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CBP Ruling Revocations and Modifications on Invoices, Origin Marking, Drawback, Classification

Thursday, May 19, 2016
Sandler, Travis & Rosenberg Trade Report

The following proposed or final revocations and modifications of U.S. Customs and Border Protection rulings are included in the May 18, 2016, Customs Bulletin and Decisions. Comments on the proposed revocations and modifications are due no later than June 17 and the final revocations and modifications will be effective for goods entered or withdrawn from warehouse for consumption on or after July 18.

Original Invoice Requirement. CBP is proposing to modify ruling H109795 to reflect the proper determination that an original invoice reflecting the transaction under which goods actually began their journey to the U.S. is only required when goods transit from the port of exportation and are entered at the first port of entry. This ruling concerns the admission of imported alcohol into a foreign-trade zone and its subsequent withdrawal and transfer to a duty-free store for sale and exportation, and it currently provides that the importer of record must provide the original invoice for the entry of the alcohol into the duty-free store. However, CBP now states that this latter entry constitutes an entry from the FTZ, not from the port of exportation, and that as a result the original invoice requirement does not apply.

Origin Marking of Orthodontic Brackets. CBP is proposing to modify ruling NY B89079 concerning the country of origin of orthodontic brackets for marking purposes. These brackets are used as parts of orthodontic braces and are manufactured in the U.S. before being sent to Mexico to be color coded to designate the specific tooth for which the bracket is designed. CBP states that the brackets are an originating good under NAFTA and have been determined to be a good of U.S. origin and that their country of origin for marking purposes is the U.S. This does not change CBP’s determination that because the brackets are advanced in value or improved in condition in Mexico their country of origin for duty purposes is Mexico.

Origin Marking of Bicycles. In ruling NY N269994 CBP cited a previous ruling in holding that bicycles manufactured abroad and assembled into complete and finished bicycles in the U.S. were substantially transformed and that the country of origin of the complete bicycles is the U.S. However, CBP has determined that the facts in the previous ruling were misinterpreted and misapplied; i.e., in that ruling the frames were manufactured in the U.S., not abroad, and combined with imported and domestic parts into a complete bicycle. CBP is therefore proposing to revoke ruling NY N269994 to reflect that because the frame is perhaps the most essential component of the finished bicycle it imparts the country of origin of the bicycle, which must be marked accordingly.

Garment Hangers. In ruling NY N255930 CBP found certain garment hangers imported with garments to be classified with, and dutiable at the same rate of duty as, the garments. CBP is now proposing to revoke that ruling to reclassify the hangers as other plastic articles for the conveyance or packing of goods under HTSUS 3923.90.00 (3 percent duty). CBP explains that the hangers at issue are suitable for repetitive use for the conveyance of goods (and therefore not required to be classified with the goods, pursuant to GRI 5(b)) because they are strong enough to be reused and there exists a commercial viability for that reuse.

Same Condition Drawback. CBP is revoking ruling HQ H170624 to reflect its determination that a physical vacuum deposition process performed in the U.S. to achieve a different type of finish on plumbing fixtures imported already finished, chromed and ready for final assembly or sale does not qualify as a “use” for purposes of same condition drawback under 19 USC 1313(j)(1).

NAFTA Origin Marking. CBP is revoking rulings NY R00721 and NY N047417 relating to the country of origin marking under NAFTA of solar panels manufactured in Mexico from solar cells and other components from Japan and the U.S CBP holds that the solar panels’ country of origin for marking purposes is Japan because the panels do not undergo the required change in tariff classification as a result of the operations in Mexico and the single material or component that imparts the essential character to the panels is the solar cell, which originates in Japan. As a result, the panels cannot be labeled “components from Japan, assembled in Mexico” or “components from Japan, manufactured in Mexico.”

However, because the petitioner has provided a completed and signed NAFTA certificate of origin claiming that the solar panels originate in a NAFTA country under HTSUS General Note 12, and because the finished panels do not qualify to be marked as a good of that country (because the country of origin for marking purposes is Japan), future imports will qualify to be marked as products of Mexico pursuant to the NAFTA preference override.

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