H340588

HQ H340588 November 20, 2024 OT:RR:CTF:VS H340588 AM CATEGORY: Origin; Marking Georgi Mifodjev Oerlikon Metco US Inc. 1101 Prospect Ave. Westbury, NY 11590 RE: USMCA Eligibility of Nickel Powder; Country of Origin; Marking Dear Mr. Mifodjev: This is in response to your request, dated June 21, 2024, filed on behalf of Oerlikon Metco US Inc. (“Oerlikon”) in which you request a binding ruling regarding the eligibility of nickel powder for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”) as well as the country of origin for marking purposes. Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division (“NCSD”) for response. Our ruling is set forth below. FACTS: The final product under consideration is pure nickel powder. The nickel powder is manufactured by hydrometallurgy in Australia and does not have a specific application, and it consists of 100% nickel. The nickel powder is then shipped to Canada where it is screened and cut into different sizes which may be sold as is or blended together with other sizes. The powder is packaged in either pails with 25 kg of powder or drums holding 250 kg of powder. According to your request, and confirmed by the NCSD, the subject merchandise is classified under subheading 7504.00.00, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for: “Nickel powders and flakes.” ISSUES: Whether the imported nickel powder qualifies for preferential tariff treatment under the USMCA? What is the country of origin of the imported nickel powder for marking purposes? LAW & ANALYSIS: USMCA 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 … Here, 100% nickel powder is sourced from Australia. As such, it is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i), nor is it a good produced exclusively from originating materials per GN 11(b)(ii). Thus, we must determine whether the good qualifies under GN 11(b)(iii). As stated above, the NCSD has determined that the applicable subheading for the finished nickel powder is subheading 7504.00.00, HTSUS. The applicable rule of origin for goods classified under subheadings 7504.00.00, HTSUS, is in GN 11(o)/75.1, HTSUS, which provides, in relevant part: A change to headings 7501 through 7504 from any other heading, including another heading within that group. The final product which consists of nickel powder in different sizes is classified under 7504.00.00, HTSUS before and after its importation to Canada. Since there is no change to the nickel powder from any other heading, including another heading within that group, the applicable tariff shift is not met. Therefore, the nickel powder is not eligible for preferential tariff treatment under the USMCA. Country of Origin for Marking Purposes Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. By enacting 19 U.S.C. § 1304, Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are the product. “The evident purpose is to mark the goods so that at the time of purchaser the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940). Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. § 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Title 19, § 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].” Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a hierarchy for determining the country of origin of a good for marking purposes. See 19 C.F.R. § 102.11. Applied in sequential order, the hierarchy establishes the country of origin of a good is the country in which: (a)(1) The good is wholly obtained or produced; (a)(2) The good is produced exclusively from domestic materials; or (a)(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. “Material” means a good that is incorporated into another good as a result of production with respect to that other good, and includes parts, ingredients, subassemblies, and components.” 19 C.F.R. § 102.1(l). The nickel powder is neither “wholly obtained or produced” nor “produced exclusively from domestic materials.” Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin, and we need to apply paragraph (a)(3). The tariff shift requirement in § 102.20 for a good of subheading 7504.00.00, HTSUS, requires

USMCA 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 m