The tariff classification and status under the North American Free Trade Agreement (NAFTA) of Enviroshingle roofing shingles and ridge caps from Canada; Article 509

N251646 April 10, 2014 CLA-2-39:OT:RR:NC:N2:421 CATEGORY: Classification TARIFF NO.: 3925.90.0000 Ms. Stefani A. Paolucci Wilson International Inc. 160 Wales Avenue, Suite 100 Tonawanda, NY 14150 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of Enviroshingle roofing shingles and ridge caps from Canada; Article 509 Dear Ms. Paolucci: In your letter dated March 19, 2014, on behalf of Enviroshake Inc., you requested a tariff classification ruling. Pictures and descriptive literature were included with your letter. The products are described as Enviroshingle roofing shingles and ridge caps and are used in place of traditional cedar roofing materials. The roofing products are constructed of polyethylene and polypropylene with wood chips and wood fibers used as filler material. The composite is designed to have the durability, longevity and performance of plastics with a color, grain and finish that resembles wood. The shingles measure 20 inches in width by 12 inches in length with a thickness of approximately 1/2 inch at the butt end and 1/8 inch at the tip. The ridge caps are custom made for each project and are available in 3/12 through 16/12 pitch. Although you refer to the shingles as “profiles,” the shingles and caps are not profile shapes for tariff purposes since they are tapered to allow for overlap and thus do not have a uniform cross section throughout the length. You suggest classification in subheading 4418.90.4695, Harmonized Tariff Schedule of the Unites States (HTSUS), which provides for builders’ joinery and carpentry of wood, including cellular wood panels and assembled flooring panels; shingles and shakes. However, the composite maintains all the characteristics of plastics, with the wood chips and fibers acting as filler material for the polyethylene and polypropylene. The essential character is imparted by the plastics. The applicable subheading for the Enviroshingle roofing shingles and ridge caps will be 3925.90.0000, HTSUS, which provides for builders’ ware of plastics, not elsewhere specified or included: other. The general rate of duty will be 5.3 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 have asked whether the Enviroshingle products are eligible for treatment under the NAFTA. 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. You have provided a list of the materials used in the manufacture of the roofing components, including wood chips, low density polyethylene, polypropylene, rubber crumb and various additives. All of the materials are said to originate in either the United States or Canada and are converted into the roofing products in Canada. Based on the facts provided, the Enviroshingle roofing shingles and ridge caps qualify for NAFTA preferential treatment as long as the Regional Value Requirements are met 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, including Regional Value Content requirements specified in General Note 12(t) (39.10). This ruling letter has not addressed the Regional Value Content (RVC) of the subject goods. If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, provide the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)), to 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, along with a copy of this letter. That information should specify the country of origin of each individual component, the country of origin of each of the precursor materials of those individual components, and the country of origin of all other ingredients, including the country of origin of each precursor ingredient. Provide a breakdown showing the cost of each component, the country of each processing step and the cost of each processing step. You have also requested a ruling on the country of origin. 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. The country of origin marking requirements for a “good of a NAFTA country” are also determined in accordance with Annex 311 of the North American Free Trade Agreement (“NAFTA”), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations. Section 134.1(b) of the regulations defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 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 sets forth the “NAFTA Marking Rules” for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations sets forth the required hierarchy for determining country of origin for marking purposes. Paragraph (a) of this section provides that the country of origin of a good is the country in which (1) the good is wholly obtained or produced, or (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 of the regulations. "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 the shingles and ridge caps are produced in Canada, the components that originate in the United States are considered to be foreign material, so Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case and cannot yield a country of origin determination. Analysis thus proceeds to Section 102.11(a)(3), which provides that the country of origin is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 CFR 102.20. Section 102.20 requires a change to heading 3922 through 3926 from any other subheading, including another heading within that group, except for a change to heading 3926 from articles of apparel and clothing accessories, other articles of plastics, or articles of other materials of headings 3901 to 3914 of heading 9619. The roofing products are classified in heading 3925, and all of the materials used in the manufacture of these products are classified in provisions other than heading 3925. Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that all of the component materials used in the manufacture of the shingles and ridge caps undergo the applicable tariff shift and that the shingles and ridge caps are goods of Canada for marking and country of origin 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, Gwenn Klein Kirschner Acting Director National Commodity Specialist Division