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HQ 956446




February 1, 1995

CLA-2 CO:R:C:F 956446 ALS

CATEGORY: CLASSIFICATION

TARIFF NO.: 3926.90.9700

Ms. Erin Yeary
Manager, Import/Export Compliance
Daniel B. Hastings, Inc.
P. O. Box 673
Laredo, TX 78042

RE: Plastic Binding Elements for Reports

Dear Ms. Yeary:

This is in reference to your request as to the NAFTA eligibility of the subject elements. Samples were furnished.

FACTS:

The binding elements are produced in Mexico by a wholly owned subsidiary of your client which is located in the United States. The binding elements are produced from polyvinyl chloride (PVC) sheets manufactured in the United States by a third party from materials which are 98 percent or more of U.S. origin. These PVC sheets are exported from the United States in 39 inches wide master rolls in four separate gauges, 15, 20, 25 or 30 gauge, depending on the ultimate diameter of the finished book binder. In Mexico each PVC roll is mounted on a slitter/ rewinding machine. A series of slitting blades are spaced to specific widths across the web of the master roll, and the roll is slit into smaller widths, depending of the specific diameter of the binder. These smaller width rolls are referred to as reels.

Each reel is next mounted onto a blanking machine where it is stamped into a configuration called a blank which generally consists on 76 unrolled rings or tabs. Other common sizes are 80 and 84 rings. Occasionally, the blank, while still in a flat, unrolled condition, may have a decorative imprint applied to the spine before it proceeds through the remainder of the production process. The blank is then rolled on a rolling table using a combination of heat and pressure. This rolled/oval configuration is known as rolled stock.

The next process is cutting of the rolled stock into a length corresponding to the customer's needs. The most popular length is the 11 inch binding edge. The binder strips are then packaged in boxes and shipping cartons and shipped to the end user.

ISSUE:

What is the classification of the product and is it eligible for NAFTA treatment?

LAW AND ANALYSIS:

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

In order to ascertain whether the binding elements are eligible for NAFTA treatment it is first necessary to ascertain their classification. We note that the product is made of PVC, a material of heading 3904, Harmonized Tariff Schedule of the United States Annotated(HTSUSA). We further note that the product is specifically described in the provisions for other articles of plastic and articles of other material of headings 3901 to 3914. Specifically, subheading 3926.90.8700, HTSUSA, provides for flexible plastic document bindings with tabs, rolled or flat.

Such products, when made of PVC sheet material which is made entirely in the territory of one or more NAFTA countries, using materials which themselves were originating, are eligible for NAFTA treatment pursuant to General Note 12(b)(iii), HTSUSA, upon compliance with all applicable laws and regulations. Since the manufacturer/supplier of the PVC sheet material has indicated that 98.6 percent of the materials used in the manufacture of that sheet materials is of U.S. origin and that the PVC sheeting is manufactured in the United States, we have concluded that the PVC sheeting is U.S. originating material.

HOLDING:

Plastic binding elements made of PVC are classifiable in subheading 3926.90.8700, HTSUSA, and is subject to a general rate of duty of 5.3 percent ad valorem.

Binding elements fabricated in Mexico from PVC sheets which are manufactured in the United States of U.S. originating materials, are eligible for preferential treatment under NAFTA pursuant to General Note 12(b)(iii), HTSUSA. Such merchandise, produced in Mexico, is eligible for a free special rate of duty.

Sincerely,

John Durant, Director
Commercial Rulings Division

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