CLA-2-44:OT:RR:NC:N3:230
Mr. Joseph Cozza
Tuvia USA, Inc.
303 Merrick Road
Lynbrook, NY 11563
RE: The tariff classification and marking of pallet blocks from Germany and The Netherlands
Dear Mr. Cozza:
In your letter, dated September 12, 2016, you requested a tariff classification and country of origin marking ruling on behalf of your client, Pallet Machinery Group, Inc. The ruling was requested on pallet blocks. Photos and product information were submitted for our review.
In your letter, you describe the pallet blocks as being constructed of wood particles and, apparently, resin, that are subjected to heat and high pressure to form a homogeneous wood structure. The blocks are rectangular, may have mitered corners, or are shaped to various rounded profiles, and some appear to be drilled or extruded with a central hole. The blocks are not surface coated or covered in any way. The blocks vary in measurement, but generally range from 70mm to 145mm in length and width and 70mm to 100mm in height. The pallet blocks are used in the United States to manufacture wood pallets. The blocks form the separation between the top and bottom deck boards of the pallet.
In your letter, you suggest classification of the pallet blocks in either subheading 4401.39.4090 or 4410.90.0000, Harmonized Tariff Schedule of the United States (HTSUS). Heading 4401 provides for Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chips or particles; sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes,
pellets or similar forms. The instant product, though originating from “wood scraps, bark, and other recycled wood chips including sawdust,” is not agglomerated wood waste or scrap, but a highly manufactured product. The structure of Chapter 44, HTSUS, follows a format of least manufactured products in the beginning of the chapter, to most manufactured at the end. As particle board is considerably more manufactured than agglomerated wood waste, it is precluded from heading 4401. We therefore consider heading 4410, HTSUS, which provides specifically for particle board.
The Explanatory Notes to the Harmonized System for Chapter 44 define particle board as
a flat product manufactured in various lengths, widths and thicknesses by pressing or extrusion. It is usually made from wood chips or particles obtained by the mechanical reduction of roundwood or wood residues. It may also be produced from other ligneous materials such as fragments obtained from bagasse, bamboo, cereal straw or from flax or hemp shives. Particle board is normally agglomerated by means of an added organic binder, usually a thermosetting resin, which generally does not exceed 15 % of the weight of the board.
Note that this description includes particles obtained by the mechanical reduction of wood residues or fragments. This description describes the instant product. The rectangular blocks are clearly classifiable within this heading.
As for the shaped or drilled blocks, Note 4 to Chapter 44, HTSUS, provides that “Products of heading 4410, 4411 or 4412 may be worked to form the shapes provided for in respect of the articles of heading 4409, …or submitted to any other operation provided it does not give them the character of articles of other headings.” The continuous shaping (or profiling) of wood shapes does not preclude classification in heading 4410, nor does the center hole. This shaping does not give the blocks the character of articles of another heading.
The applicable subheading for the pallet blocks will be 4410.11.0060, HTSUS, which provides for Particle board, oriented strand board (OSB) and similar board (for example, waferboard) of wood or other ligneous materials, whether or not agglomerated with resins or other organic
binding substances: Of wood: Particle board: Other. The rate of duty will be free.
In your letter, you request a country of origin marking ruling. You do not indicate any information regarding manufacture of the pallet blocks except to state that they are of German or Netherlands origin. 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. If the pallet blocks are fully manufactured in Germany, they are to be marked “Made in Germany (or Netherlands)” or “Product of Germany (or Netherlands)”. 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 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. Section 134.1(d) defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. Section 134.(d)(1) states that
If an imported article will be used in manufacture, the manufacturer may be the “ultimate purchaser” if he subjects the imported article to a process which results in a substantial transformation of the article, even though the process may not result in a new or different article…
You state that the pallet blocks are being manufactured into wooden pallets after importation into the United States. Since the pallet blocks are classifiable in heading 4410, HTSUS, and complete pallets are classifiable in heading 4415, HTSUS, we find this manufacturing to constitute a substantial transformation. Therefore, the manufacturer in the United States is the ultimate purchaser. The outermost container in which the pallet blocks reach the ultimate purchaser is required to be marked to indicate the origin of its contents.
In your letter, you also request whether a Lacey Act declaration will be required with entry. The Lacey Act (16 U.S.C. 3371) (”Act”) was amended by the Food, Conservation, and Energy Act of 2008. The amendments to the Act introduced, among other things, the requirement for an import declaration for plants and plant products entering the United States. A list of products and the associated Chapter or Heading of the Harmonized Tariff Schedule of the United States, which require a Plant Product Declaration Form (PPQ 505), was part of the notice published in the Federal Register by the U.S. Department of Agriculture, Animal and Plant Health Inspection Service (74 Fed. Reg. 5911). Products of Chapter 44, HTSUS, are listed in the subject Federal Register Notice. You are advised, in regard to obtaining specific information, to contact the aforementioned agency at the following location:
U.S. Department of Agriculture
APHIS
4700 River Road
Riverdale, MD 20737-1236
Telephone number: 877-770-5990
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 https://hts.usitc.gov/current.
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,
Steven A. Mack
Director
National Commodity Specialist Division