Details of Proclamation on HTS Rule of Origin Changes for Chile FTA Goods

(The Proclamation also makes certain changes to HTS Chapter 64 for certain rubber- or plastic-soled footwear to which a layer of textile materials has been added, which are effective on approximately December 3, 2011. The Proclamation also modifies the HTS for a special upland cotton import quota, retroactive to June 18, 2008. See ITT's Online Archives 11110113 for initial summary of the Proclamation. See ITT's Online Archives 11110303 for summary of the HTS Chapter 64 footwear changes. See future issue of ITT for summary of the upland cotton HTS changes.)

New Origin Provisions for Products of Chemical or Allied Industries

The Proclamation modifies HTS General Note 26 by replacing subdivision (m)(vi) with new text. With the new text, note 26 applies to certain goods of chapters 28 through 38 (Section VI: Products of the Chemical or Allied Industries). Subdivision (m)(vi) previously applied to chapter 27 through 38 and only provided origin conferring rules with respect to chemical reactions. The new text now provides origin conferring rules for the following processes¹:

Chemical reactions. A good of chapters 28 through 38, except a good of heading 3823, that results from a chemical reaction.²

Purification. A good of chapters 28 through 38 that is subject to purification, provided that the purification results in the elimination of (i) 80% of the impurities; or (ii) the reduction or elimination of impurities resulting in a good suitable as a pharmaceutical, cosmetic, for specialized optical uses, for nuclear grade uses, etc.

Mixing or blending. A good of chapters 30, 31, or 33 through 38, except for heading 3808, if the deliberate and proportionally controlled mixing or blending (including dispersing) of materials to conform to predetermined specifications result in the production of a good having certain characteristics relevant to the good's uses or purposes and are different from the input materials.

Modification in particle size. A good of chapters 30, 31, or 33, if the deliberate and controlled modification in particle size of the good results in a good having a defined particle size, defined particle size distribution, or defined surface area, which are relevant to the good's uses or purposes and are different from the input materials.

Production of standards materials. A good of chapters 28 through 38 if the production of standards occurs in the territory of Chile, the U.S. or both. Standards materials (including standard solutions) are preparations suitable for analytical, calibrating or referencing uses, having precise degrees of purity or proportions that are certified by the manufacturer.

Isolation or separation of isomers. A good of chapters 28 through 38 if the isolation or separation of isomers from mixtures of isomers occur in the territory of Chile, the U.S. or both.

Separation of materials from man-made mixtures. A good that undergoes a change from one classification to another as a result of the separation of one or more materials from a man-made mixture will not be treated as an originating good unless the isolated material underwent a chemical reaction.

Deletes Rule 1 on Chemical Reactions from Chapters 27 - 38

The Proclamation modifies HTS General Note 26 subdivision (n) which lists the change in tariff classification and value content requirements that certain goods must satisfy to be an originating good by deleting Chapter Rule 1 for each of the chapters 27 through 38. This rule stated that any good of these chapters that is a product of a chemical reaction, as defined in subdivision (m)(vi), will be considered to be an originating good if the chemical reaction occurred in the territory of Chile or of the U.S.

Also Modifies Tariff Classification Rules for Spices, Coffee, Machinery, Etc.

The Proclamation also expands or replaces the tariff classification rules (TCRs) in subdivision (n) for various products in the following chapters:

• Chapter 7 (Edible Vegetables and Certain Roots and Tubers)
• Chapter 9 (Coffee, Tea, Maté and Spices)
• Chapter 12 (Oil Seeds and Oleaginous Fruits; Miscellaneous Grains, Seeds and Fruits; Industrial or Medicinal Plants; Straw and Fodder)
• Chapter 18 (Cocoa and Cocoa Preparations)
• Chapter 21 (Miscellaneous Edible Preparations)
• Chapter 40 (Rubber and Articles Thereof)
• Chapter 71 (Natural or Cultured Pearls, Precious or Semi-Precious Stones, Precious Metals, Metals Clad with Precious Metal and Articles Thereof; Imitation Jewelry; Coin)
• Chapter 84 (Nuclear Reactors, Boilers, Machinery and Mechanical Appliances; Parts Thereof)
• Chapter 86 (Railway or Tramway Locomotives, Rolling-Stock And Parts Thereof; Railway or Tramway Track Fixtures and Fittings and Parts Thereof; Mechanical (Including Electro-Mechanical) Traffic Signaling Equipment of All Kinds)
• Chapter 90 (Optical, Photographic, Cinematographic, Measuring, Checking, Precision, Medical or Surgical Instruments and Apparatus; Parts and Accessories Thereof)

¹If the processes occur in the territory of Chile, the U.S., or both.

²The new text clarifies that the three listed incidents in (m)(vi)(C) are not considered to be chemical reactions for the purposes of determining whether a good is originating (and not, as previously stated, for the purposes of general note 26. These incidents include (1) dissolution in water or in another solvent; (2) the elimination of solvents, including solvent water; or (3) the addition or elimination of water of crystallization.