Classification and country of origin determination for FIBCs; 19 CFR 102.21(c)(1); wholly obtained or produced in a single country

N244563 August 23, 2013 CLA2-OT:RR:NC:N3:351 CATEGORY: Classification Jack Garbow President Material Motion, Inc. 203 Rio Circle Decatur, GA 30030 RE: Classification and country of origin determination for FIBCs; 19 CFR 102.21(c)(1); wholly obtained or produced in a single country Dear Mr. Garbow: This is in reply to your letter dated July 29, 2013, requesting a classification and country of origin determination for a flexible intermediate bulk container (FIBC), which will be imported into the United States. FACTS: The subject merchandise consists of an FIBC. It is manufactured in China from fabric of Chinese origin. In a telephone conversation with this office, you stated that the fabric is polypropylene coated for UV protection on the outer surface only. Such a fabric is a textile fabric for tariff purposes. The manufacturing operations for the FIBC in China are as follows: The textile fabric is cut and sewn into the FIBC. The FIBC has a pouring spout at the top and an emptying spout on the bottom, both of which close with attached webbed ties. It has a capacity of 1000 kgs (2200 lbs.). Although it is not in any of the documentation, we assume it weighs more than 1 kg. After the FIBC is imported into the United States, it will be stuffed with a plastic liner of similar dimensions; the plastic liner is made in the U.S. ISSUE: What are the classification and country of origin of the subject merchandise? CLASSIFICATION: The applicable subheading for the textile FIBC that is imported into the United States will be 6305.32.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for sacks and bags, of a kind used for the packing of goods: of man-made textile materials: flexible intermediate bulk containers, weighing one kilogram or more. The general rate of duty will be 8.4% 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/. COUNTRY OF ORIGIN - LAW AND ANALYSIS: Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995 in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21. Paragraph (c)(1) states, “The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.” As the FIBC was wholly obtained or produced in a single country, that is, China, country of origin is conferred in China. You also ask about the proper country of origin marking for the completed product, that is, the FIBC with the plastic liner that is made in the U.S. 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 Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. In this case, your customers are the ultimate purchasers of the FIBCs. An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. Accordingly, if Customs is satisfied that the article will remain in its container until it reaches your facility and if you can tell the country of origin of the FIBC by viewing the container in which it is packaged, the individual FIBCs would be excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d). Accordingly, marking the container in which the FIBCs are imported in lieu of marking the article itself is an acceptable country of origin marking for the imported FIBCs provided the port director is satisfied that the article will remain in the marked container until it reaches your facility. These same rules apply when you repackage the FIBCs after assembling the finished product, as explained below. You state that after you assemble the plastic liner to the textile FIBC, you sell the assembled item. The term “country of origin” is defined in 19 CFR 134.1(b) 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 . . . .” For tariff purposes, the courts have held that a substantial transformation occurs if a new and different article emerges having a distinctive name, character or use. AnheuserBusch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). In this case, the assembly process does not result in a substantial transformation in the U.S. The assembled FIBC with a plastic liner does not have a distinctive name, character or use different from the unlined imported textile FIBC, and therefore is not a good of the United States for marking purposes. Accordingly, it will be required to have a country of origin marking pursuant to 19 U.S.C. 1304 when sold in the United States. The FIBCs or the containers in which they are repacked must indicate the country of origin of the FIBCs, China, to the ultimate purchaser in the U.S. Whether the FIBC may be marked to include the U.S. origin of the liner is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 on the propriety of markings indicating that the liner is made in the U.S. HOLDING: The country of origin of the FIBC is China. The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2. 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 Mitchel Bayer at (646) 733-3102. Sincerely, Myles B. Harmon Acting Director National Commodity Specialist Division