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 > 1997 HQ Rulings > HQ 560129 - HQ 560322 > HQ 560140

Previous Ruling Next Ruling
HQ 560140





February 21, 1997

MAR-2-05 RR:TC:SM 560140 DEC

CATEGORY: MARKING

Jack Globus
Unique Sandpapers, Incorporated
2440 Sigouin
Drummondville, Quebec J2C 5Z4

RE: Country of origin marking; sanding disks; 19 CFR 102.11; 19 CFR 102.18;
NAFTA; Article 509; essential character

Dear Mr. Globus:

This is in response to your letter of October 15, 1996, in which you seek a ruling with respect to the country of origin marking required for certain sandpaper products pursuant to the North American Free Trade Agreement (NAFTA) Marking Rules.

FACTS:

In addition to your written submission, you included numerous samples and a videotape which was very helpful in understanding the processes that are required in the production of the various sandpaper products. In the videotape, you indicate that jumbo rolls of sandpaper are imported from Japan into Canada where they are cut into rolls of various widths. Brushed nylon webbing which you state is made in Canada is slit into various widths and laminated to the rolls of cut sandpaper using a resin adhesive of U.S. origin. The machine which laminates the sandpaper and the brushed nylon webbing together is also equipped to print the grit size and the name of the product on the back of the finished sheets of sandpaper. The laminated sheets are then cut to a specified length. Disks, or other shapes, of sandpaper are then cut out of these sheets and packaged.

ISSUE:

What are the country of origin marking requirements applicable to the disks, or other shapes, of sandpaper that are processed in the manner described above?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the United States 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 United States the English name of the country of origin of the article. The Customs Regulations implement the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Part 134 of the Customs Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), mandates that the ultimate purchaser in the United States must be able to find the marking easily and read it without strain.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the NAFTA, as implemented by section 207 of the NAFTA Implementation Act and the interim amendments to the Customs Regulations. 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 Part 102, Customs Regulations (19 CFR Part 102).

Applying the NAFTA Marking Rules to the production of the sanding disks as described above, we must analyze each of the production processes that occur in Canada. In Canada, the rolls of sandpaper of various sizes from Japan are slit into narrower width-rolls. You indicated that brushed nylon webbing which you state is made in Canada will be slit into various widths and laminated to the rolls of cut sandpaper using a resin adhesive of U.S. origin. The machine which laminates the sandpaper and the brushed nylon webbing together is also equipped to print the grit size and the name of the product on the back of the finished sheets of sandpaper. The laminated sheets are then cut to a specified length. Disks of sandpaper are then cut out of these sheets and packaged.

Section 102.11, Customs Regulations (19 CFR 102.11), sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) of the regulations states that

[t]he 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 requirements of these rules are satisfied.

"Foreign Material" is defined in section 102.1(e) 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."

Section 102.11(a)(1) and section 102.11(a)(2) do not apply to the facts presented in this case because the finished sandpaper product is neither wholly obtained or produced in Canada nor is it produced exclusively from domestic (Canadian) materials. In fact, the finished sandpaper product is produced from materials from Japan (the sandpaper), and the United States (the adhesive) as well as Canada (the nylon brushed webbing). Since an analysis of sections 102.11(a)(1) and 102.11(a)(2) will not yield a country of origin determination, we look to section 102.11(a)(3). Section 102.11(a)(3) provides that the country of origin is the country in which "[e]ach foreign material incorporated in that good undergoes an applicable change in tariff classification in 102.20. . .."

The brushed nylon webbing, an article of heading 6002, Harmonized Tariff Schedule of the United States (HTSUS), is of Canadian origin and is not considered a foreign material for purposes of applying the section 102.11(a)(3) rule. The resin adhesive before it is incorporated as a laminating agent in the sandpaper is an article of Chapter 39, HTSUS. The sandpaper that is produced in Japan and sent to Canada for processing is classified under heading 6805. The finished sandpaper product is also classified under heading 6805, HTSUS. The applicable tariff shift rule found in section 102.20(m) provides as follows:

HTSUS Tariff Shift and/or other requirements

6801-6811 ........... A change to heading 6801 through 6809 from any other heading, including another heading within that group.

Since the sandpaper imported from Japan which is classified in the same heading as the finished sandpaper, 6805, does not meet the applicable change in tariff classification as a result of the processing that occurs in Canada, the country of origin of the finished sandpaper product cannot be determined pursuant to 19 CFR 102.11(a)(3).

Since a country of origin determination cannot be made applying section 102.11(a), the analysis continues with section 102.11(b) which instructs us to examine the article's essential character to determine its country of origin. Section 102.11(b) provides that where the country of origin cannot be determined under section 102.11(a),
and the good is not specifically designated as a set pursuant to the Harmonized System nor classified as a set under General Rule of Interpretation 3, the country of origin of the article is "the country or countries of origin of the single material that imparts the essential character of the good. . .."

In regard to determining the "essential character" of the finished sandpaper disks, section 102.18(b)(1) of the regulations provides as follows:

(1) For purposes of identifying the material that imparts the essential character to a good under ? 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the ? 102.20 specific rule or other requirements applicable to the good. For purposes of this paragraph (b)(1): . . .
(iii) If there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed under the ? 102.20 specific rule or other requirements applicable to the good, then that material will represent the single material that imparts the essential character to the good under ? 102.11.

In this case, the only material that does not undergo the applicable tariff shift is the sandpaper. Therefore, the Japanese-origin sandpaper is the material that imparts the essential character of the good. The country of origin of the finished sandpaper product is Japan. The finished sandpaper products or their retail packages must be marked with Japan as the country of origin.

HOLDING:

The sandpaper products are a product of Japan. Accordingly, country of origin marking for the ultimate purchaser is required to indicate Japan as the country of origin of the finished sandpaper products.

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.

Sincerely,

John Durant
Director
Tariff Classification Appeals

Previous Ruling Next Ruling