeding 5 mm, of plastics (chapter 39), or plaits or fabrics or other basketware or wickerwork of such monofilament or strip (chapter 46).
Note 1 to Chapter 46, HTSUSA, provides the following:
In this chapter the expression "plaiting materials" means materials in a state or form suitable
for plaiting, interlacing or similar processes; it includes ... monofilament and strip and the
like of plastics ... but not ... monofilament and strip and the like of chapter 54. Thus, in order for the merchandise at issue to be classifiable in Heading 4602, it must be made of strip exceeding 5 millimeters in width. Since the polypropylene strips do not exceed 5mm in width this construction is considered to be a textile fabric for tariff purposes.
The applicable subheading for Product 1 will be 6305.33.0040, HTSUS, which provides for “Sacks and bags of a kind used for the packing of goods: Of man-made textile materials: Other, of polyethylene or polypropylene strip or the like, Other: Weighing less than 1 kg, with an outer laminated ply of plastics sheeting: Printed with three or more colors.” The rate of duty will be 8.4 percent ad valorem.
You propose classification of Product 2 is subheading 3923.90.000 of the HTSUS; however, these plastic bags are provided for under 3923.29.0000, HTSUS. Therefore, they are precluded from classification in a non-specific provision such as subheading 3923.90. The applicable subheading for Product 2 will be 3923.29.0000, HTSUS, which provides for “Articles for the conveyance or packing of goods, of plastics, stoppers, lids, caps and other closures, of plastics; sacks and bags (including cones) of other plastics.” The rate of duty will be 3 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 the World Wide Web at
https://hts.usitc.gov/current.
DR-CAFTA - LAW AND ANALYSIS:
General Note 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if—
the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement;
(ii) the good was produced entirely in the territory of one or more of the parties to the Agreement, and—
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
(B) the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note;
and the good satisfies all other applicable requirements of this note; or
(iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials.
As the goods contain non-originating materials, the bags must undergo an applicable change in tariff classification in order to meet the requirements of GN 29(b)(ii)(A).
The specific rule for GN 29(n), Chapter 63, rule 4 states, A change to headings 6304 through 6308 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516, 5801 through 5802, or 6001 through 6006, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement.
When exported from Colombia the WPP fabric for Product 1 is classifiable under heading 5407, HTSUS. Based on the facts provided, Product 1 does not meet the terms of the tariff shift rule. As the requirements of General Note 29(b)(ii)(A), HTSUS, are not met, Product 1 is not entitled to preferential treatment under DR-CAFTA.
The specific rule for GN 29(n), Chapter 39, rule 6 states,
A change to headings 3922 through 3926 from any other heading.
When exported from Colombia the WPP fabric for Product 2 is a coated fabric of textile classifiable under Section XI, HTSUS. Based on the facts provided, Product 2 does meet the terms of the tariff shift rule. As the requirements of General Note 29(b)(ii)(A), HTSUS, are met, Product 2 is entitled to a free rate of duty under the DR-CAFTA upon compliance with all applicable laws, regulations, and agreements.
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 Kristine Dodge via email at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division