HQ 561948 - Country of Origin Marking of Certain Barite - United States International Trade Commision Rulings

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HQ 561948

December 28, 2001

MAR-2-05 RR:IA 561948 RFC

CATEGORY: MARKING

Mr. Stefan Michalewicz
Highwood Resources Ltd.
734-7th Ave., S.W.
Calgary, Alberta
Canada T2P 3P8

RE: Country of Origin Marking of Certain Barite

Dear Mr. Michalewicz:

This is in reference to your request for a reconsideration of administrative classification ruling NY G81537 (September 13, 2000). This ruling was originally requested by Livingston International, Inc. on behalf of Highwood Resources, Ltd. It concerns the country of origin marking requirements for a good that is imported into Canada from China where it is processed and then exported to the United States.

FACTS:

Barite originating in China is imported into Canada where it is ground and pulverized. The original barite from China is classified in subheading 2511.10 of the Harmonized System and the Harmonized Tariff Schedule of the United States (HTSUS) when imported into Canada. After the barite is ground and pulverized in Canada and exported to the United States, it remains classified in subheading 2511.10 of the Harmonized System and the HTSUS (i.e., the processing that occurs in Canada does not cause the barite to change classification).

ISSUE:

What is the country of origin for marking purposes of barite imported into Canada from China, processed in Canada and then exported to the United States that does not undergo a change in tariff classification as a result of the processing that occurs in Canada?

LAW AND ANALYSIS:

The U.S. law relating to country of origin marking for imported merchandise (“the marking statute”) is found in section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304). This law provides that, unless excepted, every article of foreign origin (or its container) 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. See 19 U.S.C. § 1304(a). Products made in the United States do not have to be marked with their country of origin under this statute.

The purpose of the marking statute is to allow the ultimate purchaser of the goods to know, by simple inspection, specifically where they were made in case such knowledge might influence his or her decision to purchase the goods (i.e., to permit the ultimate purchaser in the United States to choose between domestic and foreign-made products, or between the products of different foreign countries). See generally, United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, at 302 (1940).

The “ultimate purchaser” is defined in Part 134 of the Customs Regulations as:

[G]enerally the last person in the United States who will receive the article in the form in which it was imported; however, for a good of a NAFTA country, the “ultimate purchaser”' is the last person in the United States who purchases the good in the form in which it was imported.

19 CFR § 134.1(d)

Annex 311 to the North American Free Trade Agreement requires the parties to the agreement to establish rules for determining whether a good is a good of a party for country of origin marking purposes. See Annex 311, North American Free Trade Agreement, December 17, 1992, Can-Mex-U.S., 32 I.L.M. 289 (1993). The North American Free Trade Agreement was implemented into U.S. law through the North America Free Trade Agreement Implementation Act. Pub. L. 103-182, 107 Stat. 2057 (December 8, 1993). For the United States, the rules discussed in Annex 311 can be found in part 102 of the Customs Regulations. See 19 CFR § 102. They are known as the “NAFTA Marking Rules.” As indicated above, these rules are to be used for “determining whether a good is a good of a NAFTA country.” See 19 CFR § 134.1(j). A good of a NAFTA country is an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. See 19 CFR § 134.1(g). The NAFTA Marking Rules are the rules to be used to determine the country of origin for marking purposes for goods imported into the United States from Canada or Mexico. See generally, Bestfoods v. United States, 165 F.3d 1371 (Fed. Cir. 1999).

Section 102.11 to the Customs Regulations provides, in pertinent part, as follows:

The following rules shall apply for purposes of determining the country of origin of imported goods other than textile and apparel products covered by Sec. 102.21.

(a) The 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 Sec. 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. (b) Except for a good that is specifically described in the Harmonized System 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 to the good.

19 CFR § 102.11

With respect to the above-listed rule (a)(3), the required change in tariff classification or tariff shift in section 102.20 for goods classifiable in HTSUS subheading 2511.10 is as follows:

A change to heading 2501 through 2516 from any other heading, including another heading within that group.

19 CFR § 102.20

The above-mentioned product is imported into the United States from Canada. Therefore, as indicated above, the country of origin for marking purposes must be determined by the NAFTA Marking Rules.

The origin of the instant product cannot be determined by application of the rules in section 102.11(a)(1) to (3): it is not wholly obtained or produced in a single country; it is not produced exclusively from domestic materials; and each foreign material incorporated in the good does not undergo the above-listed change in tariff classification (as the material imported into Canada from China does not undergo the above-listed change in tariff classification based on the processing that occurs in Canada, i.e., it is classified in subheading 2511.10 when imported into Canada and remains classified in that subheading when imported into the United States).

Applying the rules in the required hierarchical order, one finds that origin of the product can be determined by application of the rule set forth above in section 102.11(b)(1): The product consists of barite from China that has been ground and pulverized in Canada, and then exported to the United States. Clearly, the barite itself is the single material that imparts the essential character to the good that is imported into the United States. Therefore, under this rule, the country of origin of the product under the NAFTA Marking Rules is China.

HOLDING:

The above-mentioned product must be marked when imported into the United States as a product of China.

Administrative ruling NY G81537 is affirmed in full.

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 Service officer handling the transaction.

Sincerely,

John A. Durant, Director
Commercial Rulings Division

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