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 > 1993 HQ Rulings > HQ 0952472 - HQ 0952547 > HQ 0952547

Previous Ruling Next Ruling


HQ 952547


January 7, 1993

CLA-2 CO:R:C:F 952547 LPF

CATEGORY: CLASSIFICATION

TARIFF NO.: 3921.90.40

Mr. Timothy F. Szczesiul
Purchasing Agent
Scharr Industries, Inc.
40 East Newberry Road
Bloomfield, CT 06002

RE: Metallized polyester film; Heading 3921, HTSUSA; Other plates, sheets, film, foil and strip, of plastics; Tariff preferences under CFTA; General Notes 3(c)(vii)(B) and

Dear Mr. Szczesiul:

This is in response to your letter dated August 31, 1992, requesting the proper classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), and eligibility under the United States - Canada Free Trade Agreement (CFTA), of metallized polyester film imported from Canada. You submitted samples with your request for a binding ruling.

FACTS:

Polyester film, produced in Korea, Japan, Thailand, or the Republic of China, is shipped to Canada where it is metallized. The metallization enhances the film's appearance and improves its heat and water resistance, making the film especially suitable for food packaging. You state that the cost of processing the film in Canada accounts for at least 50 percent of the value of the goods when exported to the territory of the U.S.

ISSUE:

Whether the metallized polyester film is classifiable in heading 3920 as other film, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials or in 3921 as other film, of plastics; and whether it is considered a "good originating in Canada" for purposes of the United States - Canada Free Trade Agreement (CFTA) and, thus, is eligible for preferential tariff treatment.

LAW AND ANALYSIS:

Tariff Classification

The General Rules of Interpretation (GRI's) taken in their appropriate order provide a framework for classification of merchandise under the HTSUSA. Most imported goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative section or chapter notes. The Explanatory Notes (EN's) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI's.

Heading 3920 provides for other film, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials, while 3921 provides for other film, of plastics. Because the polyester film is metallized before entry into the U.S., it is "combined with other materials" and is not classifiable in 3920, but rather in 3921. As the film is noncellular, the appropriate subheading is 3921.90.40.

United States - Canada Free Trade Agreement

Articles which are imported from Canada may be entitled to certain tariff preferences under the United States - Canada Free Trade Agreement (CFTA) if the articles are "originating goods" as defined by General Note 3(c)(vii)(B), HTSUSA. There are two primary means in General Note 3(c)(vii)(B) by which articles imported into the United States may be "goods originating in the territory of Canada." General Note 3(c)(vii)(B)(1) provides for goods "wholly obtained or produced in the territory of Canada and/or United States." General Note 3(c)(vii)(B)(2) provides for goods "transformed in the territory of Canada and/or the United States."

Pursuant to General Note 3(c)(vii)(B)(2), a transformation occurs when a change in tariff classification occurs that is authorized by General Note 3(c)(vii)(R). General Note 3(c)(vii)(R)(7)(aa) provides that a transformation is evident for Chapter 39, HTSUSA, when:

[a] change to any heading of chapter 39 from any other heading, including another heading within that chapter [occurs]; provided, that the value of materials originating in the territory of Canada and/or the United States plus the direct cost of processing performed in the territory of Canada and/ or the United States constitute not less than 50 percent of the value of the goods when exported to the territory of the United States.

In this instance, the non-metallized, polyester film is classifiable within heading 3920, when entering Canada. Upon entry into the U.S., the film, now metallized, is classifiable within heading 3921. A change in tariff classification occurs. Because the film is transformed in Canada, it qualifies as a "good originating in the territory of Canada," provided it also meets the 50 percent value requirement, as referred to in General

HOLDING:

The metallized polyester film is an originating good under General Note 3(c)(vii)(B)(2) and is entitled to the tariff preferences under the CFTA, provided it meets the 50 percent value requirement under General Note 3(c)(vii)(R)(7)(aa). As the article is classifiable in subheading 3921.90.40, HTSUSA, as "Other plates, sheets, film, foil and strip, of plastics: Other: Other: Flexible," the special column one rate of duty for products of Canada is 2.5 percent ad valorem.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling

See also: