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Packaging for Retail Sale

In the NAFTA, packaging and packing are used in different contexts. Packaging is used when referring to retail sale while packing is for shipping purposes. Packaging materials and containers in which goods are packaged for retail sale, if classified with the goods, are disregarded in determining whether all the non-originating materials used in the production of the goods undergo the applicable change in tariff classification set out in Annex 401. However, if the goods are subject to a regional value-content requirement, the value of the retail packaging materials and containers is taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the goods.

Leather footwear (HTS 64.03) is made in Mexico. The shoes are wrapped in tissue paper and packed in cardboard boxes described with the brand logo for retail sale; both the tissue paper and the cardboard box are of Brazilian origin. The Annex 401 origin criterion for 64.03 is:
  • A change to heading 64.01 through 64.05 from any heading outside that group, except from subheading 6406.10, provided there is a regional value content of not less than 55 percent under the net cost method.

Although the tissue paper and cardboard box are disregarded for purposes of the tariff change, their value must be counted as non-originating when calculating the regional value content.

 

Last modified: 
May 28, 2014
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