CLA-2-96:OT:RR:NC:N4:414
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Mr. Alex Romero
A.F. Romero Co.
U.S. Customs Brokers
1749 Stergios Road
Calexico, CA 92231
RE: The eligibility for duty free treatment under the Generalized System of Preferences for ball point pens, felt tipped markers, ball point pen refills and erasers from India
Dear Mr. Romero:
In your letter dated February 16, 2016 you requested a ruling on behalf of Sanford LP, a division of Newell Rubbermaid Inc., on whether ball point pens, felt tipped markers, refills for ball point pens and erasers qualify for the Generalized System of Preferences (GSP) under certain proposed scenarios for importation. Samples were not furnished with your request for a ruling.
Sanford LP purchases ball point pens, felt tipped markers, refills for ball point pens and erasers from vendors in India. You state that currently Sanford LP imports the ball point pens under subheading 9608.10.0000, Harmonized Tariff Schedules of the United States (HTSUS), the felt tipped markers under subheading 9608.20.0000, HTSUS, the refills for ball point pens under subheading 9608.60.0000, HTSUS, and the erasers under subheading 3926.10.0000, HTSUS. These items ae imported directly from India into the United States. You state that Sanford currently qualifies for duty free treatment under the GSP for these importations. Based on your letter, we will assume that the ball point pens, felt tipped markers, ball point pen refills and erasers are products of India and that the 35 percent value content requirement is satisfied.
In the future, Sanford plans to import bulk shipments of ball point pens, felt tipped markers, refills for the ball point pens, and erasers to Mexico from India. In Mexico, the bulk shipments of these items will be packaged in retail packaging. The retail packages would mainly include multiples of the same kind of product, e.g., ball point pens or felt tipped markers manufactured in India. However, some retail packages may contain items from different countries such as India and Korea.
In the first scenario, Sanford LP proposes to ship bulk shipments of the ball point pens, felt tipped markers, ball point refills and erasers from India to Mexico and entered into Mexico under the in bond program. The items would be packaged in retail packages in Mexico and shipped to the United States for consumption entry or for entry into a Foreign Trade Zone.
In the second scenario, Sanford LP proposes to ship bulk shipments of the ball point pens, felt tipped markers, ball point refills and erasers into the United States and then ship them through the United States to Mexico in bond. In Mexico, they would be packaged into retail packages and then shipped to the United States for consumption entry or for entry into a Foreign Trade Zone.
You also ask if entry under the GSP is allowed under either the first or second scenario, would it be limited to retail packages that contain only pens, markers, refills and erasers from India, or if items from other, non-beneficiary developing countries can be packaged with the items from India and the goods claimed under the GSP.
You believe that the ball point pens, felt tipped markers, ball point pen refills and erasers meet the direct shipment requirements of the GSP program as it is defined in 19 CFR 10.175.
Under 19 CFR 10.175 (a) the goods must be shipped directly from the beneficiary developing country to the United States without passing thorough the territory or any other country. Sanford’s proposed scenarios indicate that the goods will not be shipped directly to the United States from the beneficiary developing country.
Under 19 CFR 10.175 (b) if the shipment is from a beneficiary developing country to the United States through the territory of any other country, the merchandise in the shipment must not enter into the commerce of any other country while en route to the U. S. and the invoice, bills of lading and other shipping documents show the U.S. as the final destination. The bulk ball point pens, felt tipped markers, ball point pen refills and erasers are received in Mexico in bulk shipments for packaging in retail packaging. This is not a direct shipment to the United States.
You state that Customs has held that packaging is not an advancement in value or an improvement in the condition of goods. However, this determination was made in relation to subheading 9801.00.10, HTSUS. Subheading 9801.00.10, HTSUS, provides for products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. The bulk shipments of the goods in question are from India, they are subject to retail packaging in Mexico, and do not contain any U.S. components. The decisions regarding subheading 9801.00.10, HTSUS, do not apply to these scenarios proposed by Sanford LP, which relate to the GSP.
Under 19 CFR 10.175 (c) if the shipment is from a beneficiary developing country to the United States through a free trade zone in the beneficiary developing country, the merchandise shall not enter not the commerce of the commerce of the country maintaining the free trade zone. The ball point pens, felt tipped markers, ball point refills and erasers are not shipped through a free trade zone, accordingly, this is not applicable.
Under 19 CFR 10.175 (d) if the shipment is from any beneficiary developing country to the United States through the territory of any other country and the invoice and other documents do not show the U.S. as the final destination, the shipment must meet certain requirements. 10 CFR 10.175 (d) is not applicable to the scenarios presented.
Under the first scenario, the goods are entered into Mexico in bond for packaging in retail packaging and then shipped to the United States. The ball point pens, the felt tipped markers, the ball point pen refills and the erasers will not be eligible for duty free treatment because the goods do not satisfy the “imported directly” requirement set forth under the GSP.
Under the second scenario, the goods are shipped to the United States and then shipped to Mexico in bond for packaging in retail packaging, then shipped to the U.S. The ball point pens, felt tipped markers, ball point pen refills and erasers will not be eligible for duty free treatment because the goods do not satisfy the “imported directly” requirement set forth under the GSP.
The ball point pens, felt tipped markers, ball point pen refills and erasers from India, when retail packaged with ball point pens, felt tipped markers, ball point pen refills and erasers from non-GSP countries such as Korea, will not be eligible for duty free treatment under GSP when entered into the United States after packaging in retail packaging in Mexico. In order to be eligible for the GSP, the entire importation must be a “product of” a beneficiary developing country. In the situation you outline, the entire importation is not a “product of” India.
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 Barbara Kiefer at [email protected].
Sincerely,
Deborah C. Marinucci
Acting Director
National Commodity Specialist Division