The tariff classification and status under the North American Free Trade Agreement (NAFTA), of parchment bags, lotus cups, tulip cups and crimp cups from Canada.

N238068 March 1, 2013 CLA-2-48:OT:RR:NC:2:234 CATEGORY: Classification TARIFF NO.: 4823.90.8600 Ms. Sheri G. Lawson Willson International Inc. 160 Wales Avenue, Ste 100 Tonawanda, NY 14150 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of parchment bags, lotus cups, tulip cups and crimp cups from Canada. Dear Ms. Lawson: In your letter dated February 1, 2013, on behalf of your client, Paperchef Inc., you requested a ruling on the status of parchment bags, lotus cups, tulip cups and crimp cups from Canada under the NAFTA. You state in your request that all of the items will be formed from paper rolls that originated in France and were substantially transformed in Canada into separate and distinct articles of the commerce. All the items will be sold to retailers and distributors. Items 1000202 and 1000201 are 23.25 inch wide reels transformed into parchment bags. The paper is one side silicone treated natural genuine vegetable parchment made in France. The reels are loaded onto a machine where the paper is cut to length, folded over and glued to form bags in Canada. Parchment bags are used for cooking food in the oven Items 1000245 and 1000246 are 27 inch wide reels transformed into lotus cups and tulip cups. The paper is one side silicone treated natural genuine vegetable parchment made in France. The reels are cut into 6.3” X 6.3” blanks, full ink printed and then punched into cups in Canada. The cups are used for baking muffins and cupcakes in the oven. Item 1000248 is a 10 inch wide reel transformed into mini crimp cups, item 1000247 is a 13.25 inch wide reel transformed into large crimp cups and item 1000249 is a 19 inch wide reel transformed into extra large crimp cups. The paper is two sided silicone treated natural genuine vegetable parchment made in France. The reels are fed through a machine and punched into cups in Canada. The cups are used for baking muffins and cupcakes in the oven. The applicable tariff provision for the parchment bags, lotus cups, tulip cups and crimp cups will be 4823.90.8600, HTSUS, which provides for Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers: Other: Other: Other: Other: Other. 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 non-originating 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. General Note 12(t)/48.7(D), which is applicable to the items, requires: “A change to any other good of heading 4823 from strip or rolls of a width exceeding 15 cm of heading 4823, other than strips or rolls of heading 4823 which but for their width would be classified in headings 4803, 4809 or 4814, floor coverings on a base of paper or paperboard of heading 4823, or any other heading, except from strip or rolls of a width exceeding 15 cm but not exceeding 36 cm or paper or paperboard in rectangular (including square) sheets with one side not exceeding 15 cm in the unfolded state of headings 4802, 4810 or 4811, or from headings 4817 through 4822.” Based on the facts provided, the parchment bags (items 1000202 and 1000201), lotus cups (item 1000245), tulip cups (item 1000246), and extra large crimp cups (item 1000249) described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b) (ii) (A). The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. The mini (item 1000248) and large (item 1000247) crimp cups do not qualify for preferential treatment under the NAFTA because none of the above requirements are met. Items 1000248 and 1000247 are rolls of a width exceeding 15 cm but not exceeding 36 cm. 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 Albert Gamble at (646) 733-3037. Sincerely, Thomas J. Russo Director National Commodity Specialist Division