NY R03329 - COUNTRY OF ORIGIN MARKING OF U.S.-MADE PAPER CONVERTED IN CANADA; ARTICLE 509 - United States International Trade Commision Rulings

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NY R03329

March 13, 2006

MAR-2 RR:NC:SP:234 R03329

CATEGORY: MARKING

Mr. Robert T. Chicoine
Senior Advisor, Customs & International Trade Domtar Inc.
395 de Maisonneuve Blvd. West
Montreal, Quebec
Canada H3A 1L6

RE: COUNTRY OF ORIGIN MARKING OF U.S.-MADE PAPER CONVERTED IN CANADA; ARTICLE 509

Dear Mr. Chicoine:

This is in response to your letter dated February 17, 2006, requesting a NAFTA ruling on the applicable country of origin, for marking purposes, of certain paper sheets imported from Canada after being cut to size there from U.S.-manufactured master rolls.

You outline a scenario in which large rolls of uncoated paper, known as “Domtar Plainfield Opaque,” will be manufactured in a mill located in Baileyville, Maine, U.S.A. The large rolls will then be shipped to facilities in Canada (either your Windsor Paper Mill in Quebec or your Ottawa Converting Center in Ottawa, Ontario), where they will be cut into rectangular sheets (8½” x 11”, 11” x 14”, etc.) and packaged for sale to customers. The packaged sheets will at that time be considered finished products. The majority of the packages will subsequently be shipped to your customers in the United States, thus causing such finished goods to be imported into the U.S.

For the purpose of facilitating our NAFTA origin analysis and determination, you have advised that the paper in question is of a kind used for writing, printing or other graphic purposes, and is classifiable, both before and after conversion, within heading 4802 of the Harmonized Tariff Schedule of the United States (HTSUS). (You note that in some cases, depending on the basis weight of the paper, conversion from roll to sheet will result in a change in the applicable 6-digit subheading, but that the 4-digit heading, 4802, will always remain the same.) This information is presumed correct for the purposes of the present ruling.

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 134.45(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. 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.

In this case, you state that a semi-finished U.S. product is exported to a NAFTA country where it is finished prior to being re-imported into the U.S.

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 the country of origin for marking purposes.

Section 102.11(a) of the regulations states that 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 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."

Section 102.11(a)(1) and section 102.11(a)(2) do not apply to the paper sheets imported into the U.S. from Canada because the sheets will not be wholly obtained or produced in a single country nor will they be produced exclusively from domestic materials. Since an analysis of sections 102.11(a)(1) and 102.11(a)(2) will not yield a country of origin determination, we look to section 102.11(a)(3). Section 102.11(a)(3) provides that the country of origin 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. . .."

The finished, packaged paper sheets are classified in heading 4802, HTSUS. The applicable tariff shift rule found in section 102.20(j) provides as follows:

HTSUS Tariff Shift and/or other requirements 4801 - 4807 ........... A change to heading 4801 through 4807 from any other heading, including another heading within that group.

Since the master rolls of paper as well as the cut-to-size, packaged paper sheets are classified under the same heading, the required change in tariff classification does not occur for purposes of reaching an origin determination under section 102.11(a)(3). Section 102.11(b) provides that where the country of origin cannot be determined under section 102.11(a), and the good is not specifically designated as a set pursuant to the Harmonized System nor classified as a set under General Rule of Interpretation 3, the country of origin of the article is "the country or countries of origin of the single material that imparts the essential character of the good. . .."

In regard to determining the "essential character" of the cut, packaged paper sheets when they are imported into the U.S., section 102.18(b) of the regulations provides as follows:

(1) For purposes of identifying the material that imparts the essential character to a good under section 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 section102.20 specific rule or other requirements applicable to the good. For purposes of this paragraph (b)(1): . . .

(iii) If there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed under the section 102.20 specific rule or other requirements applicable to the good, then that material will represent the single material that imparts the essential character to the good under section 102.11.

In this case, the only material that does not undergo the applicable tariff shift is the master rolls of paper. Therefore, the U.S.-origin paper master roll is the material that imparts the essential character of the good. The country of origin of the finished, cut-to-size paper sheets is the United States. Since the packages of finished paper will be products of the U.S., they will not be subject to the country of origin marking requirements set forth in 19 U.S.C. 1304. Accordingly, no statement as to the country of origin will be required under the Customs laws.

Whether an article may be marked as "Made in the USA" is an issue under the authority of the Federal Trade Commission (FTC). You may wish to contact the FTC Division of Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 for guidance on that matter.

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 Carl Abramowitz at 646-733-3037.

Sincerely,

Robert B. Swierupski
Director,

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