The tariff classification and status under the North American Free Trade Agreement (NAFTA), of files from Mexico; Article 509

N048876 February 5, 2009 CLA-2-48:OT:RR:E:NC:N2:234 CATEGORY: Classification TARIFF NO.: 4820.30.0040 Mr. Jorge Torres Interlink Trade Services 10601 S. Jackson Rd., Suite 200 Pharr, TX 78577 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of files from Mexico; Article 509 Dear Mr. Torres: In your letter dated January 12, 2009 on behalf of Esselte Corporation, you requested a ruling on the status of hanging files from Mexico under the NAFTA. In your letter you state that Esselte an office supplies manufacturer, using the brand names Esselte, Pendaflex and Oxford, will be manufacturing hanging file folders in the United States and further processing them in Mexico. The folders will be manufactured at Esselte’s facilities in Union, MO incorporating the following steps using paper and paperboard of US origin: Paper is tinted (painted or colored) to the desired color of the file folder Rods are made from steel rolls Tinted paper is cut to shape to form the file folder Hanging file folders are made with the rods attached Hanging file folders are packed in cartons Hanging file folders are shipped to Reynosa, Mexico After the hanging file folders are shipped to Reynosa, MX you state that they are further processed in Mexico from paper and paperboard of US origin. An additional twelve steps listed below entails the processing that the hanging file folders undergo in Esselte’s factory in Mexico: Hanging file folders are unpacked from the cartons Hanging file folders are cut in half and stored as work in process Linings (manila) are made on die cutting machines Paper is tinted for the gussets Gussets are cut on the gusset machines Gussets are crimped and formed on the gusset machines Linings are laminated to hanging folders Hanging file folders with linings are assembled with the gussets Finished products are collated in packs of four Finished products are shrink-wrapped together Shrink-wrapped products are packed in cartons Packed hanging file folders are shipped to the US to be imported for consumption You state that the above process applies to SKU 09313 which is a representative sample of the product line. The product that is being exported from the US to Mexico is a hanging file folder that is further processed to give it a greater capacity for the number of documents it will be able to accommodate. The item manufactured in the US is a hanging file folder and the item being returned to the US is a hanging file folder. The applicable tariff provision for the hanging file folder will be 4820.30.0040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Registers, account books, order books, receipt books, . . . folders, file covers, . . . of paper or paperboard: Binders (other than book covers), folders and file covers: Others . The general rate of duty will be Free. 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 http://www.usitc.gov/tata/hts/. General Note 12(b), 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-- (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; or (iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because-- (A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or (B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts, provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note. Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(i). The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). 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 Patricia Wilson at (646) 733-3037. Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Office of International Trade, Regulations and Rulings Mint Annex, 799 9th Street N.W., Washington, D.C. 20001-4501. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division