CLA-2 RR:TC:TE 960524 jb
Thomas Penksa
PBB Group
434 Delaware Ave.
Buffalo, NY 14202
RE: Classification and country of origin determination for a
mattress and pillow cover; 19 CFR 102.21(c)(5); last country
in which an important assembly or
manufacturing process occurs; NAFTA
eligibility; Article 509
Dear Mr. Penksa:
This is in reply to your letter dated March 18, 1997,
supplemented by additional information on April 10, 1997, on
behalf of your client, Bay Street Manufacturing, requesting a
classification and country of origin determination for mattress
and pillow covers which will be imported into the United States.
Samples were submitted to this office for examination.
FACTS:
The subject merchandise consists of a waterproof mattress
cover and a pillow cover which are stated to be specifically
designed to help asthma and allergy sufferers by forming a
barrier between them and the dust mites, bacteria and other
allergens which embed themselves in mattresses and pillows. Both
the mattress and pillow cover consist of an outer surface made of
50 percent polyester and 50 percent cotton woven fabric, a thin
polyester batting which is quilted to the outer surface, and an
inner surface made of a knit polyester fabric coated or laminated
with vinyl. The inner layer, which is attached to the outer
quilted layer only at the side seams, creates a solid barrier
between the sleeper and the bedding by preventing the penetration
of mites, allergens and certain liquids which might be spilled on
the surface of the covers. The pillow cover features a zippered
opening along one end to allow the insertion of the pillow. The
mattress cover is attached to the mattress by a fabric skirt
(made of the same fabric as the outer surface) with elasticized
edges.
The manufacturing operations are as follows:
Pakistan
50 percent polyester/50 percent cotton woven fabric for the
outer surface is formed
United States
polyester batting is made
knit portion of the coated fabric for the inner surface is
formed
Canada
knit portion of the coated fabric for the inner surface is
coated or laminated
fabrics are cut, sewn and assembled into the completed
articles
ISSUE:
1. What is the proper classification for the subject
merchandise?
2. Whether the subject merchandise is eligible for duty
free treatment under the North American Free Trade
Agreement (NAFTA)?
3. What is the country of origin of the submitted
merchandise?
4. Can the merchandise be entered with a certificate of
eligibility under the NAFTA tariff preferential level
(TPL) rate of duty?
LAW AND ANALYSIS:
Classification
Classification of merchandise under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) is in accordance
with the General Rules of Interpretation. GRI 1 requires that
classification be determined according to the terms of the
headings and any relative section or
chapter notes. Where goods cannot be classified solely on the
basis of GRI 1, the remaining GRI will be applied, in the order
of their appearance.
Heading 6302, HTSUS, provides for, among other things, bed
linen. The Explanatory Notes to the Harmonized Commodity
Description and Coding System (EN) to heading 6302, HTSUS, in
enumerating the types of articles classified therein, state:
These articles are usually made of cotton or flax, but
sometimes also of hemp, ramie or man-made fibres, etc.; they
are normally of a kind suitable for laundering. They
include:
(1) Bed linen, e.g., sheets, pillowcases, bolster cases,
eiderdown cases and mattress covers.
Accordingly, the subject merchandise is properly classified
in heading 6302, HTSUS.
NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) ELIGIBILITY
The subject merchandise undergoes processing operations in
Canada which is a country provided for under the North American
Free Trade Agreement (NAFTA). General Note 12, HTSUSA,
incorporates Article 401 of the NAFTA into the HTSUSA. Note
12(a) provides, in pertinent part:
* * *
(i) Goods that originate in the territory of a NAFTA party
under the terms of subdivision (b) of this note and that
qualify to be marked as goods of Canada under the terms
of the marking rules... and are entered under a subheading for
which a rate of duty appears in the "Special" subcolumn
followed by the symbol "CA" in parentheses, are eligible
for such duty rate... . [Emphasis added]
Accordingly, the merchandise at issue will be eligible for the
"Special" "CA" rate of duty provided it is a NAFTA "originating"
good under General Note 12(b), HTSUSA, and it qualifies to be
marked as a good of Canada. Note 12(b) provides in pertinent
part,
For the purposes of this note, goods imported into the
customs territory of the United States are eligible for the
tariff treatment and quantitative limitations set forth in
the tariff schedule as "goods originating in the territory
of a NAFTA party" only if--
(i) they are goods wholly obtained or produced entirely in
the territory of Canada, Mexico and/or the United States;
or
(ii) they have been transformed in the territory of
Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this note,
each of the non-originating materials used in
the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and
(t) of this note or the rules set forth therein,
or
(B) the goods otherwise satisfy the applicable
requirements of subdivisions (r), (s) and (t) where
no change in tariff classification is required, and the goods
satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory
of Canada, Mexico and/or the United States exclusively
from originating materials; or
* * *
The subject merchandise qualifies for NAFTA treatment only
if the provisions of General Note 12(b)(ii)(A) are met, that is,
if the merchandise is transformed in the territory of Canada so
that the non-originating material undergoes a change in tariff
classification as described in subdivision (t).
