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NY G84970

December 27, 2000

CLA-2-44:RR:NC:SP:230 G84970


TARIFF NO.: 4414.00.0000

Mr. Gary A. Grubb
North West Laser Design Inc.
#87—1160 Yew Street
Blaine, WA 98231

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of wooden picture frames from Canada; Article 509

Dear Mr. Grubb:

In your letters dated October 11 and November 24, 2000, you requested a ruling on the status of wooden picture frames from Canada under the NAFTA.

You have explained that Canadian-origin poplar wood moldings (6 feet in length) will initially be shipped to Thailand. In Thailand, the moldings will be processed, i.e., stained, cut to the required sizes, mitered, and assembled, into picture frames. Glass and backer easels (made in Thailand) will also be added there. The frames will then be sent back to your firm’s facility in Surrey, B.C., Canada, where designs and/or lettering will be engraved on the frames’ wood surfaces by a laser machine. The engraved frames will then be imported into the United States for use in displaying pictures to be inserted by the ultimate purchasers.

The applicable tariff provision for the imported, laser-decorated frames will be 4414.00.0000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for wooden frames for paintings, photographs, mirrors or similar objects. The general rate of duty will be 3.9%. (This rate will remain unchanged in 2001.)

In the scenario you have outlined, the moldings enter Thailand and are substantially transformed into products (picture frames) of that country. That is, the moldings are processed in Thailand to the extent that they acquire a new name, character and use.

The picture frames, which are at that point considered products of Thailand, are then shipped to Canada for a laser-engraving operation. The latter procedure is insufficient to cause the frames to become products of Canada. Under the rules set forth in General Note 12(b), HTSUSA, the Thai frames are considered “non-originating materials” that would have to undergo a classification change (“tariff shift”) in Canada in order to qualify for preferential treatment under the NAFTA. The laser-engraving process fails to cause such a tariff shift, since the frames shipped to your Canadian facility from Thailand are goods of heading 4414, and remain goods of heading 4414 when they are later exported to the United States. Thus, the finished articles, as imported into the U.S., fail to satisfy the NAFTA eligibility requirements.

For marking purposes, the goods are similarly considered to be products of Thailand. Part 102 of the Customs Regulations (19 C.F.R. 102) sets forth the NAFTA “rules of origin” for various purposes, including country of origin marking. In order to become products of Canada for marking purposes, the frames brought into Canada from Thailand would have to satisfy section 102.11(a)(3) of the regulations. That is, in Canada they would have to undergo a change in tariff classification as set forth in section 102.20. As we have already noted, the frames (which upon entry into Canada are considered “foreign material,” i.e., products of Thailand) do not undergo any processing that causes a change in classification while in Canada. Thus, they fail to become products of Canada for marking purposes. The frames must therefore be marked “Made in Thailand” (or wording of similar effect), legibly, in a conspicuous place, and in a manner sufficiently permanent to reach the ultimate purchaser.

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 19 CFR 181.100(a)(2). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. In the event that the facts or merchandise are modified in any way, you should bring this to the attention of Customs and you should resubmit for a new ruling in accordance with 19 CFR 181.93. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by the Customs Service.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 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 Paul Garretto at 212-637-7009.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.


Robert B. Swierupski

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