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NY 816807




December 27, 1995

CLA-2-39:RR:NC:TP 221 816807

CATEGORY: CLASSIFICATION

TARIFF NO.: 3919.90.5060

Mr. Robert D. Knechtel
Emery Customs Brokers
Peace Bridge Plaza
Suite 215
Buffalo, NY 14213

RE: The tariff classification, country of origin marking requirements, and status under the North American Free Trade Agreement (NAFTA), of a Tracker Security Kit from Canada; Article 509

Dear Mr. Knechtel:

In your letter dated November 24, 1995, on behalf of The Tracker Corporation, Canada, you requested a ruling on the status of a Tracker Security Kit from Canada under the NAFTA.

The kit consists of various items which will be used to identify recovered merchandise. The kit includes 25 pressure sensitive plastic labels, 8 cloth labels coated on both sides with visible plastics material, 5 two-piece plastic sleeves with attachment holes, 3 large split rings, 3 small split rings, a paper clip, a printed brochure, instruction sheet, activation card, registration form and return envelope, all packaged in a cardboard box. The labels are printed with bar codes which can be read with an optical scanner. The labels will be affixed to an article, and if the article is then lost or stolen, and subsequently recovered, it can be traced back to the owner. The plastic labels are pressure sensitive, and can be adhered directly to possessions such as televisions or cameras. They can also be adhered to the inner part of the plastic sleeve and then covered with the clear protective outer sleeve. These sleeves may be attached to the split rings and then attached to articles such as key rings, luggage tags, and pet collars. The paper clip is designed to be used to push a shoe lace though the sleeve, so that it may be attached to sneakers or shoes. These items are considered to constitute a set, with the essential character imparted by the printed plastic pressure sensitive labels.

The applicable tariff provision for the kit will be 3919.90.5060, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for self-adhesive plates, sheets, film, foil, tape, strip and other flat shapes, of plastics, other, other. The general rate of duty will be 5.8 percent ad valorem.

Each of the non-originating materials used to make the tracking kit has satisfied the changes in tariff classification required under the HTSUSA General Note 12(t)/3919. The kit will also be subject to a Regional Value Content (RVC) requirement of 60% under the Transaction Value Method or 50% under the Net Cost Method as required under the rule applicable to the pressure sensitive labels. Assuming the goods are eligible for preferential treatment under the NAFTA, the merchandise will be entitled to a 1.7 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. Effective January 1, 1996, the rate of duty will be 1.1 percent ad valorem. Based on the cost figures submitted with your letter, the kit meets the RVC requirement.

Subheading 9801.00.10, HTSUSA, provides for the free entry of U.S. products that are exported and returned without having been advanced in value or improved in condition by any means while abroad, provided the documentary requirements of section 10.1 Customs Regulations (19 CFR 10.1), are met. The repackaging of the U.S. labels and rings does not preclude classification in this provision.

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.

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).

These rules provide that the country of origin of a set is the country or countries of origin of all articles that merit equal consideration for determining the essential character of the good. For the instant set, those articles include the pressure sensitive plastic labels, the plastic coated cloth labels, the two-piece plastic sleeves and the metal rings.

The countries of origin of the tracking kit are the United States and China. Section 134.32(m) of the Customs Regulations [19 CFR 134.32(m)] provides that products of the United States exported and returned are excepted from country of origin marking requirements. Therefore, you need not mark the U.S. labels and metal rings. For purposes of determining country of origin, a product shall not be considered to have undergone a change in tariff classification in the territory of a NAFTA party as a result of simple packaging operations. Therefore, the plastic sleeves remain a product of China for country of origin purposes and must be marked as such.

Marking on the sleeves alone is insufficient if this set is sold in the sealed packaging box. Therefore, the box should be legibly and conspicuously marked to indicate that the plastic sleeves are made in China. Though it is not necessary to indicate the country of origin of the other components, you may wish to mark the kit with wording such as "Packaged in Canada. Labels and split rings made in the United States. Plastic sleeves made in China."

You have not indicated the country of origin of the paper clip. If the paper clip is made in China, it may be subject to anti-dumping duties. If the country of origin is China, we suggest that before importation you write for a scope determination ruling to the Office of Anti-dumping Investigations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC 20230.

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

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

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Joan Mazzola at 212-466-5580.

Sincerely,

Roger J. Silvestri
Director

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