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NY 806762




March 2, 1995

CLA-2-39:S:N:N6:221 806762

CATEGORY: CLASSIFICATION

TARIFF NO.: 3926.90.9890

Ms. Naomi Makow
C/O Makow Associates Architect
362 Davenport Road, Suite #200
Toronto, Ontario, Canada, M5R 1K6

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of plastic spacing devices from Canada; Article 509.

Dear Ms. Makow:

In your letter dated January 25, 1995, you requested a ruling on the status of spacing devices from Canada under the NAFTA.

The spacing device is composed of polystyrene plastic. It will be used in laying marble, granite and ceramic tiles. The spacing device is 1 1/2 inches square and 3/8 inch in height. You state the polystyrene used to make the spacing device is manufactured in Canada or the United States.

The applicable tariff provision for the spacing device will be 3926.90.9890, Harmonized Tariff Schedule of the United States (HTS), which provides for other articles of plastics, other. The general rate of duty will be 5.3 percent ad valorem.

The information you have submitted is not sufficient for us to determine the NAFTA status of the spacing devices. Pursuant to Part 181 of the Customs Regulations (19 C.F.R. 181), a request for a ruling on the status of a product under NAFTA must provide sufficient detail to permit proper application of the relevant NAFTA provisions. In this case, we will require additional information in order to issue a ruling.

The spacing devices can qualify for NAFTA treatment under either Rule B or C. If the spacing devices are produced entirely in the territory from originating materials, then they qualify under Rule C. You state that the spacing devices are made in Canada from polystyrene made in the United States. If the polystyrene is considered an originating material, then the spacing devices would qualify for NAFTA treatment under Rule C. However, it cannot be determined from your letter if the polystyrene is an originating material. If all the materials of which the polystyrene itself is manufactured are of American, Canadian or Mexican origin, then the polystyrene is an originating material, and the spacing devices qualify for NAFTA treatment under Rule C. But if any of the materials are of foreign origin, then to be considered originating materials, those materials must undergo a tariff shift as well as a Regional Value Content (RVC) not less than 60 percent where the transaction value method is used, or 50 percent where the net cost method is used. In your case, the materials have undergone a tariff shift in forming the polystyrene. However, without a cost breakdown and a complete description of the production process we cannot determine if the RVC requirement has been met. If the RVC requirement has been met, the polystyrene would be considered an originating material, and the spacing devices would qualify as a product composed entirely of originating materials. Again, the spacing devices would qualify for NAFTA treatment under Rule C.

If the polystyrene is considered a non-originating material, the spacing devices might still qualify for NAFTA treatment under Rule B. Each of the non-originating materials used to make the spacing divider has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/39. The spacing devices, however, will also be subject to a RVC requirement of 60 percent under the Transaction Value Method or 50 percent under the Net Cost Method as required under the rule applicable to the spacing device.

Assuming the goods are eligible for preferential treatment under NAFTA, the merchandise will be entitled to a 1.5 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

This ruling is being issued under the provision of Part 181 of the Customs regulations (19 C.F.R. 181). Because of insufficient information in your ruling request, Customs has not addressed the RVC of the subject goods. If you desire a ruling
regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, the information noted in section 181.93(b) of the Customs regulations (19 CFR 181.93(b)), must be provided to Customs. The information we need includes a cost breakdown of the goods and labor so that we can determine the Regional Value Content. As provided in Section 181.94 of the Customs Regulations (19 CFR 181.94), you may submit this additional information within 30 days of the date of this notice. Please refer to our file number and address any supplemental letter to Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1301 Constitution Ave. N.W., Washington D.C. 20229.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. 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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