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NY J87501




November 20, 2003
CLA-2-35:RR:NC:SP:236 J87501

CATEGORY: CLASSIFICATION

TARIFF NO.: 3504.00.5000

Ms. Cheryl Ellsworth
Harris Ellsworth & Levin
The Watergate, 2600 Virginia Avenue, N.W., Suite 1113 Washington , D.C. 20037-1905

RE: The tariff classification and marking under the North American Free Trade Agreement (NAFTA), of edible collagen sausage casings of United States origin that are steamed, pleated, cut and packed in Canada, and exported to the US; Article 509

Dear Ms. Ellsworth:

In your letter dated July 15, 2003 you requested a ruling on the status of collagen sausage casings from the United States and Canada under the NAFTA.

The merchandise is comprised of edible collagen sausage casings. United States bovine hides are the source of the collagen. In the United States the hides are washed, treated and ground into small particles. The particles are mixed with solution to form a collagen gel and a coloring agent may be added. The gel is extruded into a coagulation chamber that results in a continuous tube of extruded collagen. The collagen is then washed in a series of baths, dried in a tunnel and spooled onto large reels. The reels of extruded collagen are covered in plastic bags, placed in corrugated cases and exported to Canada.

In Canada the extruded collagen is unreeled, inflated and passed through a moisture chamber to make the casing more pliable. The collagen is passed through a set of rollers where it is pleated or compressed into shorter segments and then is cut. A thin film of U.S. food grade oil is applied to ease the rollers and the pleating process. The 11-inch strands are easily handled as collagen sausage casing. Forty to sixty strands are packaged into fluted cardboard boxes and are hermetically sealed.

The applicable tariff provision for the edible collagen sausage casings will be 3504.00.5000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for other protein substances and their derivatives, not elsewhere specified or included; hide powder: other. The general rate of duty will be 4 percent ad valorem.

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..

You state that the imported collagen sausage casings are processed in a NAFTA country "Canada" prior to being imported into the U.S. Since "Canada" is defined under 19 CFR 134.1(g), as a NAFTA country, we must first apply the NAFTA Marking Rules in order to determine whether the imported collagen sausage casings are a "good of a NAFTA country", and thus subject to the NAFTA marking requirements.

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.

Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, we find that the imported collagen sausage casings are a good of the United States for marking purposes. These rules of origin do not govern whether you may mark the good “Made in USA.” This specific marking is not within the authority of the CBP, and the standards are different. We suggest that you refer your request to:

Federal Trade Commission
Division of Enforcement
6th and Pennsylvania Avenue, NW
Washington, DC 20580

The North American Free trade Act § 102.19 (NAFTA preference override) states (b) If, under any other provision of this part, the country of origin of a good which is originating within the meaning of § 181.1(q) of this chapter 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.

Since the Nafta Preference Override in CR 102.19(b) has to be considered, we note that the collagen sausage casings are not entitled to Nafta Preference since they fail to meet the tariff shift in HTS General Note 12-t/35.4.

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, Bureau of Customs and Border Protection, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

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 Debra Wholey at 646-733-3034.

Sincerely,

Robert B. Swierupski
Director,

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