H334088

HQ H334088 March 29, 2024 OT:RR:CTF:VS H334088 AM CATEGORY: Origin; Marking Michael Dahm Cole International USA Inc. 1775 Baseline Road #280 Grand Island, NY 14072 RE: USMCA Eligibility of Lubrigel L; Country of Origin Marking Dear Mr. Dahm: This is in response to your request, dated August 9, 2023, filed on behalf of Canadian Energy Services LP. (“Canadian Energy Services”). In your letter, you request a binding ruling on the country of origin for purposes of marking and tariff classification of Lubrigel L imported from Canada. You also inquire about the eligibility of Lubrigel L for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for response. Along with your ruling request, you submitted a process flow diagram of Lubrigel L, and documents detailing the ingredients that compromise Lubrigel L, including the certificate of origin of each ingredient. FACTS: Lubrigel L is a complexed polysaccharide gel forming polymer with rheological and viscoelastic properties. It exhibits both viscous (liquid-like) and elastic (solid-like) properties. Lubrigel L is imported in a liquid form in pails that are palletized and shrink wrapped. It may be used in conventional drilling operation, workover operations, and certain completion operations. You state that the process of making Lubrigel L occurs entirely within Canada. The ingredients processed in Canada are sourced from a variety of suppliers, both United States and foreign, as follows: Material Country of Origin Weight HTS  CAS Premium Mineral Oil USA 50.75% 2710.19.30  Parasur 628 India 2.00% 3402.90  Bentone 155 USA 2.25% 6806.20  Xanthan Gum China 27.00% 3913.90.2015  Guar Powder USA 18.00% 1302.32.0020  The production process that occurs in Canada is described as follows: Raw materials are set out for 24 hours prior to blending to reach room temperature. The vessel and lines are checked to ensure they are cleaned with mineral oil. The required amount of mineral oil is placed in the vessel and ensured it is at a temperature of 10 C before blending. The surfactant is added and mixed for 15 minutes. The ingredients are mixed while the required powdered products are added via the Auger. The ingredients are mixed for one hour until the last raw material is added. A sample of the product is taken to the lab for testing and quality control. Adjustments are made if required. Once quality control is passed, labels are attached with corresponding lot number and the product is packaged. The product is then sealed and stored ready for shipping. ISSUE: Whether Lubrigel L is eligible for preferential tariff treatment under the USMCA when it is imported from Canada into the United States. What is the country of origin of Lubrigel L for marking purpose? LAW & ANALYSIS: Eligibility for USMCA Preferential Tariff Treatment The 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)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(a)(i) 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 . . . 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 … Since Lubrigel L contains non-originating materials, it is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor is the product produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the product qualifies under GN 11(b)(iii). Based on the description of Lubrigel L included in your submission, we agree that the applicable subheading for the subject merchandise is 3824.99.4900, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), which provides for: “Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included: Other: Other: Other: Other: Mixtures that are in whole or in part of hydrocarbons derived in whole or in part from petroleum, shale oil or natural gas.” The applicable rule of origin for goods classified under subheading 3824.99.4900, HTSUS is in GN 11(o)/38.5 which provides, in relevant part: 5. (A) A change to subheadings 3823.11 through 3826.00 from any other subheading, including another subheading within that group; or (B) No change in tariff classification to a good of subheadings 3823.11 through 3826.00, provided there is a regional value content of not less than: (1) 40 percent where the transaction value method is used; or (2) 30 percent where the net cost method is used. GN 11(n) provides for specific product interpretations for determination of country of origin. Specifically, GN 11(n)(iv)(D) 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. (D) 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 Lubrigel L, non-originating materials including Xanthan Gum (3913.90.2105, HTSUSA), Guar (1302.32.0020, HTSUSA), and Parasur (3402.90, HT

Eligibility for USMCA Preferential Tariff TreatmentThe 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)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(a)(i) 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 . . . 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