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NY 801919




September 20, 1994

CLA-2-95:S:N:N8:225-801919

CATEGORY: CLASSIFICATION

TARIFF NO.: 9505.90.4000

Mr. J. Lacy, Esq.
The Beistle Company
1 Beistle Plaza
Shippensburg, PA 17257

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) and country of origin marking of a decorative party banner assembled in Mexico; Article 509

Dear Mr. Lacy:

This is in response to your letter dated September 6, 1994 requesting a ruling on the status and country of origin marking requirements for decorative banners imported from Mexico which are assembled from U.S. components in a NAFTA country. A sample was submitted with your letter for review.

The banners are made from United States cardstock which is cut into specific letters or figures and colored in various designs in the United States. The product will then be sent to Mexico with United States manufactured paper, string and polyethylene binding. In Mexico, the various letters and figures will be combined and attached to the paper, which has had the binder sewn on and threaded with string, to form seasonal and other banners.

The applicable tariff provision for the banners will be 9505.90.4000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Other: Confetti, paper spirals and streamers, party favors and noisemakers; parts and accessories thereof. The general rate of duty will be 4 percent ad valorem.

The banners, being made entirely in the territory of Mexico using materials which themselves were originating, will satisfy the requirements of HTSUSA General Note 12(b)(iii). The merchandise will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

The marking statute, 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 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.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the interim amendments to the Customs Regulations published as T.D. 94-4 (59 Fed. Reg. 109, January 3, 1994) with corrections (59 Fed. Reg. 5082, February 3, 1994) and T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993). These interim amendments took effect on January 1, 1994 to coincide with the effective date of the NAFTA. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in T.D. 94-4 (adding a new Part 102, Customs Regulations). The marking requirements of these goods are set forth in T.D. 94-1 (interim amendments to various provisions of Part 134, Customs Regulations).

Section 134.45(a)(2) of the interim regulations, provides that "a good of a NAFTA country may be marked with the name of the country of origin in English, French or Spanish. Section 134.1(g) of the interim regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.

In this case, you state that U.S. components are exported to a NAFTA country where they are assembled prior to being re- imported into the U.S.

The rules for determining when, for marking purposes, the country of origin of an imported good is one of the parties to "NAFTA" are set forth in Part 102, Customs Regulations.

Section 102.14 of the interim regulations, provides in pertinent part that no good, last advanced in value or improved in condition outside the United States has United States origin. If under any other provisions of Part 102 such a good is determined to be a good of the United States, that determination will be disregarded and the country of origin of the good will be the last foreign country in which the good was advanced in value or improved in condition. "Advanced in value" is defined in section 102.1(a) of the interim regulations as "an increase in the value of a good as a result of production with respect to that good, other than by means of those "minor processing" operations described in paragraphs (m)(5), (m)(6) and (m)(7) of this section". "Improved in Condition" is defined in section 102.1(i) as "the enhancement of the physical condition of a good as a result of production with respect to that good, other than by means of those "minor processing" operations described in paragraphs (m)(5), (m)(6) and (m)(7) of this section". (Minor processing operations described in paragraphs (m)(5), (m)(6) and (m)(7) include unloading, reloading or any other operation necessary to maintain the good in good condition; putting up in measured doses, packing, repacking, packaging, repackaging; testing, marking, sorting or grading).

In this case, we find that the U.S. components are advanced in value or improved in condition as a result of the assembly operation in "Mexico". Accordingly, pursuant to section 102.14 of the interim regulations, the country of origin of the imported banners is "Mexico", the last foreign country in which the good was advanced in value or improved in condition. Therefore, for purposes of the country of origin marking requirements of 19 U.S.C. 1304, the imported banners must be marked to indicate that the country of origin of the banners is "Mexico", the last foreign country in which the good was advanced in value or improved in condition. Section 134.43(e) of the interim regulations, provides in part that "where the country of origin of an article is determined in accordance with section 102.14, part 102 of this Chapter, such article, at the choice of the importer, exporter or producer of the good, may be marked, as appropriate, in a manner such as the following:

(1) Assembled in (name of foreign country) from U.S. Components;

(2) Further processed in (name of country of origin) from U.S. materials;

(3) Product of (name of foreign country) made from U.S. components; or

(4) Product of (name of foreign country).

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).

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.
This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.

Sincerely,

Jean F. Maguire
Area Director

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