The tariff classification and country of origin of pencils.

N285715 May 24, 2017 CLA-2-96:OT:RR:NC:N4:422 CATEGORY: Classification; Country of Origin TARIFF NO.: 9609.10.0000 Mr. Long Vu Walgreen Co. 304 Wilmot Road MS #3163 Deerfield, IL 60015 RE: The tariff classification and country of origin of pencils. Dear Mr. Vu: In your letter dated April 25, 2017, you requested a country of origin ruling. The four submitted illustrations depict items that are each identified as “4 pencils blister packed together as a retail set.” Each retail pack consists of four No. 2 pencils that are decorated by licensed characters of the same theme. There are four different themes that are further identified as follows: Walgreen’s Item Code (WIC) 978570 – Disney Tsum Ysum WIC 978571 – Marvel Spiderman WIC 978572 – Marvel Avengers WIC 978573 – Despicable Me 3 The pencils are manufactured as follows: Pencil slats that are manufactured in Russia are shipped in bulk from Russia directly to the Philippines. The graphite pencil core, the metal ferrule, eraser tip and foil, all produced in China, are shipped in bulk from China to the Philippines. In the Philippines the slats are grooved and filled with the graphite pencil core, creating a pencil sandwich. The pencil slat sandwich is then shaped into the raw pencil. The pencil is then painted, the logo is stamped onto it and it is foil wrapped. Finally, the metal ferrule and eraser is assembled onto the pencil. The applicable subheading for WIC 978570, WIC 978571, WIC 978572 and WIC 978573 will be 9609.10.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for 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. 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 on World Wide Web at https://hts.usitc.gov/current. Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)) provides that “‘Country of origin’ means the country of manufacture, production or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within the meaning of this part.” Substantial transformation requires that "There must be a transformation; a new and different article must emerge, ‘having distinctive name, character, or use.’" See Anheuser-Busch Brewing Association v. United States, 207 U.S. 556, 28 S. Ct 204 (1908). The work performed in the Philippines on the various components that are manufactured in Russia and China and shipped to the Philippines for manufacture into the completed pencils have effected a substantial transformation of those components and therefore the country of origin of the imported pencils is the Philippines. Articles classifiable under subheading 9609.10.0000, HTSUS, which are products of the Philippines may be entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations. The GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check our Web site at www.cbp.gov and search for the term “GSP”. This ruling is being issued under the provisions of Part 177 of the Customs 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, contact National Import Specialist Gary Kalus at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division