CLA-2-38:OT:RR:NC:2:235
Ms. April J. Collier
Pacific Customs Brokers Inc.
P.O. Box 4505,
Blaine, WA 98231-4505
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Catalyst Masterbatch Compounds from Canada; Article 509
Dear Ms. Collier:
In your letter dated March 14, 2012, you requested a ruling on the status of three plastic masterbatch compounds for accelerating the curing of cross-linkable polyethylene from Canada under the NAFTA.
The three products under consideration are TA 2410 CL, TA 2411 CL and TA2412 CL, also known as Red Catalyst Masterbatch, Blue Catalyst Masterbatch, and White Catalyst Masterbatch, respectively. You indicate that all three products are “alike in all properties except color”. The specific pigment added will be responsible for the coloration of the finished tubing. You indicate that instant products are added to a silane grafted ethylene copolymer known as a graft after importation. The instant products are stated to “impart several desired properties to the finished cross-linked polyethylene products”. In your letter, you indicate that the components of these products “primarily greatly accelerate the chemical reaction process”. You indicate that they “secondarily impart oxidative, thermal and light stability to the finished product”. It is suggested in your letter that the products’ color development capacity is a tertiary or minor aspect. In your request letter, you suggest that the products should be classified under Subheading 3824 which provides in part for: chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included. We disagree with your suggested classification. Heading 3824 in the pertinent part provides for chemical products including mixtures of the type under consideration that are “not elsewhere specified or included”. The list of components present in the three products include a base polymer, together with a colorant, antioxidants, a light stabilizer, a UV absorber, a curing accelerator (catalyst) and a process aid. You indicate that you do not believe that the curing accelerator is a catalyst. However, our research indicates that the Dioctyltin Dilaurate does function as a catalyst in the instant product. In addition, the products are marketed and sold as “Catalyst Masterbatch” on the manufacturer’s website. Your ruling request letter, as previously stated, indicates that the “primary function” of the three products is as a catalyst. In addition, both the product names, literature and product website focus on the catalytic nature of the preparations.
The applicable tariff provision for the TA 2410 CL, TA 2411 CL and TA2412 CL Masterbatch compounds will be 3815.90.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Reaction initiators, reaction accelerators and catalytic preparations, not elsewhere specified or included: Other: Other. The general rate of duty will be 5 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 World Wide Web at http://www.usitc.gov/tata/hts/.
You also requested a determination on the instant products regarding their eligibility under the NAFTA. 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--
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(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; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the non-originating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
The tariff shift rule for subheading 3815.90.5000, set forth in GN 12(t), HTSUS, is as follows:
A change to subheadings 3815.11 through 3815.90 from any other subheading, including another subheading within that group.
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12 (b) (ii) (t). The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
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. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.
Section 134.1(b) of the regulations, defines "country of origin" 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 country, the NAFTA Marking Rules will determine the country of origin.”
Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the “Catalyst Master Batches” are goods of Canada for marking purposes.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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 Paul Hodgkiss at (646) 733-3046.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division