Eligibility Status under the United States-Singapore Free Trade Agreement (SFTA) of Tafmer XM from Singapore, Third Country Transportation and Warehousing in Japan

N252063 April 14, 2014 CLA-2-39:OT:RR:NC:N2:237 CATEGORY: Free Trade Act Thomas J. O’Donnell Clark Hill LLC 150 N. Michigan Avenue - Suite 2700 Chicago, Illinois 60601 RE: Eligibility Status under the United States-Singapore Free Trade Agreement (SFTA) of Tafmer XM from Singapore, Third Country Transportation and Warehousing in Japan Dear Mr. O’Donnell: In your letter dated March 20, 2014, on behalf of Mitsui Chemicals Inc. (MCI) in Tokyo, you requested a ruling on the eligibility of goods transported and warehoused in a non-SFTA county. You claim that Tafmer XM copolymer made by Mitsui Elastomers Ltd. in Singapore will qualify as originating goods under GN 25 (b) (iii) (A), HTSUS, and CFR § 10.531(b) (1) and (2). After the goods are transformed in Singapore, they will be shipped to Japan and stored in a customs bonded warehouse. Nothing will be done to the goods in Japan. When an order is received from the United States, the goods will be withdrawn from the warehouse in the exact same packaging, sold at wholesale to MCI, shipped to the United States and entered for consumption. General Note 25 (b), HTSUS, sets forth the criteria for determining whether a good is originating under the SFTA. GN 25 (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), (n) and (o) thereof, goods imported into the customs territory of the United States are eligible for treatment as originating goods of a SFTA country under the terms of this note only if they– (i) were wholly obtained or produced entirely in the territory of Singapore or of the United States, or both; (ii) are goods that, in their condition as imported, are enumerated in subdivision (m) of this note and imported from the territory of Singapore; or (iii) have been transformed in the territory of Singapore or of the United States, or both, so that each non-originating material: (A) undergoes an applicable change in tariff classification set out in subdivision (o) of this note as a result of production occurring entirely in the territory of Singapore or of the United States, or both; or (B) if no change in tariff classification is required, the good otherwise satisfies the applicable requirements set forth in such subdivision (o). An importer may make a claim for preferential treatment under this note based on the importer's knowledge or on information in the importer's possession that the good qualifies as an originating good. For the purposes of this note, the term “SFTA country” refers only to Singapore or to the United States. Title 19, Code of Federal Regulations (“CFR”) was amended on June 11, 2007 to implement the SFTA. CFR §10.531covers: Originating Goods under the SFTA. CFR §10.531states: Except as provided in CFR § 10.543 of this subpart, a good imported into the customs territory of the United States will be considered an originating good under the SFTA only if: (a) The good is wholly obtained or produced entirely in the territory of one or both of the Parties; (b) The good is transformed in one or both of the Parties so that: (1) Each non-originating material undergoes an applicable change in tariff classification specified in General Note 25(o), HTSUS, as a result of production occurring entirely in the territory of one or both of the Parties; and (2) The good otherwise satisfies any applicable regional value content or other requirements specified in General Note 25(o), HTSUS; or (c) The good, in its condition as imported into the United States, is enumerated as an Integrated Sourcing Initiative good in General Note 25(m), HTSUS, and is imported from the territory of Singapore. General Note 25 (c) (iii), HTSUS, sets forth the criteria regarding Third Country Transportation under the SFTA. GN 25 (c) (iii), HTSUS, (19 U.S.C. § 1202) states that: A good shall not be considered to be an originating good if, after it has undergone production that satisfies the requirements of this note, the good undergoes subsequent production or any other operation outside the territory of Singapore and of the United States, other than unloading, reloading or any other operation necessary to preserve it in good condition or to transport the good to the territory of Singapore or of the United States. CFR § 10.542 covers: Third Country Transportation under the SFTA. CFR § 10.542 provides: General. A good shall not be considered an originating good by reason of having undergone production that would enable the good to qualify as an originating good if subsequent to that production the good undergoes further production or any other operation outside the territories of the parties, other than unloading, reloading, or any other process necessary to preserve the good in good condition or to transport the good to the territory of a Party. Documentary Evidence. An importer making a claim that a good is originating may be required to demonstrate, to CBP’s satisfaction, that no further production or subsequent operation, other than permitted under paragraph (a) of this section, occurred outside the territories of the Parties. An importer may demonstrate compliance with this section by submitting documentary evidence. Such evidence may include, but is not limited to, bills of lading, airway bills, packaging lists, commercial invoices, receiving and inventory records, and customs entry and exit documents. CFR §10.515 covers: Effect of noncompliance; failure to provide documentation regarding third country transportation. CFR §10.515 provides: Effect of noncompliance. If the importer fails to comply with any requirement under this subpart, including submission of a complete supporting statement under §10.511 of this subpart, when requested, the port director may deny preferential treatment to the imported good. Failure to provide documentation regarding third country transportation. Where the requirements for preferential treatment set forth elsewhere in this subpart are met, the port director nevertheless may deny preferential treatment to an originating good if the good is shipped through or transshipped in a country other than Singapore or the United States, and the importer of the good does not provide, at the request of the port director, evidence demonstrating to the satisfaction of the port director that the conditions set forth in §10.542 of this subpart were met. Based on the facts provided, the goods transformed in Singapore and transported and warehoused in Japan, on meeting the requirements for “Third Country Transportation” under GN 25 (c) (iii), HTSUS and CFR § 10.542, will be eligible for duty free entry and merchandise processing fee free entry, provided they meet the requirements for “originating goods” under GN 25 (b) (iii) (A), HTSUS, and CFR § 10.531(b) (1) and (2) and upon compliance with all other applicable laws, regulations, and agreements. Your inquiry and this ruling letter have not addressed the tariff classification of the imported goods, the applicable change in tariff classification and Regional Value Content (RVC) of the subject goods under GN 25(o). If you desire a ruling on the tariff classification, the applicable change in tariff classification and RVC under GN 25(o) for your goods and their eligibility for preferential treatment under the SFTA, provide the information noted in GN 25(g), HTSUS, to the U.S. Customs and Border Protection, Customs Information Exchange, 10th Floor, One Penn Plaza, New York, NY 10119, attn: Binding Rulings Section. If your request was submitted electronically and the information required does not involve sending a sample, you can re-submit your request and the additional information electronically, along with a copy of this letter. 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 Frank Cantone at frank.l.cantone@cbp.dhs.gov. Sincerely, Gwenn Klein Kirschner Acting Director National Commodity Specialist Division