CLA-2-63:RR:E:NC:N3:351
Allan Androkovich
305431 Alberta Limited
o/a JPA Industries
RR8 Site 26 Box 11
Lethbridge, Alberta
Canada T1J 4P4
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of used flexible intermediate bulk containers, scrap twine, and shredded pieces of both, from Canada; Article 509
Dear Mr. Androkovich:
In your letters dated March 30 and May 21, 2010, you requested a tariff classification ruling.
With your second letter you submitted samples of the scrap baler and binder twine in pieces and in a shredded state, as well as cut-up pieces of fabric from the flexible intermediate bulk containers (FIBCs) and that fabric in a shredded state. You state that your company manually cleans the scrap twine and used FIBCs of mud and dirt, although very small amounts of hay or straw may remain. Some of the scrap twine and used FIBCs are baled after cleaning, 23-30 FIBCs or 1000 pounds of twine per bale. You stated that the FIBCs are no longer usable and are fit only for the recovery of the raw materials. All of the baled waste is exported in an “as is” condition to the United States where it is shredded by your customers. Your company also shreds some of the scrap twine and used FIBCs, then washes and bags the shredded pieces for export to the United States.
The shredded pieces are remelted and then used in the manufacturing of new twine or FIBCs, or other items.
While the country of origin of the scrap twine and used FIBCs cannot be determined when your company purchases them in the scrap condition, in a telephone conversation with this office you stated that your company buys the scrap twine and used FIBCs from farms, feedlots, and hay plants across Canada. Therefore, it is presumed that the items were used in Canada and the country of origin is Canada.
The applicable subheading for the scrap twine and the shredded twine and fabric will be 6310.10.2020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for used or new rags, scrap twine, cordage, rope and cables, and worn out articles of twine, cordage, rope or cables, of textile materials. The general rate of duty will be Free.
On the telephone, you asked about eligibility of the used FIBC under the North American Free Trade Agreement (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--
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States;
Further on, section (n)(ix)(B) of General Note 12 provides originating status for waste and scrap derived from—
used goods collected in the territory of one or more of the NAFTA parties, provided such goods are fit only for the recovery of raw materials . . . .
You have stated that the used FIBCs are used only for the recovery of raw materials, but, as we stated earlier, you have submitted no evidence of this. If, in fact, the FIBCs cannot be repaired and reused, they would be considered waste and scrap collected in Canada from used goods fit only for the recovery of raw materials. Under those circumstances, they would be considered to be wholly obtained or produced entirely in the territory of Canada, in accord with General Note 12(n)(ix)(B) and they would be eligible for duty-free treatment under NAFTA.
However, if the used FIBCs are not beyond use as originally intended, that is, to transport dry, flowable items such as grains the applicable subheading for the FIBCs will be 6305.32.00, HTSUS, which provides for sacks and bags, of a kind used for the packing of goods: Of man-made textile materials: Flexible intermediate bulk containers. The general rate of duty will be 8.4% 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 World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 181.100(a)(2), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted.
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 Mitchel Bayer at (646) 733-3102.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division