CLA-2-96:OT:RR:NC:N4 462
Michelle Schulz
Schulz Trade Law PLLC
8150 N. Central Expressway, 10th Floor Dallas, TX 75206
RE: The tariff classification of plastic portable water pet bowls and pencils from China with logos added in Mexico
Dear Ms. Schulz:
In your letter dated April 2, 2024, you requested a tariff classification ruling on behalf of your client, Evans Manufacturing. Images and descriptive literature were provided.
The first item under consideration is the Jo-Bee Miser Round Pencil, part number 7900. It is a wooden pencil with a #2 lead.
We agree that the applicable subheading for the pencils will be 9609.10.0000, HTSUS, which provides for pencils (other than those of heading 9608), crayons, pencil leads, pastels, drawing charcoals, writing or drawing chalks and tailors' chalks: pencils and crayons, with leads encased in a rigid sheath. The rate of duty will be 14 cents per gross plus 4.3 percent ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheadings 9609.10.0000, HTSUS, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, in addition to subheadings 9609.10.0000, HTSUS, listed above.
Pencils from China may be subject to anti-dumping duties. Before you import, we recommend that you contact the International Trade Commission at: Office of Antidumping Investigations Import Administration International Trade Commission U.S. Department of Commerce 14th Street and Constitution Avenue, N.W. Washington, D.C. 20230. For your information, you can view a list of current AD/CVD cases at the United States International Trade Commission website at http://www.usitc.gov (click on "Antidumping and countervailing duty investigations"), and you can search AD/CVD deposit and liquidation messages using the AD/CVD Search tool at http://www.cbp.gov (click on "Import" and "AD/CVD").
The second item under consideration is described as the Pet Collapsi-Bowl, part number 3257. It is a portable pet water bowl made from silicone plastic. The bowl is four inches in diameter across the rim and has an eight-ounce capacity when expanded. This item will feature a carabiner to allow it to be attached to a leash, belt loop, or backpack.
We agree that the Pet Collapsi-Bowl, part number 3257, would be considered an article of plastic, and as it is not more specifically provided for elsewhere, the applicable subheading will be 3926.90.9985, HTSUS, which provides for Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Other: Other. The general rate of duty is 5.3 percent ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 3926.90.9985, HTSUS, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, in addition to subheading 3926.90.9985, HTSUS, listed above.
The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
In your request you indicate that, after importation into the United States, these products will be exported to Mexico to be screen printed, laser engraved, or digitally printed with the U.S. customer's logo. You propose that they should be classified within subheading 9802.00.50, HTSUS, upon their return importation into the United States.
Subheading 9802.00.50, HTSUS, provides a partial or complete duty exemption for articles exported from and returned to the United States after having been advanced in value or improved in condition by repairs or alterations, provided that the documentary requirements of Section 181.64, Customs Regulations (19 CFR 181.64), are satisfied.
19 CFR 181.64 (a) states that repairs or alterations means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new and commercially different good from, the good exported from the United States. However, entitlement to this tariff treatment is precluded in circumstances where the operations performed abroad destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture.
Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. Furthermore, the merchandise must be in compliance with the pertinent legal notes of the HTSUS. For example, Section XXII, Chapter 98, Subchapter II, U.S. Note 1(b) states that heading 9802 HTSUS shall not apply to any article exported with benefit of drawback (other than NAFTA drawback).
In this instance, the pencils and collapsible pet bowls are complete for their intended use prior to being exported to Mexico to undergo the stated operations. As exported from the United States, they are finished products in that they are suitable for use as intended. Although the operations performed in Mexico alter the appearance of these items, such operations do not otherwise enhance their character. They are shipped to Mexico solely for printing before being returned to the United States.
The merchandise in its condition as exported from the United States and as returned from Mexico can be marketed and sold to consumers for the same use. The operations performed in Mexico do not result in the loss of the good's identity nor create a new article with a different commercial use. Therefore, the operations performed in Mexico constitute acceptable repairs and alterations within the meaning of subheading 9802.00.50, HTSUS. These pencils and pet bowls will qualify for the special tariff treatment of that provision, provided that the documentary requirements of 19 CFR 181.64 are met.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).
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, please contact National Import Specialist Sandra Sary at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division