CLA-2-63:OT:RR:NC:N3:351
Mr. Garry Borrowman
Lloyd Bag Co.
114 St. Clair Street
Chatham, Ontario N7M 5K3
Canada
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of a meat packaging bag from Canada; Article 509
Dear Borrowman:
In your letter dated July 24, 2012, you requested a ruling on the status of a meat packaging bag to be imported from Canada under the NAFTA. We had to return your request for more information and a sample. In an undated response, received in our office on Aug. 9, 2012, you provided that information and the sample. In addition, more information was provided in a telephone conversation on Aug. 16. The ruling request was filed on behalf of your client Lloyd Bag Co. of Chatham, Ontario.
The item in question is a bag that will be used to package processed meat products such as salamis or hams. It is made of 100% cotton woven fabric and measures approximately 20” long by 6” wide in its flattened state. It is constructed by folding over the fabric and sewing the joined edges around the rounded bottom with an overlock stitch. The top remains opened to slide in the meat product. At the top is a 2-1/2”-long fabric tab. After the bag is filled, the top can be gathered and closed with a twist-tie, as shown in the picture you supplied; the loop would then allow the package to be hung for display or storage. The bag will be sold by Lloyd Bag to Tyson for their division Schneiders; the Schneiders name and logo is printed on the fabric.
The applicable tariff provision for the meat packaging bag will be 6305.20.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for sacks and bags, of a kind used for the packing of goods: Of cotton. The duty rate will be 6.2 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 state that the cotton fibers are from Thailand, the cotton yarns are made in China, and the cotton fabric is manufactured in China. The fabric is cut and sewn into the finished bag in Canada.
General Note (GN) 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. GN 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 nonoriginating 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 meat packaging bag does not qualify for preferential treatment under the NAFTA because none of the above requirements are met. Specifically, GN 12(t)/64, at (4), requires the following tariff shift:
A change to headings 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties [emphasis added].
The cotton fabric of Chinese origin from which the bag is made is classified in heading 5208 so the bag does not meet the terms of the tariff shift.
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 Mitchel Bayer at (646) 733-3102.
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