March 22, 2006 CBP Bulletin Notice on NAFTA Country of Origin Marking of Plastic Storage Space Bags
In the March 22, 2006 issue of the U.S. Customs and Border Protection Bulletin (CBPBulletin) (Vol. 40, No. 13), CBP issued a notice proposing to revoke a classification ruling relating to the NAFTA country of origin marking of plastic storage space bags. CBP states that it is also proposing to revoke any treatment it has previously accorded to substantially identical transactions.
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CBP states that any party who has received a contrary ruling or decision on the merchandise that is subject to the proposed ruling, or any party involved with a substantially identical transaction, should advise CBP by April 21, 2006, the date that written comments on the proposed ruling are due. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in this notice.
In addition, CBP states that this notice covers any rulings on the subject merchandise that may exist but have not been specifically identified.
Proposed Revocation of One Ruling on NAFTA Country of Origin Marking
Plastic storage space bags. At issue are zippered plastic storage bags that are exported by Illinois Tools Works (ITW) Space Bags into Mexico. In Mexico, the bags are fitted with plastic valves and then become space bags from which air can be added or removed for more compact storage. The plastic storage bags used in producing the space bags are manufactured in the U.S.; the plastic valves are manufactured in Mexico. After the plastic valves are attached, the space bags are folded, labeled, and packaged in a box with instructions, and then exported to the U.S. for sale to consumers.
CBP is proposing to issue HQ 967946 in order to revoke NY G86772, to reflect the proper NAFTA country of origin marking for the plastic storage space bags as the U.S. (which is exempt from country of origin marking requirements), rather than Mexico.
In NY G86772, CBP states it ruled that pursuant to 19 CFR 102.19 (the NAFTA Preference Override), the subject plastic space bags were required to be marked to indicate that their country of origin was Mexico. In reviewing 19 CFR 102.19(b), CBP now believes that it misapplied the regulation, as the NAFTA Preference Override only applies to country origin determinations for duty purposes.
(19 CFR 102.19(b) states that if, under any provision of [19 CFR Part 102], the country of origin of a good which is originating...is determined to be the U.S. and that good has been exported from, and returned to, the U.S. after having been advanced in value or improved in condition in another NAFTA country, the country of origin 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 U.S.)
According to CBP, there is no indication in 19 CFR 102.19(b) or elsewhere that the NAFTA Preference Override should be used to determine the county of origin for marking purposes.
CBP states that the country of origin of the space bag cannot be determined under 19 CFR 102.11(a); however, it can be determined under 19 CFR 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 Rules of Interpretation (GRI) 3, where the country of origin cannot be determined in 19 CFR 102.11(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 of the good.
(See CBP's notice for explanation of use of 19 CFR 102.18 ([NAFTA] Rules of Interpretation) for the purposes of identifying the material that imparts the essential character.)
CBP finds that the plastic storage bag (produced in the U.S.) imparts the essential character to the finished ITW space bags. As a result, the NAFTA country of origin of the storage bag should be the U.S. and thus exempted from the country of origin marking requirements of 19 CFR Part 134.
CBP notes that whether the space bags may be marked "Made in the U.S.A." is an issue under the authority of the Federal Trade Commission (FTC).
March 22, 2006 CBP Bulletin (Vol. 40, No. 13) available at http://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2006/vol40_03222006_no13/