N310942

N310942 April 22, 2020 MAR-2 OT:RR:NC:N1:105 CATEGORY: Origin, Marking, Trade Programs Daniel Kiselbach Miller Thomson LLP 400 – 725 Granville Street P.O. Box 10325 Vancouver, BC V7Y 1G5 RE: The country of origin, marking and North American Free Trade Agreement (NAFTA) eligibility of projector screens Dear Mr. Kiselbach: This is in response to your letter dated January 31, 2020 requesting a ruling on the country of origin, marking and eligibility of the North American Free Trade Agreement (NAFTA). The merchandise under consideration is identified as projection screens including models High White 2.0 (3DHW 2.0 SM), Matte White 1.0 Gain (N10SM), White 1.8 Gains (N18SM) and 3D Silver 2.5 Gain (3D25SM). The projection screens are primarily for use in cinemas, but are also used by amusement parks and museums with a need to project large movies. As you reference in your request, the applicable subheading for the projector screens will be 9010.60.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Apparatus and equipment for photographic (including cinematographic) laboratories, not specified or included elsewhere in this chapter; negatoscopes; projection screens; parts and accessories thereof: Projection screens.” The general rate of duty will be free. The screen manufacturing process was described in your written request and supplemented in a teleconference held with the requester on April 16, 2020. The start of the manufacturing process is similar for all four screens. The Matte White projection screen consists of two raw materials imported into Canada, PVC film from the United States and PVC eyelets (grommets) from Denmark. When the PVC film enters the Canadian factory, it is processed with a perforating machine, which adds thousands of tiny holes to the film. These holes allow sound to travel through the projection screen as many cinemas have the speakers behind the screen. Without the holes, the sound would have a muffled effect. After holes are added, the screen is cut into panels in lengths as per customer specifications. Several panels are cut and then seamed to the proper width. The seaming process uses a high frequency welding machine to activate the molecules in the film. When complete, the seam will not be noticeable for the viewing audience. Finally, the grommets, placed nine inches apart, and border material are added using a high frequency welding machine. After the projection screen is completed, it is packaged for shipping to the end customer. For the other three screens, the manufacturing process is similar to the Matte White screen, except that specialized coatings are added. The additives, pigments and flakes, change the dynamics of how the movies are viewed. For example, the coating on the 3D Silver 2.5 gain projection screen provides the ability to view three-dimensional images. This projection screen has the following raw materials: PVC film (United States), PVC eyelets (Denmark), resin (United States), additives (United States and United Kingdom), coloring pigments (United States), pigments (United States and the United Kingdom), solvents (United States), and water (Canada). The ingredients are mixed and sprayed onto the screens in the Canadian manufacturing facility. The facility contains specialized paint sprayers designed specifically for the coating process. Once dry, the screens are packaged for shipping to the end customer. The High White 2.0 screen is produced similarly to the 3D Silver 2.5 gain projection screen, however, this screen has the following raw materials: PVC film (United States), PVC eyelets (Denmark), resin (United States), additives (United States and United Kingdom), coloring pigments (United States and United Kingdom), solvents (United States), water (Canada), flakes (United States), clear (United States) and reducer (United States). Similarly, the White 1.8 Gains projection screen raw materials are: PVC film (United States), PVC eyelets (Denmark), resin (United States), additives (United States and United Kingdom), coloring pigments (United States and Germany), solvents (United States), and water (Canada). With regard to country of origin marking of the projection screens, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. 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 U.S. the English name of the country of origin of the article. The regulations implementing the requirements and exception to 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection Regulations (19 C.F.R. Part 134). 19 C.F.R. § 134.1(b) provides as follows: Country of origin means 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. Since Canada is a NAFTA country, the NAFTA Marking Rules must be applied in determining the country of origin for purposes of marking. Part 102, Customs and Border Protection Regulations (19 C.F.R. Part 102), sets forth the NAFTA Marking Rules. Section 102.11 provides a required 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 required hierarchy establishes that 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 Section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the projection screens are neither wholly obtained nor produced exclusively from “domestic” materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). “Foreign material” is defined in 19 C.F.R. § 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The applicable rule for subheading 9010.60.0000, HTSUS, in section 102.20 requires a change to subheading 9010.60 from any other subheading. All of the components used in the production of the subject projection screens are imported into Canada, with the exception of water, and are therefore designated as foreign material. After a thorough review of the bills of materials for each of the projection screens, all of the components, which have undergone a cutting process, a perforation process, and a welding process in Canada, are classifiable outside of heading 9010, HTSUS. Thus for purposes of marking, the foreign components undergo the requisite change in heading and the country of origin of the projection screens, models High White 2.0 (3DHW 2.0 SM), Matte White 1.0 Gain (N10SM), White 1.8 Gains (N18SM) and 3D Silver 2.5 Gain (3D25SM) is Canada. Turning to your request for NAFTA status, General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part: For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set fo

of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). “Foreign material” is defined in 19 C.F.R. § 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The applicable rule for subheading 9010.60.0000, HTSUS, in section 102.20 requires a change to subheading 9010.60 from any other subheading. All of the components used in the production of the subject projection screens are imported into Canada, with the exception of water, and are therefore designated as foreign material. After a thorough review of the bills of materials for each of the projection screens, all of the components, which have undergone a cutting process, a perforation process, and a welding process in Canada, are classifiable outside of heading 9010, HTSUS. Thus for purposes of marking, the foreign components undergo the requisite change in heading and the country of origin of the projection screens, models High White 2.0 (3DHW 2.0 SM), Matte White 1.0 Gain (N10SM), White 1.8 Gains (N18SM) and 3D Silver 2.5 Gain (3D25SM) is Canada. Turning to your request for NAFTA status, General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part:For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if--(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in t