CLA-2-39:S:N:N3D:221 852176
Mr. Earl A. Roberts
Richard L. Jones, Customhouse Brokers, Inc.
475 Railroad Blvd., P.O. Box 472
Calexico, CA 92231-0472
RE: The tariff classification of plastic key tags and stadium
cushions from Mexico.
Dear Mr. Roberts:
In your letter dated April 25, 1990, on behalf of Coventry
Manufacturing Company, Inc., you requested a tariff
classification ruling.
You requested information on two products. The key tag is a
plastic fob which, after importation, will be attached to a key
ring. It comes in various sizes and shapes, including hearts,
ovals, circles, dollar signs, numerals and grips. Each shape has
a hole punched in where it will be fitted with a key ring. The
cushion is rectangular, with rounded edges and a cut out handle.
It measures approximately 16 inches by 9 1/2 inches, with a
thickness of 13/16 inch.
Both are produced using similar processes. Foamed ethyl
vinyl acetate plastic sheets, made in the United States, are
shipped to Mexico. The foamed plastic is die cut to size and
shape. Then, the cut shapes are dipped into a liquid vinyl
coating mixture. The ingredients of the coating mix are also
made in the United States and shipped to Mexico. Each shape is
dipped in the liquid at least 3 times. Between each dipping
process, the shapes are placed in a drying tunnel and heated.
After the vinyl coating is thick enough, each shape is then
dipped into a clear coating which gives it a shiny surface.
The applicable subheading for the key tags and stadium
cushions will be 3926.90.9050, Harmonized Tariff Schedule of the
United States (HTS), which provides for other articles of
plastics, other. The rate of duty will be 5.3 percent ad
valorem.
Articles classifiable under subheading 3926.90.9050, HTS,
which are products of Mexico, are entitled to duty free treatment
under the Generalized System of Preferences (GSP) upon compliance
with all applicable regulations.
You also request a ruling as to whether the foam sheets
undergo a double substantial transformation which would make them
eligible to be considered substantially transformed constituent
materials.
Under the Generalized System of Preferences (GSP), eligible
products of a designated beneficiary country (BDC) which are
imported directly into the United States qualify for duty-free
treatment if the sum of the cost or value of the constituent
materials produced in the BDC plus the direct costs involved in
processing the eligible article in the BDC is at least 35 percent
of the article's appraised value at the time of its entry into
the United States. The cost or value of materials which are
imported into the BDC to be used in the production of the article
may be included in the 35 percent value-content computation only
if the imported materials undergo a double substantial
transformation in the BDC. That is, the material imported into
Mexico from the United States to produce the key tags and stadium
cushions must first be substantially transformed into a new and
different intermediate article of commerce, which is then used in
Mexico in the production of the final imported article.
The test for determining whether a substantial
transformation has occurred is whether an article emerges from a
process with a new name, character or use, different from that
possessed by the article prior to the processing. The die
cutting of the foam shapes constitutes a substantial
transformation of the United States sheeting material. However,
the coating of the foam shapes with plastic liquid is merely a
finishing operation and does not result in a change in name,
character or use. Since the foam shapes do not undergo a second
substantial transformation, the cost or value of the foam sheets
may not be counted for the purposes of satisfying the 35 percent
requirement.
This ruling is being issued under the provisions of Section
177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
Jean F. Maguire
Area Director
New York Seaport