HQ 555400: Tariff treatment of corrugated boxes from Mexico imported filled with foreign merchandise.GSP;GRI 5(b), HTSUS

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                       HQ 555400

                                    August 15, 1990

            LA-2 CO:R:C  555400 RA

            CATEGORY:  Classification

            TARIFF NO.:  4819.10.00

            Mr. Juan Lans
            c/o Intergrafica, S.A. De C.V.
            Rio Nilo No. 6
            Col. Cuauhtemoc
            Mexico, D.F. 06500

            RE:  Tariff treatment of corrugated boxes from Mexico imported
                 filled with foreign merchandise.GSP;GRI 5(b), HTSUS

            Dear Mr. Lans:

                 This is in response to your undated letter, received in
            this office on May 24, 1989, requesting information regarding
            the tariff status of corrugated cardboard boxes made in Mexico
            from U.S. materials and exported to this country containing
            foreign merchandise.  We regret the delay in responding to
            your request.

            FACTS:

                 You indicate that the boxes are made from raw material
            (liner and medium papers) of U.S. origin and will be used to
            ship Mexican products such as ceramic tiles to the U.S.  You
            advise that the boxes are suitable for repetitive use and ask
            whether they would be free of duty, dutiable only on the value
            added abroad, or dutiable on their full value.

            ISSUE:

                 What is the tariff status of cardboard boxes made in
            Mexico from U.S.-made materials when imported into the U.S.
            filled with Mexican products?

            LAW AND ANALYSIS:

                 General Rule of Interpretation 5(b), Harmonized Tariff
            Schedule of the United States (HTSUS), provides that packing
            containers entered with the goods therein will be classified
            with the goods unless the containers are clearly suitable for
            repetitive use, in which case they would be separately














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            classifiable from their contents.  We will assume for purposes
            of this ruling that the boxes in question are clearly suitable
            for repetitive use.

                 The fact that U.S.-made materials are used in making the
            boxes in Mexico will not be the basis for according a partial
            or complete exemption from duty to the boxes upon their
            importation into the U.S.  Cartons, boxes, or cases of
            corrugated paper or paperboard are classifiable under
            subheading 4819.10.00, HTSUS, which provides for a duty rate
            of 2.8 percent ad valorem.

                 However, the boxes may be eligible for duty-free
            treatment under the Generalized System of Preferences (GSP).
            Under this program, eligible articles imported directly from a
            designated beneficiary developing country (BDC) into the U.S.
            qualify for free entry if the sum of the cost or value of the
            materials produced in the BDC, plus the direct costs involved
            in processing the article in the BDC, is at least 35% of the
            article's appraised value at the time it is entered into the
            U.S.  See section 10.176(a), Customs Regulations (19 CFR
            10.176(a)).

                 Mexico is a BDC and subheading 4819.10.00, HTSUS, is a
            GSP-eligible provision.  Therefore, assuming that the boxes
            are imported directly to the U.S. from Mexico, they will
            receive duty-free treatment if the GSP 35% value-content
            requirement is met.

                 The cost or value of materials which are imported into
            the BDC and used in the production of the GSP eligible article
            (as in this case) may be included in the 35% value-content
            computation only if the materials undergo a double substantial
            transformation in Mexico.  That is, the U.S. liner and medium
            papers must be substantially transformed in Mexico into a new
            and different intermediate article of commerce, which is
            itself substantially transformed in the production of the
            final article.  Without more detailed information concerning
            the processing of the boxes in this case, we are unable to
            determine whether the U.S. materials are subjected to the
            above-described double substantial transformation.  However,
            regardless of whether the cost of the U.S. materials may be
            counted toward the 35% requirement, if the direct costs of
            processing performed in Mexico equal or exceed 35% of the
            appraised value of the boxes, they will be entitled to free
            entry under the GSP.















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                 For your information, we are enclosing a copy of the
            Customs Regulations relating to the GSP (19 CFR 10.171-
            10.178).

            HOLDING:

                 Corrugated paper boxes made in Mexico from U.S. materials
            and imported containing Mexican products would be dutiable at
            the rate applicable to boxes' contents unless it is determined
            that they are clearly suitable for repetitive use.  If clearly
            suitable for repetitive use, the boxes would be separately
            classifiable and dutiable at the rate of 2.8 % ad valorem, or,
            if the GSP country of origin requirements are satisfied, they
            would be entitled to free entry under this program.

                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division

            Enclosure