Modification of NY 188116; Apomorphine hydrochloride ampoules NAFTA Marking;102.19(a)

HQ H200037 May 21, 2013 OT:RR:CTF:VS H200037 KSG Brian Kavanaugh Deringer Logistics Consulting Group 1 Lincoln Boulevard Suite 225 Rouses Point NY 12979 RE: Modification of NY 188116; Apomorphine hydrochloride ampoules: NAFTA Marking;102.19(a) Dear Mr. Kavanaugh: In New York Ruling Letter (“NY”) NY 188116, dated November 15, 2002, CBP ruled that imported apomorphine hydrochloride in ampoules qualified as goods originating in the territory of a NAFTA party and that the country of origin for marking purposes was France. Upon review of NY 188166, we have determined that the portion of the ruling relating to the country of origin marking is incorrect and that the country of origin for marking purposes under the NAFTA Marking Rules is Canada. Notice of the proposed action was published in the Customs Bulletin, Vol. 47, No. 18, on April 24, 2013. No comments were received. FACTS: Apomorphine hydrochloride is produced in France and exported to Canada. Sodium hydroxide is produced in Sweden and exported to Canada. Hydrochloric acid is produced in the U.S. and exported to Canada. In Canada, the three ingredients are mixed and put up in ampoules, packaged, labeled, and shipped to the United States. Apomorphine hydrochloride, which you state is classified in subheading 2933.99 of the Harmonized Tariff Schedule of the United States (“HTSUS”), is the active ingredient in the finished product. In NY 188166, CBP determined that the imported ampoules were classified in subheading 3004.90, HTSUS. Further, in NY 188116, CBP held that the apomorphine hydrochloride ampoules were NAFTA originating under General Note (“GN”)12, HTSUS, and that the country of origin for marking purposes is France. ISSUE: What is the country of origin of the imported apomorphine hydrochloride ampoules under the NAFTA Marking Rules? LAW AND ANALYSIS: General Note (“GN”) 12, HTSUS, incorporates Article 401 of NAFTA into the HTSUS. General Note 12(a)(i) provides, in pertinent part: (i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn followed by the symbol “CA” in parentheses, are eligible for such duty rate, in accordance with section 201 of the NAFTA Implementation Act. Accordingly, the imported product will be eligible for the “Special” “CA” rate of duty provided it is a NAFTA “originating” good under GN 12(b), HTSUS, and qualifies to be marked as a product of Canada under the NAFTA Marking Rules. GN 12(b), HTSUS, provides, in pertinent part: 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— (i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and /or the United States; or (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; or (iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials. (emphasis added) The apomorphine hydrochloride ampoules were not produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials. Therefore, we must consider whether they satisfy the tariff-shift rule set forth in GN 12(t), HTSUS. The GN 12 rule for subheading 3004.90, HTSUS, is as follows: A change to subheading 3004.90 from any other subheading, except from, subheading 3006.92 In this case, the tariff shift rule is satisfied and the ampoules are considered originating goods under GN 12. We must next consider whether the goods qualify to be marked as goods of Canada under the NAFTA Marking Rules. Under 19 CFR 102.11(a), the country of origin of a good is the country in which: The good is wholly obtained or produced; The good is produced exclusively from domestic materials; or 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. This product is neither wholly obtained or produced in a single NAFTA country or produced exclusively from domestic materials. The tariff shift rule for goods of subheading 3004.90 set forth in 19 CFR 102.20 is as follows: A change to subheading 3004.90 from any other subheading, except from subheading 3003.90 or 3006.92, and provided that the domestic content of the therapeutic or prophylactic content is no less than 40 percent by weight of the total therapeutic or prophylactic content. In this case, the 40 percent domestic content requirement is not met. Therefore, the tariff shift rule set forth in 19 CFR 102.20 is not met. Applying 102.11(b)(1), the apomorphine hydrochloride from France is the active ingredient and it imparts the essential character to the finished product. However, 19 CFR 102.19(a) provides as follows: …if a good which is originating within the meaning of 181.1(q) of this chapter is not determined under 102.11(a) or (b) or 102.21 to be a good of single NAFTA country, the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing, provided that a Certificate of Origin (see 181.11 of this Chapter) has been completed and signed for the good. The language of 19 CFR 102.19(a) must be examined because the good has been determined to satisfy the General Note 12 tariff shift rule. The manufacturing that occurs in Canada in this case is more than minor processing as defined in 19 CFR 102.1(m). Since the apomorphine hydrochloride ampoules underwent production other than minor processing in Canada, pursuant to 19 CFR 102.19(a), the country of origin for marking purposes under the NAFTA Marking Rules is Canada. HOLDING: The country of origin for marking purposes of the imported apomorphine hydrochloride ampoules, processed as described above, is Canada. EFFECT ON OTHER RULNGS: NY 188116 is hereby MODIFIED. Pursuant to 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin. Sincerely, Myles B. Harmon, Director, Commercial & Trade Facilitation Division