HQ 0556006 - Eligibility for duty-free treatment under the CBERA and U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, of packaging materials produced in Jamaica from U.S. materials. Printing; laminating; curing; cutting; 555742; 555656 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1991 HQ Rulings > HQ 0555876 - HQ 0730949 > HQ 0556006

HQ 556006

May 16, 1991

CLA-2 CO:R:C:S 556006 KCC

CATEGORY: CLASSIFICATION

Mr. Derryck E. Cox
JAMPRO
Jamaica's Economic Development Agency
866 Second Avenue
New York, New York 10017

RE: Eligibility for duty-free treatment under the CBERA and U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, of packaging materials produced in Jamaica from U.S. materials. Printing; laminating; curing; cutting; 555742; 555656

Dear Mr. Cox:

This is in response to your letter dated April 18, 1991, requesting a ruling concerning whether packaging material produced in Jamaica will be eligible for duty-free treatment under the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2701-2706). Samples of the packaging material in roll form and in bag form were submitted for examination.

FACTS:

You are presently discussing a possible manufacturing operation with Kleartone Transparent Products Co., Inc. to produce packaging material in Jamaica. U.S.-origin raw materials, such as polyester, polypropylene, polyethylene, mylar, (all of which are synthetic man-made materials) nylon adhesives, ink, packing, and shipping supplies, will be shipped to Jamaica for manufacture into packaging material.

In Jamaica, the U.S.-origin materials will be subjected to the following operations:

1. up to six colors will be printed on rolls of the raw material;
2. the printed film and clear film will be laminated together thereby locking the printing between the two sheets; 3. the sheets will be cured until dry;
4. the sheets will be cut to designated width depending on the customer's order; and
5. the rolls will be packaged for shipment.

Upon completion of the Jamaican operations, the rolls will be imported into the U.S. In the U.S., the rolls will be placed on machines which automatically form the bag, fill it with a designated product, and seal it.

ISSUE:

Whether the packaging material will be entitled to duty-free treatment under the CBERA when imported into the U.S.

LAW AND ANALYSIS:

Under the CBERA, eligible articles the growth, product or manufacture of designated beneficiary countries (BC's) may receive duty-free treatment if such articles are imported directly to the U.S. from a BC, and if the sum of 1) the cost or value of the materials produced in a BC or BC's, plus 2) the direct cost of processing operations performed in a BC or BC's, is not less than 35% of the appraised value of the article at the time it is entered into the U.S. See, 19 U.S.C. 2703(a). The cost or value of materials produced in the U.S. may be applied toward the 35% value-content minimum in an amount not to exceed 15% of the imported article's appraised value. See, section 10.195(c), Customs Regulations (19 CFR 10.195(c)).

U.S. Note 2(b), subchapter II, Chapter 98, HTSUS ("Note 2(b)"), provides for the duty-free treatment of articles (other than textile and apparel articles and petroleum and petroleum products derived from petroleum, provided for in heading 2709 or 2710) which are assembled or processed in a CBERA BC wholly of fabricated components or ingredients (except water) of U.S. origin. This amendment was effective with respect to goods entered on or after October 1, 1990.

To qualify for duty-free treatment under this provision, the manufacture of the packaging material must take place in one of the CBERA designated BC's. Jamaica is a BC. See, General Note 3(c)(v)(A), HTSUS. Upon review of the applicable duty-free programs, Note 2(b) is clearly more relevant than the CBERA. Therefore, we will limit our discussion to Note 2(b).

We are of the opinion that the packaging material produced in Jamaica may enter the U.S. duty-free pursuant to U.S. Note 2(b). The material does not fall within one of the four categories of products which are excluded from Note 2(b) treatment (textile and apparel articles, petroleum and certain products derived from petroleum). Moreover, only U.S. origin components or ingredients are used during the foreign manufacturing operation, which involves printing, laminating, curing, and cutting. We believe that these processes are encompassed by the operations specified in Note 2(b). See, Headquarters Ruling Letter (HRL) 555742 dated November 5, 1990, and HRL 555656 dated December 24, 1990.

Enclosed is a copy of Headquarters telex 9264071 dated September 28, 1990, to Customs field offices, setting forth procedures for entry under Note 2(b).

HOLDING:

The packaging materials which are entirely manufactured from U.S.-origin materials in Jamaica may enter the U.S. duty-free pursuant to Note 2(b) provided the documentation requirements set forth in the Headquarters telex 9264071 dated September 28, 1990, are satisfied.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling