The country of origin of plywood panels

N347656
May 6, 2025
CLA-2-44:OT:RR:NC:N1:130
CATEGORY: Country of Origin
TARIFF NUMBER: 9903.01.24; 9903.01.63; 9903.88.03; 4412.31.4869 Mr. Boris Huang Henan D.R. Construction Group (USA) Inc. 6600 Sunset Blvd Los Angeles, CA 90028 RE: The country of origin of plywood panels Dear Mr. Huang: In your letter, dated March 21, 2025, you requested a binding country of origin ruling on plywood panels. The ruling was returned to you for additional information, which was received by this office on April 11, 2025. Product information and a sample were submitted for our review. The product under consideration is plywood panels manufactured in multiple countries. The plywood consists of 11 core layers (veneers) of eucalyptus (a non-coniferous wood), a layer of okoume (a tropical wood) on each side of the eucalyptus, and an oak veneer applied as a face to one layer of okoume. The grain of each veneer runs at a 90-degree angle to that of the adjacent veneers, with the exception of the oak, which is parallel to the okoume veneer beneath it. The panel is unfinished, i.e., not coated on its surfaces with any material. In understanding the language of the Harmonized Tariff Schedule of the United States (HTSUS), the Explanatory Notes to the Harmonized System (ENs) may be utilized. The ENs, although not dispositive nor legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The ENs define “plywood” as panels “consisting of three or more sheets of wood glued and pressed one on the other and generally disposed so that the grains of successive layers are at an angle.” The instant panel meets the definition of “plywood” as it consists of 14 layers and virtually all of the layers are disposed so that the grains of successive layers are at a 90-degree angle. We note that the definition requires that the grains “generally” be at an angle to successive layers; the oak layer is parallel to the adjacent layer, but this is not significant enough to yield a product that has properties that are different from plywood.

You argue that the panel is a “veneered panel”. A “veneered panel” is defined in the ENs as a panel “consisting of a thin veneer of wood affixed to a base, usually of inferior wood, by glueing under pressure.” “Veneered panel” is a less specific product than plywood. It is merely a veneer affixed to a base, whereas plywood is a veneered panel with a specific arrangement of layers. “Plywood” is a more specific product than a “veneered panel”, and the instant panel meets the definition of plywood. The applicable subheading for the instant panel will be 4412.31.4869, HTSUS, which provides for Plywood, veneered panels and similar laminated wood: Other plywood consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm in thickness: With at least one outer ply of tropical wood: Not surface covered, or surface covered with a clear or transparent material which does not obscure the grain, texture or markings of the face ply: Other: With at least one outer ply of the following tropical woods: Dark Red Meranti, Light Red Meranti, White Lauan, Sipo, Limba, Okoumé, Obeche, Acajou d'Afrique, Sapelli, Virola, Mahogany, Palissandre de Para, Palissandre de Rio or Palissandre de Rose: Other: Other: Not surface covered: Other. The rate of duty is 8 percent. In your letter, you outline a scenario wherein okoume trees are peeled into veneers in Gabon and eucalyptus trees are peeled into veneers in Cambodia. The eucalyptus veneers and many of the okoume veneers are shipped to China, where they are glued, laid up, and pressed into plywood cores. The panels at this time have 12 layers. The panels are then shipped to Nigeria. In Nigeria, 4”-wide oak veneers (from U.S. origin trees) are glued together (“stitched”) side by side to create veneers with a four-foot-wide expanse. The oak veneers are laminated onto a thin veneer of okoume wood for stabilization. The two-layer panel is then laminated onto the 12-layer plywood panel. In your letter, you claim that the operations performed in Nigeria result in a new and different panel, namely, a veneered panel. We disagree. Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 CFR 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” as 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 the marking laws and regulations. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). We also note that when determining the country of origin for purposes of applying current trade remedies under Section 301 and any additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter H301619, dated November 6, 2018. The 12-layer panel, as manufactured in China, meets the definition of plywood. When the combination oak/okoume layer is laminated onto the plywood in Nigeria, the resulting panel still meets the definition of “plywood”. It simply has two more layers, but the structure remains the same. The panel has not undergone any substantial transformation. While the work completed in Nigeria may be precise, it does not render a new and different product with a new name. It does not meet the test for a substantial transformation. Therefore, the country of origin of the plywood panels is China. Effective March 4, 2025, pursuant to U.S. Note 2(u) to Subchapter III, Chapter 99, all products of China and Hong Kong as provided by heading 9903.01.24, HTSUS, other than products classifiable under headings 9903.01.21, 9903.01.22, and 9903.01.23, HTSUS, will be subject to an additional 20 percent ad valorem rate of duty. At the time of entry, you must report the applicable Chapter 99 heading, i.e. 9903.01.24, in addition to subheading 4412.31.4869, HTSUS, listed above.

Effective April 5, 2025, Executive Orders implemented ?Reciprocal Tariffs. All imported merchandise must be reported with either the Chapter 99 provision under which the reciprocal tariff applies or one of the Chapter 99 provisions covering exceptions to the reciprocal tariffs. Products of China, including Hong Kong and Macau, will be assessed an additional ad valorem rate of duty of 125 percent. At the time of entry, you must report the Chapter 99 heading applicable to your product classification, 9903.01.63, in addition to subheading 4412.31.4869, HTSUS, listed above. Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 4412.31.4869, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 4412.31.4869, HTSUS listed above. The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/programs-administration/trade-remedies, respectively. 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 the World Wide Web at https://hts.usitc.gov/current. The instant plywood panels from China may be subject to antidumping and countervailing duties for hardwood plywood from China (A570-051, C570-052). Written decisions regarding the scope of antidumping and countervailing duties (AD/CVD) orders are issued by the Enforcement and Compliance office in the International Trade Administration of the Department of Commerce (ITA) and are separate from tariff classification and origin rulings issued by Customs and Border Protection (CBP). General information regarding the ITA and AD/CVD can be found at https://www.trade.gov/us-antidumping-and-countervailing-duties. The ITA?s ?Guide on How to File for an Antidumping/Countervailing Duty Scope Ruling Request? is available at https://enforcement.trade.gov/scope/Request-Scope-Ruling.pdf 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 Laurel Duvall at [email protected].
Sincerely,
Steven A. Mack Director National Commodity Specialist Division