Ruling Request on Eligibility for Preferential Treatment under DR-CAFTA of Certain Insulated Cooler Bags Produced in El Salvador from Non-originating Materials

N225019 August 7, 2012 CLA-2-42:OT:RR:NC:N4:441 CATEGORY: Classification TARIFF NO.: 4202.92. Gregory S. McCue Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC 20036-1795 RE: Ruling Request on Eligibility for Preferential Treatment under DR-CAFTA of Certain Insulated Cooler Bags Produced in El Salvador from Non-originating Materials Dear Mr. McCue: This is in response to your letter dated July 6, 2012, on behalf of Igloo Corporation concerning your request for a ruling on the eligibility for preferential treatment under the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (DR-CAFTA) of certain insulated cooler bags produced by Igloo in El Salvador from non-originating materials. The merchandise at issue consists of five styles of insulated cooler bags that will be assembled in El Salvador from non-originating materials. Samples were not submitted but diagrams were included with your request. The first article is the Bro Lunch Playmate, item number 13-SB-0002. It is a soft-sided insulated cooler bag with a molded rubber handle and a removable strap. The second article is the HLS Series, item number 12-JD-0203. It is a soft-sided insulated cooler bag with a removable plastic liner and shoulder strap. It is constructed in three sizes. The third article is the Medium Duffle Cooler, item number 12-JM-0019-01. The forth article is the Sam’s Club Shopper Tote, item number 13-LH-0010. And the fifth article is the Bro Lunch Bag Tote, item number 13-SB-0003. You state in your request that the manufacturing operations for each of these five articles will be generally the same. Large rolls of polyester fabric with polyurethane backing, plastic rubberized handles, D-rings, sliders, textile linings for the interiors, rolls of mesh fabric, zippers and pulls, hooks and loops, rolls of elastic, lightweight polypropylene, piping, piping fabric, pocket linings, silk-screens, binding-handle wrap, and labels will be shipped to El Salvador from non-originating countries. All other inputs will originate from El Salvador or another DR-CAFTA country. Cotton canvas sheeting will be shipped from Guatemala. Rolls of insulating foam will be shipped from Costa Rica. Molded plastic bottoms (for the articles in which one is used) will be shipped from the United States. The materials will then be cut in mass quantities in the El Salvadoran factory and then sewn into the final products via an assembly line. The finished cooler bags will then be imported directly into the United States from El Salvador. Without samples we cannot provide the specific classification; however, insulated cooler bags with an outer surface of textile or an outer surface of plastic sheeting are classified in subheading 4202.92, Harmonized Tariff Schedule of the United States (HTSUS). General Note (GN) 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that: For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if— (i) the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement; (ii) the good was produced entirely in the territory of one or more of the parties to the Agreement, and— (A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or (B) the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note; and the good satisfies all other applicable requirements of this note; or (iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials. As the subject merchandise is assembled in El Salvador from non-originating components, the provisions of GN 29(b)(ii)(A) and GN 29(n) apply. Specifically, the subject cooler bags will have to satisfy the tariff change rule of GN 29(n), Chapter 42, HTSUS, rule 9, which states that: A change to subheading 4202.92 from any other chapter, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement. Based on the facts provided, the insulated cooler bags qualify for DR-CAFTA preferential treatment, because they meet the requirements of HTSUS General Note 29(b)(ii)(A). The merchandise will therefore be entitled to a free rate of duty under the DR-CAFTA upon compliance with all applicable laws, regulations, and agreements. 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 Vikki Lazaro at (646) 733-3041. Sincerely, Thomas J. Russo Director National Commodity Specialist Division