HQ 561919 - Country of origin marking of unfinished shotgun barrels; HRL 735257 - United States International Trade Commision Rulings

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HQ 561919

May 31, 2001

MAR-05: RR:CR:SM 561919 BLS

CATEGORY: MARKING

Daniel Cavazos, Esq.
Cacheaux, Cavazos, Newton, Martin & Cukjati, L.L.P. 1300 N. 10th Street, Suite 320
McAllen, Texas 78501

RE: Country of origin marking of unfinished shotgun barrels; HRL 735257

Dear Mr. Cavazos:

This is in reference to your letter dated October 11, 2000, on behalf of O.F. Mossberg & Sons, Inc. (“Mossberg”), concerning the country of origin marking of certain shotgun barrels imported from Mexico. We have also received e-mails from your office dated March 27 and April 3, 2001, amending the original submission due to confidentiality concerns of your client.

FACTS:

Mossberg exports lengths of U.S. origin steel rod and barrel extensions to Mexico for processing into unfinished shotgun barrels (consisting of a barrel tube and a barrel extension). Upon importation into the U.S., the shotgun barrels are shipped directly to a Mossberg facility where they are subjected to certain finishing operations, which include attachment of the sights, polishing, and applying the finish (bluing). The shotgun barrels are then assembled with U.S. origin components (i.e., stock, butt, forearm, receiver, magazine, trigger and bolt assemblies, etc.), into finished shotguns. The shotguns are tested to ensure proper functioning and precision fit, and then are partially disassembled to facilitate packaging and shipping.

Headquarters Ruling Letter (HRL) 735257

The facts in this case are similar (but not identical) to the facts in HRL 735257 dated September 16, 1994, also involving shotgun barrels imported by Mossberg. The importer has requested this ruling, as certain operations currently performed in the U.S. (as described in HRL 735257) will now be performed in Mexico.

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ISSUE:

What are the country of origin marking requirements for the imported shotgun barrels?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), requires 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 manner as to indicate to the ultimate purchaser the English name of the country of origin of the article. The regulations implementing the requirements and exceptions to 19 U.S.C. §1304 are set forth in Part 134, Customs Regulations (19 CFR 134).

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 North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (December 8, 1993) and the regulations set forth in 19 CFR Parts 102, 134.

Section 134.1(b) (19 CFR §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”; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

Section 134.1(j) provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA

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country. Section 134.1(g) 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 134.35(b), Customs Regulations (19 CFR §134.35(b)) provides that::

A good of a NAFTA country which is to be processed in the United States in a manner that would result in the good becoming a good of the United States under the NAFTA Marking Rules is excepted from marking. Unless the good is processed by the importer or on its behalf, the outermost container of the good shall be marked in accord with this part.

Part 102 of the regulations (19 CFR Part 102), sets forth the “NAFTA Marking Rules” for purposes of determining whether a good is a good of a NAFTA country. Section 102.11 (19 CFR §102.11) sets forth the required hierarchy for determining country of origin for marking purposes.

Section 102.11(a) provides 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) of the regulations 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.”

The first issue to be addressed is the country of origin of the shotgun barrels upon importation into the U.S. Since the imported articles are not wholly obtained or produced, or produced exclusively from domestic (Mexican) materials, section 102.11(a)(3) is the applicable rule, which must first be 4
applied. Under this rule, 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 set out in section 102.20. Section 102.20 of the rules sets forth the specific tariff classification changes and/or other operations which are specifically required in order for country of origin to be determined on the basis of operations performed on the foreign materials contained in a good. Thus, in order to determine whether Mexico is the country of origin under this rule, we must look at those materials whose country of origin is other than Mexico. In this case, the steel rod and barrel extensions, which are imported into Mexico for processing, are of U.S.-origin (“Foreign Material” under 19 CFR §102.11(e)).

When imported into the United States from Mexico, the unfinished shotgun barrels are classifiable under heading 9305, Harmonized Tariff Schedules of the United States (HTSUS), “Parts and accessories of articles of headings 9301 to 9304.” See HRL 735257. It appears that the U.S.-origin steel rod is classifiable under heading 7215, HTSUS, “Other bars and rods of iron or nonalloy steel.” It is our opinion that the barrel extensions are properly classifiable in heading 7304, “Tubes, pipes and hollow profiles, of cast iron.” The applicable change in tariff classification set out in section 102.20(r), Section XIX: Chapter 93, 9305 of the regulations provides:

9305.... A change to heading 9305 from any other heading.

Therefore, as the U.S.-origin steel rods and barrel extensions undergo the applicable change in tariff classification set out in section 102.20(g), the country of origin of the shotgun barrels when imported into the U.S. is Mexico. The next question to be addressed in order to determine the marking requirements for the shotgun barrels is whether the operations in the U.S. result in the imported article becoming a good of the U.S. under the NAFTA Marking Rules. See 19 CFR 134.35(b), above. Accordingly, we must again apply the rules under the section 102.11 hierarchy.

The completed shotgun is neither “wholly obtained or produced,” nor “produced exclusively from domestic (U.S.) materials.” Therefore, for purposes of determining the origin of the imported good, section 102.11(a)(3) is the applicable rule that first must be applied. As noted above, under this rule the country of origin of a good is the country in which each foreign material incorporated in the good undergoes an applicable change in tariff classification set out in section 102.20. The finished shotguns are classified under heading

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9301, HTSUS, “Military weapons, other than revolvers, pistols Shotguns.” See HRL 735257. As noted above, the shotgun barrels are classifiable in heading 9305, HTSUS. The applicable change in tariff classification set out in section 102.20(r), Section XIX, Chapter 93, 9301-9304 of the regulations provides:

9301-9304 .... A change to heading 9301 through 9304 from any other heading, including a heading within that group, except from heading 9305 when that change is pursuant to General Rule of Interpretation 2(a).

In this case, we find that the Mexican origin shotgun barrels undergo the applicable change in tariff classification set out in section 102.20(r), as a result of being further processed in the U.S. The change from heading 9305 to heading 9301 is not pursuant to General Rule of Interpretation ("GRI") 2(a) because the finished shotguns are classified in heading 9301 pursuant to GRI 1.

Accordingly, pursuant to section 134.35(b), the imported shotgun barrels are excepted from marking and the outermost containers in which the barrels are imported are also excepted from marking provided Mossberg (the importer) processes the shotgun barrels in the manner described above. (We note that HRL 735257 reached a similar result under the interim regulations then in effect.)

Please be advised that if any of the imported shotgun barrels are to be sold individually and are not to be processed into finished shotguns in the manner described above, the barrels are required to be individually marked with their country of origin "Mexico".

HOLDING:

1) U.S.-origin steel rods and barrel extensions imported into Mexico for processing into shotgun barrels undergo the applicable change in tariff classification pursuant to 19 CFR 102.20. Therefore, when imported into the U.S., the shotgun barrels are products of Mexico.

2) Upon importation into the U.S., the shotgun barrels that are processed into finished shotguns undergo the applicable change in tariff classification under 19 CFR 102.20 and become goods of U.S. origin. Accordingly, pursuant to section 134.35(b) of the regulations, the imported 6
shotgun barrels are excepted from country of origin marking. Also, the outermost containers in which the barrels are imported are excepted from marking pursuant to section 134.35(b) provided Mossberg (the importer) processes the imported barrels in the manner described above.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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

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