Ms. Eileen Family
5101 South Broad Street
Philadelphia, PA 19112
RE: The tariff classification and country of origin of shaped plywood panels
Dear Ms. Family:
In your letter, dated October 6, 2022, you requested binding tariff classification and country of origin rulings on behalf of your client, MAMMC Solutions. The rulings were requested for shaped plywood panels to be used for drawer sides. Product information and photos were provided for our review.
The request concerns birch plywood panels that have been continuously shaped along their face and worked with one of two finished edge variations. The panels consist of multiple (based on photos, there appear to be 9 or 11) birch wood veneers, none exceeding 6mm in thickness, that have been laminated together with the grain of each veneer oriented at an angle to those of the adjacent veneers. The plywood panels measure 60" long by 2.75" to 12" wide by 12mm thick at time of entry. There are two styles of panel; both panels have one straight-cut long edge and one finished long edge. Each panel is shaped with a square groove that runs the length of the panel face, close to the straight-cut edge. The opposite edge of the panel is either cut to a rounded profile ("bullnosed") or is straight and edge-banded. The panels are coated with a clear, UV-cured coating. The panels will be cut to length after importation and further worked to be used as drawer sides.
The Explanatory Notes to the Harmonized System (ENs) for heading 4412 define plywood as being panels "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." This definition describes the instant panels. This definition also describes the plywood material from which the panels are made.
Plywood is specifically provided for in heading 4412, Harmonized Tariff Schedule of the United States (HTSUS).
Note 4 to Chapter 44, HTSUS, states:
Products of heading 4410, 4411 or 4412 may be worked to form the shapes provided for in respect of the articles of heading 4409, curved, corrugated, perforated, cut or formed to shapes other than square or rectangular or submitted to any other operation provided it does not give them the character of articles of other headings.
This note indicates that goods classified in heading 4412 can be continuously shaped (i.e., worked as provided for in heading 4409) and remain classifiable in heading 4412. Therefore, the grooving and bullnose shaping do not preclude classification in heading 4412. Edgebanding, however, is not an operation provided for in heading 4412. The addition of an edge band yields a product that is dedicated for use as a drawer component; the presence of the edge band precludes classification in heading 4412.
Additional US Note 1(c) to Chapter 44, HTSUS, also provides that coating or covering the surface of a good of heading 4412 does not preclude classification in heading 4412:
The term "surface covered," as applied to the articles of headings 4411 and 4412, means that one or more exterior surfaces of a product have been treated with creosote or other wood preservatives, or with fillers, sealers, waxes, oils, stains, varnishes, paints or enamels, or have been overlaid with paper, fabric, plastics, base metal, or other material.
The clear UV coating applied to the panels constitutes a "surface covering". Therefore, this coating does not preclude classification in heading 4412.
In your letter, you describe a scenario wherein birch plywood is manufactured and coated in Latvia, Poland, Russia, or Kazakhstan. The plywood will then be shipped to Mexico, where it will be cut to length and width, grooved, and bullnosed and/or edge-banded.
The marking statute, 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.
The "country of origin" is defined in 19 CFR 134.1(b) as
...the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin.
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico.
Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. 102.21. See 19 C.F.R. 102.11.
19 CFR Part 102.11(a) provides that the country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
The shaped plywood panels are neither "wholly obtained or produced" nor "produced exclusively from domestic materials." Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of the plywood panels and paragraph (a)(3) must be applied next to determine the origin of the finished article.
Section 102.20 (19 CFR 102.20) sets forth the applicable tariff change rules that address the current scenario. The plywood panels with the groove and bullnose shaping are classifiable in heading 4412. Goods classified in heading 4412 must undergo a change as follows: "A change to heading 4412 from any other heading, except from plywood of subheading 4418.71 through 4418.79." The plywood entering Mexico from Latvia, Poland, Russia, or Kazakhstan is classifiable in heading 4412. After manufacturing, the panels are still classifiable in heading 4412. Therefore, the tariff shift rule has not been met.
Since an analysis of section 102.11(a) has not produced a country of origin determination, we turn to section 102.11(b) of the regulations.
Section 102.11(b) states, in relevant part:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good....
In determining the "essential character" of the finished good, Section 102.18(b)(1) provides, in relevant part:
(b)(1) For purposes of identifying the material that imparts the essential character to a good under 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the 102.20 specific rule or other requirements applicable to the good. For purposes of this paragraph (b)(1):
(ii) Materials that may be considered include materials produced by the producer of the good and incorporated in the good. For example, if a producer of a good purchases raw materials and converts those raw materials into a component that is incorporated in the good, that component is a material that may be considered for purposes of identifying the materials that impart the essential character to the good, provided that the component is classified in a tariff provision from which a change in tariff classification is not allowed under the specific rule...
The only material that does not undergo the applicable tariff shift in 19 C.F.R. 102.20(d) is the plywood panels from Latvia, Poland, Russia, or Kazakhstan. Therefore, for the grooved/bullnosed panels, the country of origin will be Latvia, Poland, Russia, or Kazakhstan, depending on where the plywood panels used in making the grooved/bullnosed panels were produced. The grooved/bullnosed panels should marked accordingly with their country of origin in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit.
The plywood panels with the groove and edgebanding are precluded from classification in heading 4412 due to the edgebanding. These panels are classifiable in heading 4421 as other articles of wood. Goods classified in heading 4421 must undergo a change as follows: "A change to any other good of heading 4413 through 4421 from any other heading, including another heading within that group." Because the plywood entering Mexico from Latvia, Poland, Russia, or Kazakhstan is classifiable in heading 4412, and the panels after manufacturing are classifiable in heading 4421, this tariff shift rule has been met as result of the processing performed in Mexico. Therefore, for the panels with the groove and edgebanding, the country of origin will be Mexico.
The applicable subheading for the plywood panel finished with a groove along its face and a bullnose edge will be 4412.33.0670, 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 of the species alder (Alnus spp.), ash (Fraxinus spp.), beech (Fagus spp.), birch (Betula spp.), cherry (Prunus spp.), chestnut (Castanea spp.), elm (Ulmus spp.), eucalyptus (Eucalyptus spp.), hickory (Carya spp.), horse chestnut (Aesculus spp.), lime (Tilia spp.), maple (Acer spp.), oak (Quercus spp.), plane tree (Platanus spp.), poplar and aspen (Populus spp.), robinia (Robinia spp.), tulipwood (Liriodendron spp.) or walnut (Juglans spp.): 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: Other.
The rate of duty for the grooved/bullnosed panels that are made from Russian birch plywood will be 50 percent ad valorem. The rate of duty for the grooved/bullnosed panels made from plywood produced in Latvia, Poland, or Kazakhstan will be free.
The applicable subheading for the plywood panel worked with a groove along its face and edgebanding will be 4421.99.9880, HTSUS, which provides for Other articles of wood: Other: Other: Other: Other: Other. The rate of duty will be 3.3 percent ad valorem, regardless of the origin of the plywood material.
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]
Steven A. Mack
National Commodity Specialist Division