HQ 951927: Hooks; GRI 1; CFTA; originating goods; General Note 3(c)(vii)(B)(2); General Note 3(c)(vii)(R)(15)(aa); change in tariff classification

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 951927 

                       September 15, 1992

CLA-2 CO:R:C:M 951927 KCC

CATEGORY:  Classification

TARIFF NO.:  8302.50.00

Ms. Deborah J. Clune
PBB USA Inc.
434 Delaware Avenue
Buffalo, New York 14202

RE:  Hooks; GRI 1; CFTA; originating goods; General Note
     3(c)(vii)(B)(2); General Note 3(c)(vii)(R)(15)(aa); change
     in tariff classification

Dear Ms. Clune:

     This is in response to your letter dated May 19, 1992, to
Customs in Buffalo, New York, on behalf of the Nystrom Group,
regarding the tariff classification under the Harmonized Tariff
Schedule of the United States ("HTSUS"), and eligibility under
the United States-Canada Free Trade Agreement ("CFTA"), of hooks
from Canada.  Samples of the hooks were submitted for
examination.

FACTS:

     The hooks under consideration are formed from steel and
drilled with holes in Sweden.  The hooks are then entered into
Canada where Nystrom paints the hooks, and packages them with
Canadian manufactured screws.  The packaged hooks are then
imported into the U.S.  You submitted a percentage breakdown of
the selling price for export as follows:

     Swedish material              34.5%
     Freight & Duty                 4.9%
     Canadian Material              9.4%
     Canadian Labor                 6.2%
     Canadian Overhead             36.4%
     Profit                         8.6%

     Selling Price for Export       100%

ISSUE:

I.   What is the proper tariff classification of the hooks under
the HTSUS?

II.  Are the hooks eligible for preferential tariff treatment
under the United States-Canada Free Trade Agreement ("CFTA")?

LAW AND ANALYSIS:

I.   Tariff Classification

     The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's).  GRI 1,
HTSUS, states in part that "for legal purposes, classification
shall be determined according to the terms of the headings and
any relative section or chapter notes...."

     The hooks are classified under subheading 8302.50.00, HTSUS,
which provides for "Base metal mountings, fittings and similar
articles suitable for furniture, doors, staircases, windows,
blinds, coachwork, saddlery, trunks, chests, caskets or the like;
base metal, hat racks, hat-pegs, brackets and similar fixtures;
castors with mountings of base metal; automatic door closers of
base metal; and base metal parts thereof...Hat-racks, hat pegs,
brackets and similar fixtures, and parts thereof."  This tariff
provision is eligible for preferential tariff treatment under the
CFTA.

II.  The United States-Canada Free Trade Agreement

     To be eligible for tariff preferences under the CFTA, goods
must be "originating goods" within the rule of origin in General
Note 3(c)(vii)(B), HTSUS.  There are two primary means in General
Note 3(c)(vii)(B), HTSUS, by which articles imported into the
U.S. may be "goods originating in the territory of Canada."  The
first method is if the goods are "wholly obtained or produced in
the territory of Canada and/or the United States."  General Note
3(c)(vii)(B)(1), HTSUS.  The second method is if the goods are
"transformed in the territory of Canada and/or the United
States."  General Note 3(c)(vii)(B)(2), HTSUS.

     A product which is "wholly obtained or produced in the
territory of Canada and/or the United States" is one which is
grown, mined, harvested, born and raised in Canada and/or the
United States, or otherwise intimately connected to the two
countries and their land, air and sea territories and defined in
General Note 3(c)(vii)(L), HTSUS.  The hooks are formed and
drilled in a third country, Sweden.  Therefore, the hooks do not
meet the definitions found within General Note 3(c)(vii)(L),
HTSUS, and are not "wholly obtained or produced in the territory
of Canada and/or the United States" under General Note
3(c)(vii)(B)(1), HTSUS.

     The second method to become an originating good for CFTA
purposes is for an article made of foreign materials to be
transformed in Canada and/or the United States in accordance with
General Note 3(c)(vii)(B)(2), HTSUS.  A transformation occurs
when a change in tariff classification occurs that is authorized
by General Note 3(c)(vii)(R), HTSUS.  Pursuant to General Note
3(c)(vii)(R)(15)(aa), HTSUS, a transformation is evident for
Chapter 83, HTSUS, when a change from one chapter to another
occurs.  In this instance, the unpainted hooks are classified
under subheading 8302.50.00, HTSUS, when they enter Canada.  Upon
importation into the U.S., the same hooks, now painted and
packaged with screws, remain classified under subheading
8302.50.00, HTSUS.  No change in tariff classification occurs. 
The hooks are not transformed in Canada and, therefore, are not
considered to be "goods originating in the territory or Canada."

HOLDING:

     The hooks are properly classified under subheading
8302.50.00, HTSUS, which provides for "Base metal mountings,
fittings and similar articles suitable for furniture, doors,
staircases, windows, blinds, coachwork, saddlery, trunks, chests,
caskets or the like; base metal, hat racks, hat-pegs, brackets
and similar fixtures; castors with mountings of base metal;
automatic door closers of base metal; and base metal parts
thereof...Hat-racks, hat pegs, brackets and similar fixtures, and
parts thereof."  

     The hooks are not transformed in Canada so to affect a
required change in tariff classification in accordance with
General Notes 3(c)(vii)(B)(2) and 3(c)(vii)(R), HTSUS.  Thus, the
hooks are not "goods originating in the territory of Canada" for
CFTA purposes in accordance with General Note 3(c)(vii)(B),
HTSUS.  

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division