The tariff classification and status under the North American Free Trade Agreement (NAFTA) of absorbent pads from Canada; Article 509

NY B87506 August 4, 1997 CLA-2-39:RR:NC:SP:221 B87506 CATEGORY: Classification TARIFF NO.: 3926.90.9880 Mr. Brent E. Mykyte Altemira Absorbent Products Ltd. 11165 Bridlington Drive Delta, BC, Canada V4C 7R1 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of absorbent pads from Canada; Article 509 Dear Mr. Mykyte: In your letter dated July 3, 1997, you requested a ruling on the tariff classification and status under NAFTA of absorbent pads from Canada. The pads are used during the shipment of items that may leak unwanted fluids, and act as super absorbent sponges. For example, the pads are used in the shipment of fresh fish packed in sealed bags and kept cool with ice. As the ice melts during shipment, the pads absorb the water and prevent leakage. The pads are made of a top layer of nonwoven polypropylene textile fabric laminated by means of hot melt adhesive to a bottom layer of polypropylene plastic sheeting. The top layer permits liquid to pass through into the absorbent middle layer, and the bottom layer prevents leakage. The absorbent middle layer consists of a mixture of ground wood pulp and super absorbent crystals of cross-linked polyacrylic acid. According to the figures submitted with your request, the wood pulp comprises 15 percent of the total value, 43 percent of the total weight, and absorbs about 10 times its weight in fluid. The super absorbent polymers comprise 43 percent of the total value, 33 percent of the total weight, and absorb 200 times their weight in fluid, forming a gel. The polymer crystals and polyethylene sheet together comprise 43 percent of the total weight and 57 percent of the total value. These two components contribute the most to the function to absorb fluid and prevent leakage, and together impart the essential character to the absorbent pads. The applicable tariff provision for the super absorbent pads will be 3926.90.9880, Harmonized Tariff Schedule of the United States (HTSUSA), which provides for other articles of plastics, and articles of other materials of headings 3901 to 3914, other. The general rate of duty will be 5.3 percent ad valorem. You have stated that the wood pulp fiber is purchased from a supplier in Canada and the polymer crystals, polyethylene sheet, nonwoven polypropylene fabric and hot melt adhesive are purchased from suppliers in the United States. However, you have not indicated whether these components originate in the United States and Canada, and you state that your suppliers are not willing to divulge the source of their material precursors. If all of the materials originate in the United States, Canada and Mexico, then the absorbent pads, being made entirely in the territory of Canada using materials which themselves were originating, will satisfy the requirements of HTSUSA General Note 12(b)(iii). The merchandise will then be entitled to a 0.5 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. If the goods which you purchase from suppliers in the United States and Canada originate in countries other than the United States, Canada and Mexico, then the finished articles may still be eligible for reduced duty under NAFTA since each of the non-originating materials used to make the absorbent pads has satisfied the changes in tariff classification required under the HTSUSA General Note 12(t)/39.10. In this case, the pads will also be subject to a Regional Value Content (RVC) requirement of 60 percent under the Transaction Value Method or 50 percent under the Net Cost Method as required under the rule applicable to the pads. Assuming the goods are eligible for preferential treatment under the NAFTA, the merchandise will be entitled to a 0.5 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. If the materials used to make the absorbent pads are from a non-originating country and you desire a ruling regarding the Regional Value Content of your goods and their eligibility for NAFTA preferential treatment, please send the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)) to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1301 Constitution Ave. N.W., Franklin Court, Washington, D.C. 20229, along with a copy of this letter. This information should include a breakdown showing the country of origin and cost for each material and showing the country of processing and cost for each of the manufacturing steps. 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 Joan Mazzola at 212-466-5580. This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party. Sincerely, Gwenn Klein Kirschner Chief, Special Products Branch National Commodity Specialist Division