HQ 556006: Eligibility for duty-free treatment under the CBERA and U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, of packaging materials produced in Jamaica from U.S. materials. Printing; laminating; curing; cutting; 555742; 555656

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 556006

                          May 16, 1991

CLA-2 CO:R:C:S 556006 KCC

CATEGORY:  Classification

Mr. Derryck E. Cox
JAMPRO
Jamaica's Economic Development Agency
866 Second Avenue
New York, New York  10017

RE:  Eligibility for duty-free treatment under the CBERA and U.S.
     Note 2(b), subchapter II, Chapter 98, HTSUS, of packaging
     materials produced in Jamaica from U.S. materials. Printing;
     laminating; curing; cutting; 555742; 555656

Dear Mr. Cox:

     This is in response to your letter dated April 18, 1991,
requesting a ruling concerning whether packaging material
produced in Jamaica will be eligible for duty-free treatment
under the Caribbean Basin Economic Recovery Act (CBERA) (19
U.S.C. 2701-2706).  Samples of the packaging material in roll
form and in bag form were submitted for examination.

FACTS:

     You are presently discussing a possible manufacturing
operation with Kleartone Transparent Products Co., Inc. to
produce packaging material in Jamaica.  U.S.-origin raw
materials, such as polyester, polypropylene, polyethylene, mylar,
(all of which are synthetic man-made materials) nylon adhesives,
ink, packing, and shipping supplies, will be shipped to Jamaica
for manufacture into packaging material.

     In Jamaica, the U.S.-origin materials will be subjected to
the following operations:

1.   up to six colors will be printed on rolls of the raw
     material;
2.   the printed film and clear film will be laminated together
     thereby locking the printing between the two sheets;
3.   the sheets will be cured until dry;
4.   the sheets will be cut to designated width depending on the
     customer's order; and
5.   the rolls will be packaged for shipment.

     Upon completion of the Jamaican operations, the rolls will
be imported into the U.S.  In the U.S., the rolls will be placed
on machines which automatically form the bag, fill it with a
designated product, and seal it.

ISSUE:

     Whether the packaging material will be entitled to duty-free
treatment under the CBERA when imported into the U.S.

LAW AND ANALYSIS:

     Under the CBERA, eligible articles the growth, product or
manufacture of designated beneficiary countries (BC's) may
receive duty-free treatment if such articles are imported
directly to the U.S. from a BC, and if the sum of 1) the cost or
value of the materials produced in a BC or BC's, plus 2) the
direct cost of processing operations performed in a BC or BC's,
is not less than 35% of the appraised value of the article at the
time it is entered into the U.S.  See, 19 U.S.C. 2703(a).  The
cost or value of materials produced in the U.S. may be applied
toward the 35% value-content minimum in an amount not to exceed
15% of the imported article's appraised value.  See, section
10.195(c), Customs Regulations (19 CFR 10.195(c)).

     U.S. Note 2(b), subchapter II, Chapter 98, HTSUS ("Note
2(b)"), provides for the duty-free treatment of articles (other
than textile and apparel articles and petroleum and petroleum
products derived from petroleum, provided for in heading 2709 or
2710) which are assembled or processed in a CBERA BC wholly of
fabricated components or ingredients (except water) of U.S.
origin.  This amendment was effective with respect to goods
entered on or after October 1, 1990.

     To qualify for duty-free treatment under this provision, the
manufacture of the packaging material must take place in one of
the CBERA designated BC's.  Jamaica is a BC.  See, General Note
3(c)(v)(A), HTSUS.  Upon review of the applicable duty-free
programs, Note 2(b) is clearly more relevant than the CBERA.
Therefore, we will limit our discussion to Note 2(b).

     We are of the opinion that the packaging material produced
in Jamaica may enter the U.S. duty-free pursuant to U.S. Note
2(b).  The material does not fall within one of the four
categories of products which are excluded from Note 2(b)
treatment (textile and apparel articles, petroleum and certain
products derived from petroleum).  Moreover, only U.S. origin
components or ingredients are used during the foreign
manufacturing operation, which involves printing, laminating,
curing, and cutting.  We believe that these processes are
encompassed by the operations specified in Note 2(b).  See,
Headquarters Ruling Letter (HRL) 555742 dated November 5, 1990,
and HRL 555656 dated December 24, 1990.

     Enclosed is a copy of Headquarters telex 9264071 dated
September 28, 1990, to Customs field offices, setting forth
procedures for entry under Note 2(b).

HOLDING:

     The packaging materials which are entirely manufactured from
U.S.-origin materials in Jamaica may enter the U.S. duty-free
pursuant to Note 2(b) provided the documentation requirements set
forth in the Headquarters telex 9264071 dated September 28, 1990,
are satisfied.

                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division

Enclosure