NAFTA preference for a mop;102.11(b); tariff shift exception; unassembled good

HQ W562490 September 5, 2002 MAR-2 RR:CR:SM 562490 KSG CATEGORY: Classification William J Marston Masterpiece International, Ltd. 2300 Higgins road suite 301 Elk Grove, Illinois 60007 RE: NAFTA preference for a mop;102.11(b); tariff shift exception; unassembled good Dear Mr. Marston: This is in response to your letter of August 2, 2002, requesting a binding ruling on behalf of Freudenberg household Products L.P., regarding the eligibility of certain mops assembled in Canada for tariff preference under the North American Free Trade Agreement ("NAFTA"). FACTS: The cone mop head is imported from Germany into Canada. The plastic parts and mop handle are made in the U.S. and imported into Canada. You advise that the mop head is classified in subheading 9603.90.8050, of the Harmonized Tariff Schedule of the United States ("HTSUS"). The plastic parts are classified in subheading 3926.90.9880, HTSUS. The mop handle is classified in subheading 7323.93.0080, HTSUS, and the finished mop imported into the U.S. is classified in subheading 9603.90.8050, HTSUS. For purposes of this ruling, we are assuming the correctness of the above classifications. The assembly operation in Canada is as follows: 1) the red plastic cone and black plastic grip are slid into a metal tube; 2) a black plastic grip is riveted into the metal tube; 3) a black plastic keeper sleeve is slid into the red plastic connector at the end of the metal tube; 4) the mop head is snapped into the red plastic connector; 5) a red plastic cone is pushed up to fully envelop the mop head inside the cone; and 6)the black plastic cap is applied to the end of the handle. The mops are then packaged for exportation to the U.S. ISSUE: Whether the mops imported into the U.S. are entitled to preferential treatment under NAFTA? LAW AND ANALYSIS: General Note 12, HTSUS, incorporates Article 401 of NAFTA into the HTSUS. General Note 12(a)(i) provides, in pertinent part: (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), 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 NAFTA Implementation Act. Accordingly, the assembled mops will be eligible for the “Special” “CA” rate of duty provided they are NAFTA “originating” goods under General Note 12(b), HTSUS, and qualify to be marked as a product of Canada under the marking rules. General Note 12(b), HTSUS, provides, in pertinent part: 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. Pursuant to the tariff shift rule set forth in GN 12(t)/96.1, a qualifying tariff shift occurs if there is: A change to headings 9601 through 9605 from any other chapter In this case, the mop head made in Germany does not satisfy the tariff shift rule set forth in GN 12(t). However, GN 12(b)(iv) provides two exceptions to the tariff shift rule. GN 12(b)(iv) provides that goods may still qualify as originating in a NAFTA country if: (iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the non-originating 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 in 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. . . . The issue is whether the mop head imported into Canada from Germany falls into either of the two exceptions and is considered either a part of a mop or, as described in GRI 2(a), considered an article entered unassembled but classified as assembled. The mop head is classified in subheading 9603.90.8050, HTSUS, which is described in the tariff schedule as "Brooms, brushes (including brushes constituting parts of machines, appliances or vehicles), hand-operated mechanical floor sweepers, not motorized, mops and feather dusters; prepared knots and tufts for broom or brush making; paint pads and rollers; squeegees (other than roller squeegees):Other: Other: Other." The mop head is not classified in a provision that includes parts. The mop head is classified in the same provision as the finished mop. Therefore, the mop head is not eligible for the "parts" exception and we must determine whether the mop head is a mop entered unassembled but classified as assembled. GRI 2(a), provides that: Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished. . ., entered unassembled or disassembled. (Emphasis added) In this case, the mop head is from Germany and the other parts are of U.S.-origin. Since all the parts of the mop are not from Germany, the exception for an article entered unassembled but classified as assembled are not met. Further, since the German-origin mop head does not qualify under either of the two exceptions, the mop would not be eligible for preferential tariff treatment under the NAFTA. HOLDING: Based on the facts presented, the mops do not qualify for preferential treatment under the NAFTA. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, Myles B. Harmon Acting Director Commercial Rulings Division