CLA-2-44:OT:RR:NC:2:230
Mr. Ronald D. Forbes
Affiliated Customs Brokers Ltd.
411 Rue des Recollets
Montreal Quebec H2Y 1W3
Canada
RE: The country of origin of engineered plywood flooring
Dear Mr. Forbes:
In your letter dated October 5, 2015, you requested a country of origin ruling. Product information and photographs were submitted for our review.
You outline a scenario wherein engineered plywood flooring panels, made in China, are imported into Canada. You state that the flooring panels from China are of a plywood construction, are tongued and grooved, and are not surface covered. You state further processing takes place in Canada after importation; the panels’ face ply is stained and varnished, and the panels are packaged for retail sale. The panels will then be exported to the United States.
General Note 12(b), Harmonized Tariff Schedule of the United States (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—
(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;
Subdivision (t) states that, in order to be subject to NAFTA, a change to headings 4401 through 4421 from any other heading, including another heading within that group, must take place as a result of the manufacturing. In this case, the Chinese flooring is classifiable under heading 4412, and the flooring after Canadian manufacturing is still classifiable under heading 4412. Because the necessary change did not occur, the product is not eligible for NAFTA preferential treatment.
With regard to country of origin and marking thereof, 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. Pursuant to 19 CFR Section 134.1(b), the country of origin is the country of manufacture, production or growth of any article of foreign origin entering the U.S. Further work or material added to a foreign article in the United States must effect a substantial transformation in order to render the final product a good of the U.S. However, for a good of a NAFTA country, the NAFTA Marking Rules (set forth in 19 CFR Part 102) will determine the country of origin. Because the flooring is manufactured in part in Canada, a NAFTA country, the NAFTA rules govern the current scenario.
Part 102.11, Customs regulations (19 CFR 102.11), provides that:
The following rules shall apply for purposes of determining the country of origin of imported goods other than textile and apparel products covered by § 102.21:
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Part 102.20, Customs Regulations (19 CFR 102.20), states that, for goods of heading 4412 to be of Canadian origin, they must undergo
A change to heading 4412 from any other heading, except from plywood of subheading 4418.71 through 4418.79; or
A change to surface-covered plywood of heading 4412 from any other plywood that is not surface covered or is surface-covered only with a clear or transparent material which does not obscure the grain, texture, or markings of the face ply.
You state that the flooring is stained, varnished, and packaged for retail sale in Canada before exportation to the United States. Additional US Note 1(c) to Chapter 44 of the HTSUS explains that
The term "surface covered," as applied to the articles of headings 4411 and 4412, means that one or more exterior surfaces of a product have been treated with creosote or other wood preservatives, or with fillers, sealers, waxes, oils, stains, varnishes, paints or enamels, or have been overlaid with paper, fabric, plastics, base metal, or other material.
By this definition, the application of stain and varnish to the face of the flooring product qualifies as surface covering. Therefore, the manufacturing in Canada meets the origin rule set forth in 19 CFR 102.20. Canada, therefore, is the country of origin.
You ask in your letter if the flooring is subject to anti-dumping or countervailing orders (AD/CVD) on multilayered wood flooring from China. Please note that the rules of origin for NAFTA and for AD/CVD may be different, and the instant product may fall within the scope of those orders and may be subject to antidumping duties and countervailing duties. Written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection. You can contact them at http://www.trade.gov/ia/ (click on “Contact Us”). For your information, you can view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on “Antidumping and countervailing duty investigations”), and you can search AD/CVD deposit and liquidation messages using the AD/CVD Search tool at http://addcvd.cbp.gov/.
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 Laurel Duvall at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division