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 NY Rulings > NY B86845 - NY B86900 > NY B86882

Previous Ruling Next Ruling
NY B86882





July 10, 1997

MAR-2 RR:NC:1:B86882 KC

CATEGORY: COUNTRY OF ORIGIN

Mr. Dan Beauregard
A.N. Deringer, Inc.
P.O. Box 284
Highgate Springs, VT 05460

RE: Country of Origin of A325 Type 1 Structural Bolts, NAFTA.

Dear Mr. Beauregard:

This is in response to your letter dated June 20, 1997, requesting a ruling on behalf of your client, Vermont Fasteners Mfg. You requested a country of origin ruling for A325 type 1 structural bolts which you state are cold forged in the United States (U.S.) from U.S. medium carbon steel which was sent to Canada for annealing and cleaning prior to the forging process. The bolts are then sent to Canada where they are galvanized and returned to the U.S. A sample was not submitted with your letter for review.

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 appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.

Section 134.1(b) of the regulations, defines "country of origin" as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

Section 134.1(j) of the 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) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

In order to determine the country of origin marking requirements, first, we must apply the NAFTA Marking Rules in order to determine whether the A325 type 1 structural bolt "is a good of a NAFTA country". Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes. Based on the information provided, neither 19 C.F.R. ?102.11(a)(1) or 102.11(a)(2) may be used to determine the origin of the finished articles and analysis must continue to 19 C.F.R. ?102.11(a)(3). Pursuant to 19 C.F.R. ?102.11(a)(3), the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 C.F.R. ?102.20, and satisfies any other applicable requirements of that section. In this case, because the galvanized bolts imported into the U.S. from Canada are classified under subheading 7318.15.20, Harmonized Tariff Schedule of the United Sates (HTSUS), the change in tariff classification must be made in accordance with section 102.20(n), Section XV: Chapters 72 through 83, heading 7317-7318, HTSUS, which requires "A change to heading 7317 through 7318 from any other heading, including another heading within that group."

In the case before us, the bolts which are exported to Canada for galvanization are initially classified under heading 7318, HTSUS, and remain classified under heading 7318, HTSUS, subsequent to the galvanization process in Canada. Thus there is no applicable change in tariff classification within the requirements of section 102.20, and country of origin of the good may not be determined in accordance with his provision.

Because 19 C.F.R. ?102.11(a) (incorporating section 102.20), is not determinative of origin, the next step is section 102.11(b), Customs Regulations, which states, in part:

Except for a good that is specifically described in the Harmonized Tariff Schedule 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) of this section:

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

In the instant case, the imported galvanized bolt is composed of a U.S. origin bolt which has undergone additional processing in the form of galvanization.

When determining the essential character of a good under section 102.11, Customs regulations, section 102.18 is consulted. The finished A325 structural bolt consists of only one material, and because that material is classifiable in a tariff provision from which a change in tariff classification is not allowed under the applicable rule in 19 C.F.R. ?102.20(n), the U.S. origin structural bolt is the single material which imparts the essential character to the finished good pursuant to section 102.18(b)(iii). Accordingly, the country of origin of the finished galvanized A325 type 1 structural bolt is the U.S. Inasmuch as marking requirements of 19 U.S.C. 1304 are applicable only to articles of "foreign origin," the galvanized A325 type 1 structural bolts, referenced here, need not be marked upon entry into the U.S. However, you should be aware that even though Customs has determined that the structural bolt was a product of the U.S., the determination of whether a good may be marked "Made in USA" is under the primary jurisdiction of the Federal Trade Commission and not this service. We therefore recommend that you contact the Federal Trade Commission, Division of Enforcement, located at 6th and Pennsylvania Avenue, N.W., Washington, DC 20580, for any views concerning marking a product which is of U.S. origin.

By operation of General Note 12, HTSUS, the eligibility of a particular article for NAFTA duty preference is predicated, in part, upon an origin determination under the NAFTA Marking Rules of either Canada or Mexico. As demonstrated by the foregoing analysis, in the case before us, application of the NAFTA Marking Rules contained in 19 C.F.R. ?102.11 did not yield an origin determination of either Canada or Mexico, but the United States.

However, the NAFTA Preference Override set forth in 19 C.F.R. ?102.19 is applicable to the subject merchandise. Specifically, 19 C.F.R. ?102.19(b) states:

(b) If, under any provision of this part, the country of origin of a good which is originating ..... is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.

Based on the facts presented, the galvanized bolts at issue are an originating good under NAFTA and have been determined under section 102.11(b) to be a good of U.S. origin. Since the articles were returned to the U.S. after having been advanced in value or improved in condition in Canada by virtue of galvanizing, the country of origin of the structural bolts for Customs duty purposes is Canada, pursuant to 19 C.F.R. ?102.19(b). Accordingly, the "CA" NAFTA rate will be applicable to the A325 type 1 structural bolts.

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

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 Kathy Campanelli at 212-466-5492.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1301 Constitution Ave., NW, Franklin Court, Washington, DC 20229.

Sincerely,

Robert B. Swierupski
Chief, Metals & Machinery Branch

Previous Ruling Next Ruling

See also: