Applicability of the North American Free Trade Agreement to imports of thermal paper

N306776 November 7, 2019 MAR-2-44:OT:RR:NC:1:130 CATEGORY: Trade Agreements Mrs. Rosie Riddell Western Diazo 8524 Bowfort Road NW Calgary, t3b 3Y6 CANADA RE: Applicability of the North American Free Trade Agreement to imports of thermal paper Dear Mrs. Riddell: In your letter, dated October 16, 2019, you requested a binding trade program ruling. The ruling was requested on thermal paper. Product information was submitted for our review. In your submission, you describe a scenario wherein master rolls of BPA-free thermal paper in widths of 25” to 26” are imported into Canada from South Korea and Japan. The products are being entered into Canada under Harmonized Tariff Schedule subheading 4811.90. In Canada, these rolls are cut to size, namely to widths of 1.5” to 4.5” and lengths up to 500 feet. These smaller width rolls are then imported into the United States, also under subheading 4811.90, Harmonized Tariff Schedule of the United States (HTSUS). You wish to know if the country of origin of the smaller rolls is Canada and if North American Free Trade Agreement (NAFTA) benefits apply to the imports into the United States. General Note 12, HTSUS, incorporates Article 401 of the NAFTA into the HTSUS. General Note 12(a)(i) provides, in pertinent part: (a) Goods originating in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided herein. For the purposes of this note-- (i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and goods enumerated in subdivision (u) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act. 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— (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; Subdivision (t) states that, in order to be subject to NAFTA, the manufacturing in a NAFTA country must result in a change as follows: A change to paper or paperboard in strips or rolls of a width not exceeding 15 cm of heading 4811 from strips or rolls of a width exceeding 15 cm of heading 4811. The manufacturing of Japanese or Korean paper rolls in Canada is described by this rule. Because the 25” to 26” rolls are classifiable in heading 4811 and exceed 15cm in width, and the resulting 1.5” to 4.5” rolls are also classifiable in heading 4811 and do not exceed 15cm in width (15cm equals approximately 5.9”), then this rule is met. The smaller rolls being imported into the United States therefore qualify for NAFTA preferential treatment. With regard to country of origin for marking of the paper rolls, 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. Pursuant to 19 CFR Section 134.1(b), the country of origin is the country of manufacture, production or growth of any article of foreign origin entering the U.S. However, as the panels are manufactured in a NAFTA country, the NAFTA Rules of Origin (set forth in 19 CFR Part 102) will officially determine the country of origin for marking purposes. Like the rule in Note 12 to the HTSUS, 19 CFR 102.20, provides that, for goods of heading 4811, HTSUS, the manufacturing in a NAFTA country must result in “a change to paper or paperboard in strips or rolls of a width not exceeding 15 cm of heading 4811 from strips or rolls of a width exceeding 15 cm of heading 4811 or any other heading, except from heading 4817 through 4823.” Because the manufacturing in Canada meets the terms of the regulation, the country of origin of the thermal paper rolls, for both duty and marking purposes, is Canada. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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 the World Wide Web at https://hts.usitc.gov/current. 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 Laurel Duvall at laurel.duvall@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division