The tariff classification and country of origin for research discs from Canada

N285686 May 25, 2017 CLA-2-73:RR:NC:N1:113 CATEGORY: Classification TARIFF NO.: 7326.90.8688 Mr. Jack Poortenaar Muzeen & Blythe Ltd. 1221 Inkster Blvd. Winnipeg, Manitoba R2X 1P4 Canada RE: The tariff classification and country of origin for research discs from Canada Dear Mr. Poortenaar: In your original letter dated March 1, 2017, you requested a ruling on the tariff classification and the country of origin for research discs from Canada. In response to our request for additional information, our office received answers to our questions in your second letter dated April 17, 2017. Samples of the research discs were submitted for our review and will be returned as requested. The products under consideration are described as stainless steel research discs. You indicated in your letter that a sheet of cold rolled stainless steel is imported into Canada from Taiwan. You stated that Muzeen & Blythe Ltd. purchases a sheet of stainless steel that measures approximately 48” x 120” x 0.7 mm thick from the importer in Canada. This sheet is crated and shipped to Muzeen & Blythe in Winnipeg. The steel sheet will be sent to a local shop and punched into small round discs that measure 1 cm in diameter. The discs are packaged in bags of 500 pieces and sold to customers mainly in Canada and the United States. The metal discs for OECD Microbicidal Tests are intended to mimic hard non-porous surfaces (stainless steel counter tops and appliances) typically found in homes, food production, health care and farms, etc. Section 102.11 of the Customs Regulations (19 C.F.R. § 102.11) sets forth the required hierarchy for determining the country of origin of goods from NAFTA countries. Section 102.11(a) of the Customs Regulations states 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 §102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.   The requirements of C.F.R. 102.11(a) (1) and (2) are not applicable since the subject stainless steel research discs are neither wholly obtained nor produced exclusively from domestic materials and therefore analysis must continue to C.F.R. 102.11(a)(3) to determine the country of origin. In this regard, the relevant tariff rule at issue under C.F.R 102.20 (n) states: “A change to heading 7325 - 7326 from any other heading, including another subheading within that group.” Since a change occurs in the classification of the stainless steel research discs in Canada, the subject merchandise has undergone the required tariff shift as noted above and therefore section 102.11(a)(3) is applicable.    Applying the NAFTA Rules of Origin set forth in Subpart B of the Customs Regulations, Section 102.11(a) and Section 102.20 to the facts of this case, we find that the subject stainless steel research discs are goods of Canada. You proposed classification for the stainless steel research discs in heading 7219, Harmonized Tariff Schedule of the United States (HTSUS), which provides for flat-rolled products of stainless steel, of a width of 600 mm or more. Upon review of the research discs, in the opinion of this office the sheet which is imported from Taiwan into Canada has been substantially transformed in Canada from stainless steel sheet into a new and different article of commerce, small test discs for testing microbial cleaners in a lab setting. As such the country of origin of the imported material has changed to Canada. The subject material by virtue of its change from sheet to small test discs is no longer classifiable as flat-rolled stainless steel. Therefore, the research discs in question cannot be classified in heading 7219, HTSUS, and would be classified according to their constituent material (steel). Accordingly, the subject discs are classified in heading 7326, HTSUS, which provides for other articles of iron or steel. The applicable tariff provision for the stainless steel research discs will be 7326.90.8688, HTSUS, which provides for other articles of iron or steel, other…other. The general rate of duty will be 2.9 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/. 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 Ann Taub at ann.taub@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division