CLA-2-74:OT:RR:NC:N1:116
Mr. Joseph F. Walter
Livingston International Professional Services, LLC
670 Young Street
Tonawanda, New York 14150
RE: The country of origin and status under the United States-Mexico-Canada Trade Agreement (USMCA) of copper alloy strip
Dear Mr. Walter:
In your letter dated December 24, 2020, on behalf of your client, Cooper Plating Inc., you requested a country of origin ruling and a determination on the eligibility of duty free treatment for copper alloy strip under the United States-Mexico-Canada (USMCA) Trade Agreement. Representative samples were included with your submission and will be returned to you as requested.
The product under consideration is copper alloy strip that will be used to manufacture automotive electrical connectors. According to your submission, copper alloy strip manufactured in China is imported into Canada where it will be subjected to additional processing. The strip has a thickness exceeding 0.15 mm and is imported in coil form. Your request addresses five processing scenarios that take place in Canada.
In the first scenario, copper alloy strip is manufactured from copper scrap of Canadian origin. It is then sent to China where it is melted and processed into 400 mm wide copper strip. You indicate that the copper strip in coil form is shipped from China back to Canada where it is unwound from the master coil and slit into widths typically ranging from ½ inch (12.7 mm) to 2½ inches (63.5 mm) depending on customer specifications. Following slitting, the strip is either rewound into several individual coils or a single transverse wound coil.
In the second scenario, copper alloy strip is produced in China from copper sourced in China. The strip is shipped to Canada where it is unwound from the coil, passed through a chemical bath to clean the surface and then electroplated with tin. Next, the tinplated copper strip is slit to widths typically ranging from ½ inch (12.7 mm) to 2½ inches (63.5 mm) depending on customer specifications and then rewound into coils.
In the third scenario, copper alloy strip is manufactured in China from copper of Chinese origin. The strip is shipped to Canada where it is unwound from the coil, passed through a chemical bath to clean the surface and then electroplated with copper and tin. Next, the plated copper strip is slit to widths typically ranging from ½ inch (12.7 mm) to 2½ inches (63.5 mm) depending on customer specifications and then rewound into coils.
In the fourth scenario, copper alloy strip is produced in China from copper sourced in China. The strip is shipped to Canada where it is unwound from the coil, passed through a chemical bath to clean the surface, electroplated with nickel and tin and then heat-treated creating intermetallic layers. Next, the plated and heat-treated copper strip is slit to widths typically ranging from ½ inch (12.7 mm) to 2½ inches (63.5 mm) depending on customer specifications and then rewound into coils.
In the fifth scenario, copper alloy strip is manufactured in China from copper of Chinese origin. The strip is shipped to Canada where it is unwound from the coil, passed through a chemical bath to clean the surface, electroplated with nickel, copper and tin and then heat-treated creating intermetallic layers. Next, the plated and heat-treated copper strip is slit to widths typically ranging from ½ inch (12.7 mm) to 2½ inches (63.5 mm) depending on customer specifications and then rewound into coils.
Based on the information provided, the copper alloy strip, when imported into Canada, is properly classified in heading 7409, Harmonized Tariff Schedule of the United States (HTSUS), which provides for copper plates, sheets and strip, of a thickness exceeding 0.15 mm: of copper alloys. When imported into the U.S., all five products remain classified in this heading.
USMCA
You inquire whether the strip is eligible for preferential treatment under the USMCA. The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11, HTSUS, implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA.
GN 11(b) states, in relevant part:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country … is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
(i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
(iii) the good is a good produced entirely in the territory of one or more USMCA countries using non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); ….
Since the strip contains non-originating material, it is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and (ii). We must next determine whether the strip qualifies under GN 11(b)(iii). The imported strip is classified in heading 7409, HTSUS. The applicable rule of origin for merchandise under heading 7409, HTSUS, is in GN 11(o), HTSUS, which provides, in relevant part:
Chapter 74 (7) “A change to heading 7409 from any other heading”. The copper strip is manufactured in China. Additional work (i.e., slitting, electroplating, etc.) is performed to the strip in Canada prior to importation to the U.S. However, the classification of the copper strip remains in heading 7409, HTSUS. Since none of the requirements under GN 11(b) are met, the copper strip is not eligible for USMCA preferential tariff treatment.
Country of Origin
In addition to USMCA eligibility, you are requesting a country of origin determination for the subject strip. To allow for a more seamless transition period, at this time, CBP continues to utilize the marking rules set forth in 19 C.F.R. Part 102, with the exception of 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11. Applied in sequential order, the required hierarchy establishes that the country of origin of a good is the country in which:
(a)(1) The good is wholly obtained or produced;
(a)(2) The good is produced exclusively from domestic materials; or
(a)(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.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the imported copper strip is neither wholly obtained or produced or produced exclusively from “domestic” materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). Pursuant to 19 C.F.R. §102.11(a)(3), the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 C.F.R. §102.20, and satisfies any other applicable requirements of that section. In this case, because the copper alloy strip imported into the U.S. from Canada is classified under heading 7409, HTSUS, the change in tariff classification must be made in accordance with section 102.20(n), Section XV: Chapters 72 through 83, heading 7409, HTSUS, which requires “A change to heading 7409 from any other heading.” The copper strip that is shipped to Canada for processing (i.e., slit, electroplated, heat-treated, etc.) is classified in heading 7409, HTSUS. Upon importation into the U.S., the copper strip remains classified under heading 7409, HTSUS. As such, the tariff shift requirement of section 102.11(a)(3) is not met. Since an analysis of section 102.11(a) has not produced a country of origin determination, we turn to section 102.11(b) of the regulations. Section 102.11(b)(1) provides as follows:
(b) Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
(1) The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good, or . . .
The rule of interpretation set forth in 19 C.F.R. § 102.18(b)(1)(iii) states that if there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed under the 19 C.F.R. § 102.20 specific rule or other requirements applicable to the good, then that material will represent the single material that imparts the essential character to the good under 19 C.F.R. § 102.11. In this case, the material that does not undergo the applicable tariff shift is the copper strip. Therefore, the copper strip is the material that imparts the essential character. The country of origin for marking purposes is China.
Section 134.33, Customs Regulations (19 CFR 134.33), lists certain articles designated as “J-List” exceptions from the country of origin marking requirement. Included in this list are metal sheet and metal in similar forms. For purposes of country of origin marking, the copper strip described above is considered a metal product in similar forms. Accordingly, the strip is excepted from individual marking. However, the outermost container in which the strip is imported must be marked to indicate the country of origin. In addition, if the sheets are to be repacked in new containers after release from Customs custody, the certification requirements set forth in section 134.25, Customs Regulations, apply.
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 Angelia Amerson at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division