The mattress cover and pillow cover are classified in
subheading 6302.32.2060, HTSUSA. For heading 6302, HTSUS,
subdivision (t), Chapter 63, rule 1, states that:
A change to headings 6301 through 6302 from any other
chapter, except from headings 5106 through 5113, 5204
through 5212, 5307 through 5308 or 5310 through 5311,
chapters 54 through 55, or headings 5801 through 5802 or
6001 through 6002, provided that the good is both cut (or
knit to shape) and sewn or otherwise assembled in the
territory of one of more of the NAFTA parties.
In the case of the subject merchandise the 50 percent
polyester/50 percent cotton fabric for the outer surface is
classified in heading 5513, HTSUS. As the fabric is formed in
Pakistan, it is considered a non-originating material. As
chapter 55, HTSUS, is excepted by rule 1 to chapter 63, the
fabric from Pakistan does not undergo the requisite change in
tariff classification. Accordingly, the merchandise is not
eligible for the NAFTA preference.
As per Additional U.S. Note 4(a) to Section XI, HTSUS, goods
of chapter 63, HTSUS, that are woven or knit in the territory of
a NAFTA party from yarn produced or obtained outside the
territory of one of the NAFTA parties, or knit in the territory
of a NAFTA party from yarn spun in the territory of a NAFTA party
from fiber produced or obtained outside the territory of one of
the NAFTA parties, are eligible for the rate of duty in the
"Special" column of rates of duty column 1 followed by the symbol
"CA" in parentheses. In the case of the subject merchandise, the
fabric is not woven or knit in the territory of a NAFTA party
from yarn produced outside the NAFTA parties or knit in the NAFTA
territory from yarn spun in the NAFTA territory from fiber
produced outside the NAFTA territory. Accordingly, the covers do
not meet the terms of Additional U.S. Note 4(a) to Section XI and
thus do not qualify for the NAFTA tariff preferential level rate
of duty.
Country of origin
On September 5, 1995, Customs published in the Federal
Register (60 FR 46188) T.D. 95-69 which set forth final
amendments to the Customs Regulations to implement the provisions
of section 334(b) of the Uruguay Round Agreements Act ("the
Act"), Public Law 103-465, 108 Stat. 4809, hereinafter 19 U.S.C.
3592, regarding the country of origin of textile and apparel
products. These final regulations apply to goods entered, or
withdrawn from warehouse, for consumption on or after July 1,
1996. The regulatory provisions in T.D. 95-69 that implement the
basic origin principles of section 334(b) of the Act are
contained in a new 102.21 of the Customs Regulations (19 CFR
102.21).
The final rule for the rules for determining country of
origin of a good for purposes of Annex 311 of the NAFTA was
published by Customs on June 6, 1996, in the Federal Register (61
FR 28932). Therein it was stated, in pertinent part:
New 102.21 was modeled on the approach taken in the
interim Part 102 texts as published in T.D. 94-4 and thus
incorporates a general statement of applicability (paragraph
(a)), various definitions (paragraph (b)), general origin
rules (paragraphs (c) and (d)), and specific tariff shift
and/or other requirements (paragraph (e)) that apply under
the second general rule. Of particular note for purposes of
the present document is the definition of "textile or
apparel product" in 102.21(b)(5) which delineates the class
of goods covered by the 102.21 rules. That definition
identifies those goods with reference to classification in
the HTSUS and refers to Chapters 50 through 63 (that is, all
of Section XI) of the HTSUS as well as to specific headings
and 6-, 8- or 10-digit subheadings of the HTSUS that fall
outside Section XI. Thus, if a good is classifiable in an
HTSUS provision listed in 102.21(b)(5), precedence must be
given to the 102.21 rules over any other regulatory
provision with regard to that good, including any origin
rules contained elsewhere in part 102.
Accordingly, as the subject merchandise is classified in heading
6302, HTSUS, textile articles identified by 102.21(b)(5), the
102.21 rules take precedence over any other rules of origin to
determine the appropriate country of origin.
