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NY 888849

September 28, 1993

CLA-2-73:S:N:N3:115 888849


TARIFF NO.: 7326.20.0050; 7117.90.5000

Mr. Brian Johnson
Border Brokerage Company
P.O. Box B
Blaine, WA 98230

RE: The tariff classification of a keyring and pins from Canada.

Dear Mr. Johnson:

In your letter dated July 28, 1993, and received in this office August 2, 1993, you requested a tariff classification ruling and made an inquiry about the US/Canada Free Trade Agreement, on behalf of your client LPC Laser Processing Centers, Vancouver, B.C., Canada.

The subject items are described as follows:

1) A keyring composed of a metal key chain with a cellulosic fiber dog figurine. In your letter, you state that the keyring is composed of nickel. However, our Customs laboratory has determined that the metal components are 72.7% iron or steel by weight and 27.3% brass. The ring and chain are made in Hong Kong.

2) A wooden brooch or pin cut into the shape of three dogs and a fire captain's hat. The face of the brooch is covered with a colored print of dalmatian dogs and a red fire captain's hat. A bar-type metal clasp made in Hong Kong is glued to the back of the brooch in Canada.

3) The same brooch or pin as described in item 2 above, unassembled. However, the bar-type clasp made in Hong Kong which is included in the package, will be assembled in the United States.

The keyring is considered composite goods, consisting of different materials or made up of different components. This item shall be classified as if it consisted of the material or component which gives it its essential character. In this instance, the steel key chain imparts the essential character.

The applicable subheading for the keyring will be 7326.20.0050, Harmonized Tariff Schedule of the United States (HTS), which provides for other articles of iron or steel wire, other. The duty rate will be 5.7% ad valorem.

The applicable subheading for items 2 and 3, the brooches or pins, will be 7117.90.5000, Harmonized Tariff Schedule of the United States (HTS), which provides for imitation jewelry: other: other: valued over 20 cents per dozen pieces or parts. The duty rate will be 11% ad valorem.

Your inquiry raises the question on whether the USA/Canada Free Trade Agreement will apply. The United States-Canada Free Trade Agreement Implementation Act of 1988 (CFTA), provides preferential tariff treatment for covered goods originating in the territory of Canada as described in General Note 3(c)(vii), HTS.

For the purposes of subdivision (c)(vii) of this note, goods imported into the Customs territory of the United States are eligible for treatment as goods originating in the territory of Canada if they conform to either of the requirements of General Note 3(c)(vii)(B)(1) or (2). In particular, your product must meet the requirements of General Note 3(c)(vii)(B) which requires the following:

(1) that the goods are wholly obtained or produced in the territory of Canada and/or the United States, or

(2) they have been transformed in the territory of Canada and/or the United States, so as to the subject---

(I) to a change in tariff classification as described in the rules of subdivision (c)(vii)(R) of this note.

The CFTA reduced duty rate would not apply to item (1) the keyring - because the condition set forth in general note 3(c)vii(B)(2)(I) of the agreement, requiring a change in classification, will not be met. The keyring (split ring with chain) was made in Hong Kong. No tariff classification change has occurred as the keyring would still be classified as a keyring with or without the wood and printed matter added in Canada.

The CFTA reduced duty rate would apply to items (2) pin and (3) unassembled pin - as a change in classification has occurred from Heading 8301 to 7117.

Goods classifiable under subheading 7117.90.5000, HTS, which have originated in the territory of Canada, will be entitled to a free rate of duty under the United States-Canada Free Trade Agreement (FTA) upon compliance with all applicable regulations.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.


Jean F. Maguire
Area Director

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