THE COUNTRY OF ORIGIN MARKING OF LOTTERY TICKETS MADE PARTLY IN THE UNITED STATES AND PARTLY IN CANADA

N271676 January 27, 2016 MAR-2 OT:RR:NC:N4:234 CATEGORY: MARKING Ericka M. Fritz Compliance Manager GHY USA Inc. 572 South Fifth Street Pembina, ND 58271 RE: THE COUNTRY OF ORIGIN MARKING OF LOTTERY TICKETS MADE PARTLY IN THE UNITED STATES AND PARTLY IN CANADA Dear Ms. Fritz: This is in response to your letter dated December 15, 2015, requesting a ruling on whether the proposed marking of “Printed in USA” is an acceptable county of origin marking for imported finished lottery tickets, partly printed in Canada on the front-side of the ticket and partly printed in the United States on the backside of the ticket. A marked sample was submitted with your letter with the backside of the completed lottery ticket indicating the phrase “Printed in USA.” Heading 4911, Harmonized Tariff Schedule of the United States (HTSUS), provides for “Other printed matter, including printed pictures and photographs.” The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) to the HTSUS, at heading 4911 state that this heading “covers all printed matter... of this Chapter... but not more particularly covered by any of the preceding headings of the Chapter.” The ENs to heading 4911 in pertinent part provide that this heading includes “cinema tickets, theatre tickets, concert tickets, air tickets, railway tickets, couch tickets, lottery tickets, scratch cards, raffle tickets and tombola tickets.” As the printed lottery tickets are not covered by any of the preceding headings of Chapter 49, HTSUS, and as they are printed matter, they are classifiable in heading 4911, HTSUS. The finished lottery tickets, provided they use a lithographic process of printing, are classified in subheading 4911.99.6000, HTSUS, which provides for “Other printed matter, including printed pictures and photographs: Other: Other: Other: Printed on paper in whole or in part by a lithographic process.” With a few exceptions, Code of Federal Regulations (CFR), Title 19, Part 134 (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 USC 1304. In Section 134.1 (b), the country of origin of an article 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 for country of origin marking purposes. 19 CFR Part 134 with its Section 134.1 (b) is not applicable to North American Free Trade Agreement (NAFTA) goods, as the country of origin of NAFTA goods will be determined in accordance with 19 CFR 102 – Rules of Origin. 19 CFR, Section 102.20, “specific rule by tariff classification,” states: for 4910-4911 – A change to heading 4910 through 4911 from any other heading, including another heading within that group. As both the backside of the ticket printed in the United States and the front-side of the ticket printed in Canada are classifiable in heading 4911, HTSUS, neither material meets the tariff shift rule of origin for marking purposes. Consequently, as the finished lottery tickets: are not goods wholly obtained or produced; are not goods produced exclusively from domestic materials; and fail to meet the requirement that each foreign material incorporated in the good undergoes an applicable change in tariff classification set out in Section 102.20 and satisfies any other applicable requirements of that section, we must resort to Section 102.11 (b) (1) to determine the proper country of origin for the lottery tickets. Section 102.11 (b) (1) provides that the country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good. Further provided at Section 102.18 (b) (1) is the interpretive rules for identifying the material that imparts the essential character to the good under Section 102.11 (b) (1). The interpretive rule states: [t]he only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under Section 102.20 specific rule or other requirements applicable to the good. Both the foreign material, the United States printed backside, and the domestic material, the Canada printed front-side, are classified in a tariff provision from which a change in tariff classification is not allowed. The two printed materials form our essential character analysis. The backside of the lottery ticket contains the rules for the lottery ticket and the front-side provides the game board, the bonus word and prize legend for the lottery ticket. It is our position that the front-side of the lottery ticket imparts the essential character to the printed good, in that the action, playing and anticipation of a possible win all occur on the front-side of the ticket. Accordingly, the good is of Canadian origin for marking purposes. With regard country of origin marking, a prerequisite to determining the applicability of the requirements of 19 U.S.C. 1304 is ascertaining the identity of the ultimate purchaser of the imported articles. Section 134.1 (d), Customs Regulations (19 CFR 134.1 (d)), provides that the ultimate purchaser of a good of a NAFTA country is the last person in the United States who purchases the good in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. If the imported article is distributed as a gift, the recipient is the ultimate purchaser, unless the good is a good of a NAFTA country, in which case the purchaser of the gift is the ultimate purchaser. See 19 CFR 134.1 (d). Consistent with New York ruling, NY 806608 dated February 15, 1995, it is our opinion that the lottery tickets are sold at retail in their imported condition, and as such, the purchaser at retail who will buy one or more tickets must be informed on the tickets themselves, that the country of origin is Canada. Your sample marked “Printed in USA” on the backside of the lottery tickets misrepresents the country of origin of the lottery tickets, and therefore {cannot be used} to indicate country of origin to the ultimate purchaser of the ticket(s). In Headquarters ruling letters HQ 559626 dated October 17, 1996 and HQ W478998 dated August 31, 2007, the phrase “Printed in” was regarded as an indicator of origin. Accordingly, the lottery tickets must be marked to indicate country of origin Canada on the lottery tickets or in the alternative, the marking “Printed in Canada” on the lottery tickets will also satisfy the marking requirements. It is further our opinion, if you use the words “Made in Canada,” “Produced in Canada,” “Product of Canada,” or similar words, coupled with “backside printed in USA” and “front-side printed in Canada” they too would satisfy the marking requirements. These markings must be in conspicuous place, easily seen with normal handling of the articles – see 19 CFR 134 (k). This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Neil H. Levy (NIS-433 and acting NIS-234) at neil.h.levy@cbp.dhs.gov. Sincerely, Deborah C. Marinucci Acting Director National Commodity Specialist Division