H342509

HQ H342509 January 23, 2025 OT:RR:CTF:VS H342509 EE CATEGORY: Origin; Marking Maytee Pereira PwC US 300 Madison Ave New York, NY 10017 RE: USMCA Eligibility of Damaged Jewelry; Marking Dear Ms. Pereira: This is in response to your request, dated September 9, 2024, filed on behalf of Company A [X)] and its subsidiaries, in which you request a binding ruling regarding the eligibility of certain damaged jewelry for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”) as well as the country of origin for marking purposes. Your client requested that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information designated as confidential in your request and contained within brackets in the ruling will not be released to the public and will be withheld from published versions of this ruling. FACTS: Company A [X] is a retailer of assorted precious metals jewelry, incorporated in Bermuda. Company A [X] operates retail stores in the United States, Canada, and the United Kingdom under various brands including [X], and others. In the United States, Company A [X] operates through its wholly owned subsidiary, Company B [X]. As part of its client service model, Company A [X] offers jewelry repair services to its clientele, regardless of whether the damaged items were purchased from its stores. Currently, Company A’s [X] Canadian stores primarily use various local unrelated jewelers in Canada to repair damaged merchandise brought into stores by customers. Company B [X] is contemplating a new repair process under which these repairs will be incorporated into a centralized repair operation in its U.S.-based facility. This process would involve the following steps: Merchandise such as chains, diamonds, earrings, pendants, and rings will be gathered in store locations across Canada, where customers drop off their broken or damaged items. All products collected within a prescribed timeframe (i.e., daily, biweekly, etc.) will be consolidated by each Canadian store into a combined shipment to the U.S. repair location. The shipment will be sent from Canada and imported into the United States for repair services. Upon completion of repair services in the United States, repaired items ready to be returned to their owners will be consolidated into shipments to be shipped back to Company A’s [X] corresponding Canadian stores. The repaired items will be returned to Canada and shipped to the store for collection by the customer. Your client states that a repair ticket is issued reflecting the Canadian store’s intake of the product to be repaired via Company A’s [X] repair tracking system, [X]. Repairs performed on jewelry purchased from Company C [X] may be covered under the product’s original or extended warranty. Repairs not covered under warranty or not originally purchased from Company C [X] are repaired on a fee basis, where revenue, if applicable, is collected at the Canadian store where the merchandise was previously dropped off. For repairs pursuant to warranty, the repair process is tracked via [X]. Through [X], Company C [X] can trace various data points allowing for an accurate track record of the merchandise under warranty. Namely, Company C [X] can capture the following data points, but not limited to: Stock Keeping Unit (“SKU”) number, warranty or insurance policy number, purchase price, item description, repair type, repair cost, and repair job number. Similarly, for repairs not pursuant to warranty, Company C [X] captures, via [X], the repair type, repair job number and the value of the item to facilitate proper tracking of the merchandise and documentation of non-warranty repairs. The company estimates non-warranty repairs account for about 25% of the total volume of the merchandise collected in Canada for repair in the United States. You provided an extract of Company A’s [X] tracking system and an extract of Company A’s [X]. It is indicated that the origin of the jewelry is unknown. ISSUES: Whether the damaged jewelry items imported into the United States for repair qualify for preferential tariff treatment under the United States Mexico Canada Free Trade Agreement (“USMCA”). What is the country of origin of the damaged jewelry items imported into the United States 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 … In the instant case, the origin of the damaged jewelry items is unknown. As such, they are not considered goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and GN 11(b)(ii). GN 11(b)(iii) is also not applicable since we are unable to determine whether the damaged jewelry items were produced entirely in the territory of a USMCA country. Accordingly, the damaged jewelry 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

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