Paragraph (c)(1) states that "The country of origin of a
textile or apparel product is the single country, territory, or
insular possession in which the good was wholly obtained or
produced." As the subject merchandise is not wholly obtained or
produced in a single country, territory or insular possession,
paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (c)(2) states that "Where the country of origin of
a textile or apparel product cannot be determined under paragraph
(c)(1) of this section, the country of origin of the good is the
single country, territory, or insular possession in which each
foreign material incorporated in that good underwent an
applicable change in tariff classification, and/or met any other
requirement, specified for the good in paragraph (e) of this
section".
Paragraph (e) states that "The following rules shall apply
for purposes of determining the country of origin of a textile or
apparel product under paragraph (c)(2) of this section":
6301-6306 The country of origin of a good classifiable under
heading 6301 through 6306 is the country,
territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
As the subject merchandise is comprised of fabric sourced in
more than one country, Section 102.21(c)(2) is not applicable to
this merchandise.
Paragraph (c)(3) states that, "Where the country of origin
of a textile or apparel product cannot be determined under
paragraph (c)(1) or (2) of this section":
(i) If the good was knit to shape, the country of origin of
the good is the single country, territory, or insular
possession in which the good was knit; or
(ii) Except for goods of heading 5609, 5807, 5811,
6213, 6214, 6301 through 6306, and 6308, and subheadings
6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a
single country, territory, or insular possession, the
country of origin of the good is the country, territory, or
insular possession in which the good was wholly assembled.
As this merchandise is not knit to shape and heading 6302,
HTSUS, is excepted from provision (ii), paragraph (c)(3) is
inapplicable.
Paragraph (c)(4) states that, "Where the country of origin
of a textile or apparel product cannot be determined under
paragraph (c) (1), (2) or (3) of this section, the country of
origin of the good is the single country, territory, or insular
possession in which the most important assembly or manufacturing
process occurred". In the case of the subject merchandise the
most important manufacturing operation occurs at the time of
fabric formation. As the fabric formation for this merchandise
occurs in more than one country, and no one fabric is more
important than the other, paragraph (c)(4) is not applicable to
this merchandise.
Paragraph (c)(5) states that, "Where the country of origin
of a textile or apparel product cannot be determined under
paragraph (c) (1), (2), (3) or (4) of this section, the country
of origin of the good is the last country, territory or insular
possession in which an important assembly or manufacturing
process occurred". Accordingly, in the case of the subject
mattress cover and pillow cover, the country of origin is
conferred in the last country in which an important assembly or
manufacturing process occurred, that is, Canada.
HOLDING:
The subject merchandise, mattress cover and pillow cover,
are classified in subheading 6302.32.2060, HTSUSA, which provides
for, bed linen, table linen, toilet linen and kitchen linen:
other bed linen: of man-made fibers: other: other: other. The
applicable rate of duty is 12.5 percent ad valorem and the quota
category is 666.
The country of origin of the subject merchandise is Canada.
The subject merchandise does not qualify for preferential
duty treatment under the NAFTA. The Tariff Preference Levels do
not apply to this merchandise.
The designated textile and apparel category may be
subdivided into parts. If so, visa and quota requirements
applicable to the subject merchandise may be affected. Since
part categories are the result of international bilateral
agreements which are subject to frequent renegotiations and
changes, to obtain the most current information available, we
suggest that you check, close to the time of shipment, the Status
Report on Current Import Quotas (Restraint Levels), an internal
issuance of the U.S. Customs Service, which is available for
inspection at your local Customs office.
Due to the changeable nature of the statistical annotation
(the ninth and tenth digits of the classification) and the
restraint (quota/visa) categories applicable to textile
merchandise, you should contact your local Customs office prior
to importing the merchandise to determine the current status of
any import restraints or requirements.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request. This position is clearly set forth in section 19 CFR
177.9(b)(1). This section states that a ruling letter is issued
on the assumption that all of the information furnished in the
ruling letter, either directly, by reference, or by implication,
is accurate and complete in every material respect.
Should it be subsequently determined that the information
furnished is not complete and does not comply with 19 CFR
177.9(b)(1), the ruling will be subject to modification or
revocation. In the event there is a change in the facts
previously furnished, this may affect the determination of
country of origin. Accordingly, if there is any change in the
facts submitted to Customs, it is recommended that a new ruling
request be submitted in accordance with 19 CFR 177.2.
Sincerely,
John Durant, Director
Commercial Rulings Division