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HQ 951921


July 6, 1992

CLA-2 CO:R:C:F 951921 ALS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9507.90.7000

Mr. Dallas Miner
American Fishing Tackle Manufacturers Association One Thomas Circle
Suite 900
Washington, DC 20005

RE: Fishing Lures; Inquiry Pursuant to Section 1516, Title 19, United States Code

Dear Mr. Miner:

This is in reference to your request for information regarding the importation of certain fishing lures imported from Canada. We have considered your request pursuant to the provisions of section 1516, title 19, United States Code and section 175.1, et seq. of the Customs Regulations (19 CFR 175.1, et seq.).

FACTS:

The articles in question are fishing lures composed of fishing hooks manufactured in either Norway or France affixed to metal, plastic or wood artificial bait manufactured in Canada.

ISSUES:

What is the tariff classification of fishing lures produced in Canada?

Are fishing lures composed of a fishing hook manufactured outside of Canada which is combined with various types of artificial bait manufactured in Canada eligible for special tariff treatment under the United States - Canada Free Trade Agreement (CFTA)?

LAW AND ANALYSIS:

Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification is determined first in accordance with the terms of the headings and relative section and chapter notes. If GRI 1 fails to classify the goods and if the heading and legal notes do not otherwise require, the remaining GRI's are applied taken in order.

The articles under consideration are composed of two elements. One element, artificial bait, classifiable under subheading 9507.90.7000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), is manufactured in Canada. The other element, fishing hooks manufactured in Norway or France, is classifiable under subheading 9507.20.8000, HTSUSA, in their condition as imported into Canada. The hooks are imported into Canada where they are combined with the artificial bait.

Since each of the subheadings refers to only a part of the article, it is not classifiable under GRI 1. We must refer to GRI 3 which provides for the classification of composite articles. That GRI provides that composite articles are classified as if they consisted of the material or component which gives them their essential character. Since the hook could not perform its ultimate function without the lure, we believe that the lure imparts the essential character to the article and, therefore, both components would be classified as if the article consisted solely of the lure.

We next considered the eligibility of the article for treatment under the CFTA. To be eligible for tariff preferences under the CFTA, goods must be "originating goods" within the rules of origin in General Note 3(c)(vii)(B)(1) or (2), HTSUSA. Under (1) articles may be considered "goods originating in... Canada" if they are wholly obtained or produced in the territory of Canada and/or the United States or (2) if they are transformed in the territory of Canada and/or the United States.

The completed fishing lures include hooks from third countries and are not products wholly obtained or produced in Canada pursuant to (1) above. We, therefore, must consider whether the product has been transformed in the territory of Canada as provided in (2) above. In order to be so considered an article made of foreign materials must be transformed in Canada and/or the United States in accordance with General Note 3(c)(vii)(B)(2), HTSUSA. A transformation is evident when a change in tariff classification occurs as provided in General Note 3(c)(vii)(R), HTSUSA.

General Note 3(c)(vii)(R)(20), HTSUSA, covering goods provided for in Chapter 95, HTSUSA, generally provides that such a transformation occurs when there is (20)(aa) a change from one chapter to another or (20)(bb) a change to any heading from a parts heading or to any subheading from a parts subheading. The article under consideration does not meet those requirements. The fish hook, as previously noted, is classifiable under subheading 9507.20.8000, HTSUSA, and the artificial bait is classifiable under subheading 9507.90.7000, HTSUSA. The completed lure, as exported to the United States from Canada, is classifiable under subheading 9507.90.7000, HTSUSA. Since a change in classification, as specified above, does not occur, i.e., the fish hooks do not change classification from one chapter to another nor do they change classification from a parts heading or subheading, the requirements for treatment under the CFTA have not been met.

Whenever the assembly of goods in the territory of Canada fails to result in a change of tariff classification they cannot be treated as goods originating in the territory of Canada for the purposes of the CFTA. Therefore, fishing lures assembled in Canada with hooks from a third country are not eligible for reduced tariff treatment when imported into the United States.

HOLDING:

The fishing lures under consideration are not considered as goods originating in the territory of Canada for purposes of the CFTA. They are classifiable under subheading 9507.90.7000, HTSUSA, and are subject to a general rate of duty of 9 percent ad valorem.

This represents the official position of the U.S. Customs Service. If your wish to challenge this decision, you may do so by filing a petition pursuant to sections 175.11 and 12, Customs Regulations (19 CFR 175.11,12).

Sincerely,

John Durant, Director
Commercial Rulings Division

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