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 > 1995 HQ Rulings > HQ 558836 - HQ 558982 > HQ 558978

Previous Ruling Next Ruling
HQ 558978




April 28, 1995

CLA-2 R:C:S 558978 MLR

CATEGORY: MARKING

Joe P. Lacy, Esq.
The Beistle Company
1 Beistle Plaza
Shippensburg, PA 17257

RE: Country of origin marking requirements for decorative party goods; NAFTA; Article 509; 19 CFR 102.14, interim regulations; assembly; U.S. cardstock

Dear Mr. Lacy:

This is in reference to your letter of December 6, 1994, to the U.S. Customs Service in New York, requesting a ruling concerning the country of origin marking requirements for certain decorative party goods.

FACTS:

On September 6, 1994, your company requested a ruling from Customs in New York concerning the eligibility for preferential duty treatment under the North American Free Trade Agreement (NAFTA) and the country of origin marking requirements for certain decorative party goods. New York Ruling Letters (NYRL) 801916, 801917, 801918, and 801919 were issued to you.

Each of these rulings determined that the decorative party goods were classified under subheading 9505.90.40, Harmonized Tariff Schedule of the United States (HTSUS). Each of the goods were assembled in Mexico from U.S. components: U.S.-origin cardstock cut into specific letters or figures, U.S.-origin metal eyelets, and US.-origin string or polyethylene binding. Each of the rulings held that the party goods were eligible for preferential duty treatment under NAFTA, pursuant to General Note 12(b)(iii), HTSUS. Furthermore, each of the rulings stated that pursuant to 19 CFR 102.14, interim regulations, the country of origin of the party goods was Mexico, and pursuant to 19 CFR 134.43(e), interim regulations, the goods should be marked:

(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)

You question whether the party goods must be marked in one of the four options listed above, or whether the goods may simply be marked "Mexico" or, if not, "Assembled in Mexico" because of spatial limitations on some of the goods at issue.

Customs in New York has informed us that the cardstock cut into specific letters or figures and exported to Mexico for assembly are considered parts, and are also classifiable under subheading 9505.90.40, HTSUS; the U.S.-origin metal eyelets, glue, string or binding are not classifiable in Chapter 95, HTSUS.

ISSUE:

Whether the decorative party goods may simply be marked "Mexico" or, if not, "Assembled in Mexico."

LAW AND ANALYSIS:

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 to 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.

Section 134.1(b), interim regulations, defines "country of origin" as:

The country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of this part; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j), interim regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g), interim regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico, or the U.S. as determined under the NAFTA Marking Rules set out at 19 CFR Part 102, interim regulations.

Section 102.11, interim regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of NAFTA country for marking purposes. Section 102.11, interim regulations, sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a), interim regulations, states that the country of origin of a good is the country in which:

(1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.

"Foreign material" is defined in section 102.1(e), interim regulations, as "a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced."

Since the party goods are produced in the U.S. and Mexico, these goods are neither wholly obtained or produced, nor produced exclusively from domestic materials. Therefore paragraphs (a)(1) and (a)(2) of section 102.11 cannot be used to determine the country of origin of the party goods. Accordingly, paragraph (a)(3) of section 102.11 is the applicable rule that next must be applied to determine the origin of the finished goods.

The party goods are classified under subheading 9505.90.40, HTSUS. The cardstock is classified in the same subheading. Only the metal eyelets, glue, string or binding are not classified in Chapter 95, HTSUS. The applicable change in tariff classification set out in section 102.20(t), Section XX, Chapters 94 through 96, 9504.10-9506.29 of the interim regulations provides:

9504.10-9506.29 ... A change to subheading 9504.10 through 9506.29 from any other subheading, including within that group.

In this case, since the cardstock is classified under subheading 9505.90.40, HTSUS, both before and after the assembly operations are performed in Mexico, it will not undergo the applicable change in tariff classification set out in section 102.20(t), and, as a result, section 102.11(b) of the hierarchial rules must be applied next to determine the country of origin of the party goods.

Section 102.11(b), interim regulations, provides that:

Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a), the country of origin of the good:

(1) Is the country or countries of origin of the single material that imparts the essential character of the good, or

(2) If the material that imparts the essential character of the good is fungible, has been commingled, and direct physical identification of the origin of the commingled material is not practical, the country or countries of origin may be determined on the basis of an inventory management method provided under the Appendix to part 181 of the Customs Regulations.

Applying section 102.11(b)(1) to the facts of this case, we find that the single material that imparts the essential character of the party goods is the cardstock from the U.S., already cut into specific letters or figures. Therefore, pursuant to section 102.11(b)(1), the country of origin of the decorative party goods for marking purposes is the U.S. However, section 102.14, interim regulations, provides that:

No good, last advance in value or improved in condition outside the United States has United States origin. If
under any other provision of this part 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. (Emphasis added).

In this case, 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, interim regulations, the country of origin of the imported decorative party goods is "Mexico," the last foreign country in which the good was advanced in value or improved in condition. Section 134.43(e), interim regulations, provides that:

Where the country of origin of an article is determined in accordance with section 102.14 ... at the choice of the importer, 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).

You question whether you may simply affix the marking "Mexico" or "Assembled in Mexico" to your goods instead of one of the four options listed above. Customs has consistently held that the name of the country of origin alone, is similar in meaning to "Made in (name of country of origin)" and "Product of (name of country of origin)." Customs, however, has also held that the phrase "Assembled in (name of country of origin)" alone is generally not a sufficient country of origin indicator for purposes of 19 U.S.C. 1304, except in limited circumstances. See Headquarters Ruling Letter 735251 dated October 7, 1993. Accordingly, either "Mexico," "Made in Mexico," or "Product of Mexico" would be appropriate markings on the imported decorative party goods. However, "Assembled in Mexico" is not an appropriate country of origin marking.

For your information, Customs is currently proposing to remove section 102.14, interim regulations, and, as a result section 134.43(e). Please note that if these sections are removed, the country of origin of the decorative party goods would be the U.S. for purposes of the country of origin marking requirements of 19 U.S.C. 1304, and, therefore, the imported decorative party goods would not be required to be marked for purposes of the U.S. Customs Service. However, please be aware that the use of the marking "Made in U.S.A." is within the jurisdiction of the Federal Trade Commission, Division of Enforcement, located at 6th & Pennsylvania Avenue, N.W., Washington, D.C. 20508.

HOLDING:

Based upon the information provided, pursuant to section 102.11(b)(1) and 102.14, interim regulations, the country of origin of the decorative party goods is Mexico. Marking the goods either "Mexico," "Made in Mexico," or "Product of Mexico" would be acceptable.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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,

John Durant, Director

Previous Ruling Next Ruling

See also: