The tariff classification and country of origin of water sampling bag kits from Canada

N238197 March 4, 2013 CLA-2-39:OT:RR:NC:N4:421 CATEGORY: Classification TARIFF NO.: 3923.21.0095 Ms. Louise Chevanelle Formation Douane Louise Chevanelle Inc. 490 Rue Providence Granby, QC, Canada J2H 2H6 RE: The tariff classification and country of origin of water sampling bag kits from Canada Dear Ms. Chevanelle: In your letter dated January 28, 2013, on behalf of Labplas Canada, you requested a ruling on the classification and country of origin of water sampling kits from Canada. Two samples, described as water sampling bag kits, were provided with your letter. The bags are designed to collect, carry and contain chlorinated water samples in aseptic conditions. Product code KWS 21100 includes a polyethylene bag and one 10 mg thiosulfate pill. The bag is made of transparent low density polyethylene plastic sheeting, measures 3 inches by 7 inches and has a capacity of 100 ml. A white write-on surface 1 ¾ inches in width and 4 ½ inches in length is printed on one side of the bag. A 6 inch sealing strip is permanently attached along the width of the bag at the top. The sealing strip consists of metal wire encased in a plastic strip. Product code KWS 22200 consists of a transparent plastic bag containing three 10 mg thiosulfate pills. The bag is made of transparent low density polyethylene plastic sheeting, measures 4 ½ inches in width by 9 inches in length and has a capacity of 300 ml. A white write-on surface 2 ¾ inches in width by 5 ¼ inches in length is printed on one side of the bag. A 7 ½ inch sealing strip is permanently attached along the width of the bag at the top. The sealing strip consists of metal wire encased in a plastic strip. The bags are used to collect water for testing. The thiosulfate pill is used to neutralize the chlorine in the collected sample water and preserve the water sample during transportation. The thiosulfate plays no role in the analysis or testing of the water. You indicate that in most cases the water sampling bags are sold without any thiosulfate pill. The water to be tested is put into the bag, the top is folded, and the edges of the sealing strip that extend past the width of the bag are folded over to form a closure at the top of the bag. The collected water sample is then transported to a laboratory for analysis. The bags are manufactured in Canada. The thiosulfate pills originate in the United States. After the pills are packed into the sampling bags, the complete kits are sterilized by gamma irradiation in Canada to ensure that there is no bacterial contamination that would alter the results of the future tests done in the laboratory on the collected water samples. The kits are sold to distributors, who resell the kits to the end users. Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. The Explanatory Notes to the Harmonized Tariff System provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level. Explanatory Note X to GRI 3(b) provides that the term "goods put up in sets for retail sale" means goods that: (a) consist of at least two different articles which are, prima facie, classifiable in different headings; (b) consist of articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking. Goods classifiable under GRI 3(b) are classified as if they consisted of the material or component which gives them their essential character, which may be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the article. The water sampling kits are considered to be sets for tariff classification purposes. Since the pill plays only a minor role in the function of the product, the sampling bag is considered to be the component that imparts the essential character. The applicable subheading for the water sampling bags with the thiosulfate pills, products KWS 21100 and KWS 22200, will be 3923.21.0095, HTSUS, which provides for articles for the conveyance or packing of goods, of plastics…sacks and bags: of polymers of ethylene…other: other. The general rate of duty will be 3 percent ad valorem. 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/. You state that you believe that the pills do not qualify for classification in heading 9801, HTSUS, since the goods are not in the same condition as exported. This office agrees. Heading 9801, HTSUS, allows products of the United States, when returned after having been exported, to be entered free of duty as long as they have not been advanced in value or improved in condition by any process of manufacture or other means while abroad. CBP Headquarters ruled, in HQ 560681, dated December 2, 1997, that reagent and culture media products that were made in the United States and sent to Canada to be sterilized were advanced in value and improved in condition by that processing. You have also inquired about the country of origin of the kits. The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulation (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Stipulated in 19 CFR 134.1 (b), “country of origin” is defined as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within the meaning of this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.” Section 134.1(j) of the regulations provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations provides that a “good of a NAFTA country” may be marked with the name of the country of origin in English, French or Spanish. Part 102 of the regulations (19 C.F.R. Part 102) sets forth the "NAFTA Marking Rules." Section 102.11 of the regulations (19 C.F.R. §102.11) sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) provides that the country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied. "Foreign material" is defined in section 102.1(e) of the regulations as "a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced." Since neither of the two sets is wholly obtained or produced, or produced exclusively from domestic (Canadian) materials, section 102.11(a)(3) is the applicable rule which must first be applied. In order to determine whether Canada is the country of origin under this rule, we must look at those materials whose country of origin is other than Canada, which includes material of U.S-origin ("foreign material" under 19 C.F.R. §102.11(e)). As each of the two sets is classified under subheading 3923.21, HTSUS, the change in tariff classification must be made in accordance with section 102.20(g), which requires a change to heading 3922 through 3926 from any other heading, including another heading within that group. The foreign (U.S.) thiosulfate pill is described in heading 2832, so it meets the required tariff shift. Therefore, Canada is considered to be the country of origin for marking purposes. 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 Joan Mazzola at (646) 733-3023. Sincerely, Thomas J. Russo Director National Commodity Specialist Division