CLA-2-39:OT:RR:NC:N4:433
Etienne Giguere, Owner
Service Recreatif Giguere
1527 6 Avenue
Grand-Mere, Quebec G9T 2K2
Canada
RE: The tariff classification of plastic flooring for boats from Canada; North America Free Trade Agreement (NAFTA) eligibility; and proper country of origin.
Dear Mr. Giguere:
In your letter dated November 6, 2014, you requested a tariff classification ruling. Illustrative literature was provided.
Service Recreatif Giguere will import rolls of Polyvinyl-chloride (PVC) planks from the United Kingdom into Canada for use as flooring material for boats. The planks measure 70 feet in length by 4 inches in width. In Canada, the planks will be welded together to form a piece that will then be cut to size and shape according to the pattern chosen by the customer. Intricate border work will be performed to finish the custom floor.
You ask if the finished product, the boat flooring, imported into the United States remains classified in subheading 3918.10 of the Harmonized Tariff Schedule of the United States (HTSUS). Heading 3918, HTSUS, in pertinent part, encompasses floor coverings in rolls or in tiles. Consequently, the boat flooring having been manufactured into shape is not classified in heading 3918, HTSUS, but rather falls to subheading 3926.90.3000, HTSUS, the provision in pertinent part for parts of yachts or pleasure boats of heading 8903.
The applicable subheading for the PVC boat flooring will be 3926.90.3000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other articles of plastics and articles of other materials of headings 3901 to 3914: Parts for yachts or pleasure boats of heading 8903; parts of canoes, racing shells, pneumatic craft and pleasure boats which are not of a type designed to be principally used with motors or sails.” The rate of duty will be 4.2% 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/.
To be eligible for tariff preferences under NAFTA, goods, must be “originating goods” within the rules of origin in General Note 12 (b), HTSUS. In this instance, to be an “originating good” the Ottoman Queen Storage Bed must be transformed in the territory of Canada pursuant to General Note 12 (b) (ii), (A) and (B), which states: (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.
In examining whether or not the boat flooring is transformed in the territory of Canada, the NAFTA tariff shift rule of origin, as provided in General Note 12 (t), Chapter 39, Note 12 to the HTSUS, is applicable. The rule states at: A change to subheading 3926.90 from any other heading, except from appliances for ostomy use of subheading 3006.91. In addition, the regional value content must be not less than (1) 60 percent where the transaction value method is used, or (2) 50 percent where the net cost method is used.
At this time we are unable to provide a NAFTA eligibility determination, in that insufficient information was provided to ascertain whether the regional value content should be calculated using transaction value or net cost. We do not know: (1) the nature of the parties involved, whether they are related or non-related, and if related whether arms-length transactions assimilating non-related parties is undertaken, (2) whether the value of the foreign inputs, the rolled PVC planks, include the cost of freight, insurance and packing and all other costs incurred in transporting the material to the location of the producer, (3) whether duties and taxes paid or payable with respect to the materials in the territory of one or more of the NAFTA countries, is included in the cost of the foreign inputs, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, including credit against duty or taxes paid or payable, are included in the value of the foreign inputs (4) whether customs brokerage fees are include in the cost of the foreign inputs, and (5) whether costs for waste and spoilage resulting from the use of the material in the production of the good is included in the value of the foreign inputs. For the net cost calculation see 19 Customs Code of Federal Regulations, Part 181 – NAFTA and its Appendix to Part 181, which discusses originating materials, non-originating materials, product costs, period costs and other costs, as well as discusses other inclusions and exclusions to the net cost calculation.
Part 134, Customs Federal Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. In Section 134.1 (b), the country of origin of an article is defined 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 for country of origin marking purposes. 19 CFR 134.1 (b) is not applicable for NAFTA goods, as country of origin will be determined in accordance with 19 CFR 102 – Rules of Origin.
19 CFR, Section 102.20, “specific rule by tariff classification,” states: for 3922-3926 – A change to heading 3922 through 3926 from any other subheading, including another heading within that group, except for a change to heading 3926 from articles of apparel and clothing accessories, other articles of plastics, or articles of other materials of headings 3901 to 3914 of heading 9619. As the PVC planks of UK origin are classified in heading 3918, HTSUS, not within any subheading or heading of 3922 through 3926, the boat flooring meets the specific rule by tariff classification as provided above. Accordingly, the PVC boat flooring is country of origin Canada.
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 Neil H. Levy at E-mail address: [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division