H314563

HQ H314563 April 29, 2021 OT:RR:CTF:VS H314563 UBB CATEGORY: Origin Georgi N. Mifodjev 1101 Prospect Ave Westbury, NY 11590 RE: Country of Origin, and Application of USMCA to a certain metal powder. Dear Mr. Mifodjev: This is in response to your September 22, 2020 ruling request, filed on behalf of Oerlikon Metco (US), Inc. (“Oerlikon” or “importer”), regarding the country of origin, and application of the United States Mexico Canada Agreement (USMCA) of a metal powder, which will be prepared in Canada, for purposes of marking and preferential duty treatment under the USMCA. FACTS: Oerlikon is a materials and surface solutions provider that offers specialized coating services, coating equipment and materials. The subject good is a metal powder identified by its internal product number with relevant Harmonized Tariff Schedule of the United States (“HTSUS”) classification subheadings provided in the ruling request. According to the ruling request, Metco 52052B is a metal powder consisting of non-agglomerated tungsten carbide powder and nickel alloy powder. The metal powder is used in thermal spray surface coatings from Oerlikon’s proprietary machines. You state that this metal powder is 60% tungsten carbide (subheading 2849.90.00, HTSUS) from China, and 40% nickel alloy (subheading 7504.00.00, HTSUS) from Great Britain. Therefore, the end-product metal powder is made from non-originating material. You state that all raw materials are tested, then gathered and blended for 45 minutes at your facility in Fort Saskatchewan in Alberta, Canada. Blended samples are then sent to a lab for testing and certification. In your submission, you provide the specific percentage content of each component that is blended to produce the end-product, as well as the time it takes to test and blend. In your ruling request, you note that you are looking for a binding ruling for classification under subheading 3824.30.00, HTSUS for the end-product, an origin ruling for labeling the product “Made in Canada”, as well as to deem the product eligible for preferential duty treatment under the USMCA. ISSUE: Whether the Metco 52052B is eligible for preferential tariff treatment pursuant to the USMCA and may be marked as a product of Canada. LAW AND ANALYSIS: Eligibility for Preferential Tariff Treatment under USCMA The United States-Mexico-Canada Agreement (“USMCA”) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). GN 11 of the HTSUS implements the USMCA. GN 11(a) provides: Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; and Goods that originate in the territory of a USMCA country under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S+” in parentheses, or under a subheading whose article description provides for originating goods of one or more USMCA countries, as the case may be, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a "good originating in the territory of a USMCA country" only if— the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or … We note that the input materials for the metal powder consist of tungsten carbide powder and nickel alloy powder. You classify the input tungsten carbide in subheading 2849.90.00, HTSUS, and the nickel alloy as subheading 7504.00.00, HTSUS. Based on the information provided, we agree that the input tungsten carbide is classifiable under subheading 2849.90.00, HTSUS, and the nickel alloy is classifiable under subheading 7504.00.00, HTSUS. Based on the documentation provided, we also concur that the proper classification of the end-product metal carbide powder is subheading 3824.30.00, HTSUS. Since the end-product metal powder contains non-originating materials, it is not considered to be a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and does not qualify under GN 11(b)(ii). We must next determine whether the metal powder qualifies under GN 11(b)(iii). The applicable rule of origin for metal powders classified under subheading 3824.30.00, HTSUS, is in GN 11(o)/38.5(A), HTSUS, which provides “a change to subheadings 3823.11 through 3826.00 from any other subheading, including another subheading within that group.” GN 11(n) provides for specific product interpretations for determination of country of origin. Specifically, GN 11(n)(iv)(E) provides: (iv) A good of any heading in chapters 28 through 38, inclusive, that satisfies one or more of the provisions enumerated in this subdivision shall be treated as an originating good, except as otherwise specified in those rules. Notwithstanding the preceding sentence, a good is an originating good if it meets the applicable change in tariff classification or satisfies the applicable value content requirement specified in subdivision (o) of this note. (E) A good of chapters 28 through 38, except for a good of chapters 28, 29, or 32, headings 3301 or 3808, or subheadings 3502.11 through 3502.19 is an originating good if the deliberate and proportionally controlled mixing or blending (including dispersing) of materials other than the addition of diluents, to conform to predetermined specifications occurs in the territory of one or more of the USMCA countries, resulting in the production of a good having essential physical or chemical characteristics that are relevant to the purposes or uses of the good and are different from the input materials. Based on the information provided in the ruling request, to produce Metco 52052B, tungsten carbide powder (subheading 2849.90.00, HTSUS) and nickel alloy powder (subheading 7504.00.00, HTSUS) are blended together in precise measured quantities. A different product, classifiable under 3824.30.00, HTSUS emerges, indicating a tariff shift has occurred. Therefore, the metal powder Metco 52052B is eligible for preferential tariff treatment under the USMCA. Marking The marking statute, Section 304, Tariff Act of 1930, as amended (1

Eligibility for Preferential Tariff Treatment under USCMAThe United States-Mexico-Canada Agreement (“USMCA”) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). GN 11 of the HTSUS implements the USMCA. GN 11(a) provides: Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; andGoods that originate in the territory of a USMCA country under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S+” in parentheses, or under a subheading whose article description provides for originating goods of one or more USMCA countries, as the case may be, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act.GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:For the purposes of this note,