HQ 089366: Modification of Headquarters Ruling 088745 ("HQ 088745"), dated May 7, 1991; toy water pistol; United States-Canada Free Trade Agreement ("CFTA"); General Note 3(c)(vii); General Note 3(c)(vii)(B)(2); General Note 3(c)(vii)(R)(20); other toys, not having a spring mechanism

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 089366

                          May 22, 1991

CLA-2 CO:R:C:M  089366  JMH

CATEGORY:  Classification

TARIFF NO.:  9503.90.60

Mr. Richard Whelan
Alton Industries Ltd.
7296 Wilson Avenue
Delta, B.C.
Canada  V4G 1H3

RE:  Modification of Headquarters Ruling 088745 ("HQ 088745"),
     dated May 7, 1991; toy water pistol; United States-Canada
     Free Trade Agreement ("CFTA"); General Note 3(c)(vii);
     General Note 3(c)(vii)(B)(2); General Note 3(c)(vii)(R)(20);
     other toys, not having a spring mechanism

Dear Mr. Whelan:

     This is a modification of Headquarters Ruling 088745 ("HQ
088745"), dated May 7, 1991, concerning toy water pistols
imported from Canada.  It has been brought to the attention of
this office that the eight digit subheading assigned to the toy
water pistols was incorrect.  Below is the identical ruling with
the appopriate classification.  This change will not effect the
rate of duty to which the toy water pistols are subject.

FACTS:

     The articles in question are toy water pistols.  The pistols
are made primarily from molded plastic parts.  The plastic is
exported from the United States to Canada and then molded in
Canada into parts.  The parts are then manufactured into pistols
in Canada.  The molded plastic parts include the following: a gun
body; a transfer tube; a bulkhead; a check valve and "O" ring
assembly; a fill port; a tap adapter assembly; a trigger, "O"
ring and spring; a trigger retainer plate; a trigger valve body
and butt plate; a tube fitting and "O" ring; a tube plug; tube
retaining rings; and a tube.  In addition to the raw plastic, the
colour concentrate, "O" rings and the tubing are from the United
States.

ISSUE:

     What is the appropriate classification for the toy water
pistols to be imported from Canada?
                               -2-


LAW AND ANALYSIS:

     The classification of merchandise under the HTSUSA is
governed by the General Rules of Interpretation (GRI's).  GRI 1
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 appropriate heading in this instance is heading 9503,
HTSUSA.  Heading 9503 describes "Other toys..."  The water
pistol is properly classified in subheading 9503.90.60, HTSUSA,
as "Other toys...Other...Other toys, not having a spring
mechanism..."  The applicable rate of duty is 6.8% ad valorem.
However, the "Special" subcolumn which corresponds to this
classification includes "CA".  "CA" indicates that the United
States-Canada Free Trade Agreement ("CFTA") applies to this
classification.  Thus, if the water pistols meet the requirements
of the CFTA, the pistols will be eligible for tariff preferences.

     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), HTSUSA.  There are two primary means in
General Note 3(c)(vii)(B) by which articles imported into the
United States 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).  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).

     A product which is "wholly obtained or produced in the
territory of Canada and/or 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 as defined in General
Note 3(c)(vii)(L), HTSUSA.  Sufficient information has not been
presented to make this determination regarding the water pistols.
However, generally a manufacturing operation will involve some
third country elements so that the manufactured goods are not
"wholly obtained or produced."

     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).  A transformation is evident when a
change in tariff classification occurs that is authorized by
General Note 3(c)(vii)(R), HTSUSA.

     In this instance, plastic, colouring concentrate, "O" rings
and tubing are being exported from the United States to Canada.
Since information has not been presented to determine if these
                               -3-


articles are originating goods under the CFTA when they enter
Canada, this office assumes for this analysis that the items are
not originating goods.

     First, the classifications of the exported items must be
examined.  Plastics and articles thereof are classified in
Chapter 39, HTSUSA.  Dyes and other coloring matter are
classified in Chapter 32, HTSUSA.  The "O" rings and the tubing
are presumably classified in Chapter 39 as articles of plastic
since at the time of importation it is unlikely if they are
clearly for use in toy water pistols.  The finished toy water
pistol is classified in Chapter 95, heading 9503.  General Note
3(c)(vii)(R)(20)(aa), HTSUSA, states that a change to a heading
in chapter 95 from any other chapter is an authorized
classification change under the CFTA.  Thus, the water pistol has
been transformed in accordance with General Note 3(c)(vii)(B)(2)
and the water pistol is a good originating in the territory of
Canada under General Note 3(c)(vii)(B)(2).  As an originating
good under the CFTA, the water pistol is eligible for CFTA tariff
preferences.

HOLDING:

     The water pistol is properly classified in subheading
9503.90.70, HTSUSA, as "Other toys...Other...Other..."  The
pistol affects an authorized classification transformation under
General Note 3(c)(vii)(R) so to be an originating good under
General Note 3(c)(vii)(B)(2) and the CFTA.  As an originating
good the toy water pistol is eligible for the CFTA tariff
preferences.


                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division