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HQ 563031




June 1, 2004

CLA-02 RR:CR:SM 563031 KSH

CATEGORY: MARKING

Maggie Lindley
Maggie Lindley Designs
1115 Adams Street
Franklin, TN 37064

RE: Country of Origin Marking and NAFTA Eligibility of U.S. Canvas Prints mounted in Mexico

Dear Ms. Lindley:

This is in response to your letters dated April 2, 2004 and May 10, 2004, requesting a binding ruling on the country of origin marking of U.S. printed canvas mounted in Mexico. You provided a sample mounted print and packaging.

FACTS:

Maggie Lindley Designs produces original artwork that is screen-printed in the United States on U.S. made and cut canvases. The printed canvases, hanging wire, clear plastic bags and stickers for packaging are shipped to Mexico where each print is mounted on a wooden stretcher that allows the painting to be hung without the need for an external frame. The hanging wire and stickers are also attached in Mexico. The finished product is packed in a plastic bag to be shipped back to the United States where it is marketed and sold.

ISSUES:

Whether canvas printed in the United States and mounted in Mexico must be marked upon importation into the United States.

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 container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).

Part 134, Customs Regulations (19 C.F.R. 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 C.F.R. 134.1(b)), defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States. 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 the meaning of this part; however, for a good of a NAFTA country, the NAFTA Marking Rules determine the country of origin.

Section 134.1(j), Customs Regulations (19 C.F.R. 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 country. Section 134.1(g), Customs Regulations (19 C.F.R. 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, set forth at 19 C.F.R. Part 102.

Section 102.11(a), Customs Regulations (19 C.F.R. 102.11(a)), sets forth the required hierarchy under the NAFTA Marking Rules for determining country of origin for marking purposes. This section states that the country of origin of a good is the country in which:

The good is wholly obtained or produced;

The good is produced exclusively from domestic materials; or

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 applicable requirements of these rules are satisfied.

Section 102.1(g), Customs Regulations (19 C.F.R. 102.1 (g)), defines a good wholly obtained or produced as including “A good produced in that country exclusively from goods referred to in paragraphs (g)(1) through (g)(10) of this section or from their derivatives, at any stage of production.” Because the mounted print is printed in the United States and mounted in Mexico, the canvas prints would not qualify as “a good wholly obtained or produced” in a country. Therefore, the country of origin of the framed prints may not be determined under section 102.11(a)(1).

The next step under the hierarchy is to consider whether the country of origin may be determined according to section 102.11(a)(2). Under this section, the origin of the good may be based on the origin of the materials used to produce the good, provided the good is produced exclusively from domestic materials. Section 102.1(d), Customs Regulations (19 C.F.R. 102.1(d)), defines domestic material as “a material whose country of origin as determined under these rules is the same country as the country in which the good is produced.” Because the canvas prints are not produced exclusively from domestic materials (i.e., Mexican), the mounted canvas, the country of origin cannot be determined under section 102.11(a)(2). Analysis must continue to 19 C.F.R. 102.11(a)(3) to determine the country of origin of the canvas prints under the NAFTA Marking Rules.

At the time the canvas prints are exported from the United States, they are classifiable in 4911.99.8000, HTSUS, which provides for other printed matter, including printed pictures and photographs: other: other: other. After mounting in Mexico, the finished goods will remain classifiable in subheading 4911.99.8000, HTSUS.

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 set out in §102.20 and satisfies any other applicable requirements of that section.” Section 102.1(e), Customs Regulations (19 C.F.R. 102.1(e)) defines “Foreign material” 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 applicable rule under 19 C.F.R. 102.20(m), Customs Regulation (19 C.F.R. 102.20(m)), states:

4901 – 4911 A change to heading 4901 through 4911 from any other heading, including another heading within that group.

In the case before us, the canvas prints, which are initially classified under heading 4911, HTSUS, remain classified under heading 4911, HTSUS, after mounting in Mexico. Thus, there is no applicable change in tariff classification within the requirements of section 102.20, and the country of origin of the good may not be determined in accordance with this provision.

Because the country of origin cannot be determined under 19 C.F.R. 102.11(a) (incorporating section 102.20), the next step is section 102.11(b), Customs Regulations (19 C.F.R. 102.11(b)), which states, in part:

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 origin cannot be determined under paragraph (a), of this section:

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 . . .

In this case, the imported mounted print is composed of a canvas print of U.S. origin that has been mounted in Mexico. When determining the essential character of a good under section 102.11(b), section 102.18(b)(1), Customs Regulations (19 C.F.R. 102.18(b)(1)), provides that:

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.

The canvas print consists of the canvas print, wood stretchers and hanging hardware. The canvas print is the only material that 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(m). Therefore, the canvas print from the U.S. is the single material that imparts the essential character of the finished good pursuant to section 102.18(b)(1), Customs Regulations (19 C.F.R. 102.18(b)(1)). Accordingly, for country of origin marking purposes, the country of origin of the lithographs after mounting in Mexico is the United States. In general, articles of United States origin are not subject to the requirements of 19 U.S.C. 1304. The Federal Trade Commission (FTC) has jurisdiction concerning the marking of American made articles. Any inquiries on that subject should be directed to the FTC. The address is Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508.

HOLDING:

Pursuant to section 102.11(b)(1) of the Customs Regulations, the country of origin of the canvas prints that are printed in the United States and mounted in Mexico is the United States for country of origin marking purposes.

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,

Myles B. Harmon, Director
Commercial Rulings Division

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