HQ 554955: GSP Eligibility of Certain Wood Picture Frames

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 554955

                                   October 17, 1988

            CLA-2  CO:R:C:V 554955 DBI

            CATEGORY:  Valuation

            Mr. Carlos R. Bustamante
            4 Calle Poniente #40
            Santa Ana, El Salvador
            Central America

            RE:   GSP Eligibility of Certain Wood Picture Frames

            Dear Mr. Bustamante:

               This is in response to your undated request for information
            regarding the applicability of the Generalized System of
            Preferences (GSP) to wood picture frames manufactured in El
            Salvador.

            FACTS:

               You advise that picture frames will be cut and assembled
            from wood grown in El Salvador.  Glass and/or mirrors will be
            imported into El Salvador where they will be cut and shaped to
            fit the inside of the frames and inserted therein.  You
            indicate that the glass or mirror will compromise 9 percent of
            the value of the completed article.  You request a ruling on
            the wood frames alone and on the frames to which a glass or
            mirror component has been added.

            ISSUE:

               Whether the wood frames alone, and the frames with a glass
            or mirror component inserted, are eligible for duty-free
            treatment under the GSP.

            LAW AND ANALYSIS:

               An article imported directly from a beneficiary developing
            country (BDC) may qualify for duty-free entry under the GSP
            only if it meets the country of origin criteria set forth in
            section 10.176(a), Customs Regulations (19  CFR 10.176(a)).
            The first of these criteria provides that an article must be
            the growth, product, manufacture, or assembly of the BDC.  In
            other words, the article must either be wholly the growth,
            product, or manufacture of a BDC, or it must have undergone a

















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            substantial transformation in the BDC so as to make it a
            product of the BDC.  The second of the country of origin
            criteria provides that the sum of the cost or value of the
            materials produced in the BDC, plus the direct costs of
            processing operations performed in the BDC, must not be less
            than 35 percent of the appraised value of the imported article.
            Thus, if the first country of origin requirement is not met,
            then the article would not be eligible for GSP treatment even
            though the article satisfies the 35 percent requirement.

               Section 10.177(a), Customs Regulations (19 CFR 10.177(a)),
            provides that the words "produced in the beneficiary developing
            country" refer to the constituent materials of which the
            eligible article is composed which are either (1) wholly the
            growth, product, or manufacture of the BDC, or (2)
            substantially transformed in the BDC into a new and different
            article of commerce.  In the case of materials imported into a
            BDC, the cost or value of that material may be counted towards
            the 35 percent requirement only if the imported material is
            first substantially transformed into a new and different
            intermediate article of commerce which is then used in the BDC
            in the production of the final imported article.

               In the present case, the wood frames are wholly the growth,
            product or manufacture of El Salvador.  Therefore, the wood
            frames alone, without any glass or mirror added, clearly would
            satisfy both GSP country of origin criteria.

               With regard to the frames with the glass or mirror inserted,
            we are assuming that the glass or mirror being cut is initially
            imported into El Salvador in the form of sheets which are then
            cut to shape to fit into each individual frame size.  Under
            these circumstances, the cutting of glass or mirror to size and
            shape and inserting it into the frame results in a substantial
            transformation of the glass or mirror imported into El Salvador
            so that the finished article would qualify as a product of El
            Salvador for purposes of the first country of origin criterion.
            The cost information you have provided indicates that the 35
            percent requirement also would be met with respect to the
            frames with the glass or mirror insertion.

            HOLDING:

               On the basis of the information submitted, it is our opinion
            that the wood frames alone and the wood frames with the glass















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            or mirror inserted would be entitled to duty-free treatment
            under the GSP.

                                      Sincerely,





                                       John Durant
                                       Director, Commercial
                                       Rulings Division




            CLA-2 C0:R:C:C:V:DBI:MM:FNL10/07/88