CLA-2 RR:CR:TE 962122 jb
Alastair Moran
Livingston Trade Services
405 The West Mall
Toronto, Ontario
CANADA M9C 5K7
RE: Classification of cushions; eligibility under the North
American Free Trade Agreement (NAFTA) and Tariff Preference
Levels (TPL); country of
origin
Dear Mr. Moran:
This is in response to your letter, dated May 7, 1998, on
behalf of your client, Sure Fit Home Furnishings Ltd., requesting
classification under the Harmonized Tariff Schedule of the United
States (HTSUS), and country of origin determinations for certain
curtains, valances and cushions. You also request whether the
merchandise is eligible for treatment under the North American
Free Trade Agreement (NAFTA) or for consideration under the
Tariff Preference Levels (TPL).
Our New York office issued to you NY C89713, dated August 3,
1998, wherein the classification, origin, NAFTA and TPL
eligibility for the curtains and valances was addressed. As
such, this letter will only address the remaining merchandise,
that is, the cushions.
FACTS:
You state in your letter that the cushions will be made from
a 50 percent polyester/50 percent cotton plain woven printed
fabric. Once the fabric for the outershell is imported into
Canada, the fabric will be cut into the following sizes: 15
inches by 15 inches, 16 inches by 16 inches, 19 inches by 19
inches, and 20 inches by 20 inches. The fabric weighs
approximately 101 grams per square meter and the cushions will be
stuffed with either a blend of 50 percent cotton, 40 percent
polyester and 10 percent other fibers, or a mostly polyester fill
(we note that in your letter you only account for 80 percent of
the polyester material and no indication is given as to the
composition of the remaining 20 percent).
The manufacturing operations are as follows:
Scenario I
Pakistan
50 percent polyester/50 percent cotton shell fabric is woven
and printed
Taiwan
chief weight polyester filling material is made
Canada
fabrics are cut, sewn and assembled into cushions
Scenario II
Pakistan
50 percent polyester/50 percent cotton shell fabric is woven
and printed
Canada
50 percent cotton, 40 percent polyester and 10 percent other
filling material is made
fabrics are cut, sewn and assembled into cushions
ISSUE:
1. What is the proper classification for the subject
merchandise?
2. What is the country of origin of the subject
merchandise?
3. Does the merchandise qualify for NAFTA?
4. Does the merchandise qualify for consideration under the
Tariff Preference Levels?
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 9404, HTSUS, provides for, among other things,
articles of bedding and similar furnishings. Although size
specifications are not explicitly outlined in the terms of
heading 9404, HTSUS, Customs has held that so long as
pillows/cushions are sufficient in size and stuffing to be
capable of providing support, classification in heading 9404,
HTSUS, is appropriate. Accordingly, it is the opinion of this
office that the subject cushions are adequate in size to provide
support and thus, are properly classified in heading 9404, HTSUS.
As the subject cushions are composed of a mixture of textile
materials, that is, a woven outershell fabric consisting of a
blend of 50 percent polyester and 50 percent cotton, and textile
fiberfill, we look to Additional U.S. Rule of Interpretation
1(d), which states:
the principles of section XI regarding mixtures of two or
more textile materials shall apply to the classification of
goods in any provision in which a textile material is named.
Subheading Note 2 to Section XI, HTSUSA, states:
(A) Products of chapters 56 to 63 containing two or more
textile materials are to be regarded as consisting
wholly of that textile material which would be selected
under note 2 to this section for the classification of
a product of chapters 50 to 55 consisting of the same
textile materials.
(B) For the application of this rule:
(a) Where appropriate, only the part which determines
the classification under general interpretative
rule 3 shall be taken into account;
* * *
Note 2 to Section XI, HTSUSA, states:
(A) Goods classifiable in chapters 50 to 55 or in heading
5809 or 5902 and of a mixture of two or more textile
materials are to be classified as if consisting wholly
of that one textile material which predominates by
weight over each other single textile material.
When no one textile material predominates by weight,
the goods are to be classified as if consisting wholly
of that one textile material which is covered by the
heading which occurs last in numerical order among
those which equally merit consideration.
In the case of the subject merchandise, for purposes of
classification, the printed outershell fabric is the component
that provides the essential character to the cushions. If the
outershell fabric of the subject merchandise were composed of
either cotton or polyester, the applicable provisions would be
subheadings 9404.90.1000 (cotton) or 9404.90.2000 (other).
However, as the subject merchandise is composed of a blend of 50
percent cotton and 50 percent polyester fabric, as per the above
referenced notes, no one textile material predominates by weight,
and the cushions are classified in subheading 9404.90.2000,
HTSUSA, based on the heading which occurs last in numerical
order, in this case, "other".
We would like to note however, that the classification
determination rendered is based on the fiber content you have
submitted to us, that is, a precise parity in the cotton and
polyester blend of the fabric. Even a slight change in the fiber
content may result in a change in the classification and the
applicable quota/visa restrictions. As such, Customs may subject
the cushions to laboratory analysis at the time of importation.
In that respect, we advise you to inform Customs of any changes
in the fabric composition of the subject merchandise or risk
reclassification by Customs.
North American Free Trade Agreement Eligibility
The subject cushions undergo 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 North American Free Trade Agreement (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 cushions at issue will be eligible for the
"Special" "CA" rate of duty provided they are NAFTA "originating"
goods under General Note 12(b), Harmonized Tariff Schedule of the
Unites States Annotated (HTSUSA), and they qualify to be marked
as goods 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
* * *
Accordingly, the subject cushions qualify 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 (the fabrics
formed in Pakistan, and in the case of scenario I, the filling
made in Taiwan) undergo a change in tariff classification as
described in subdivision (t).
As the cushions are classifiable in subheading 9404.90.2000,
HTSUSA, subdivision (t), Chapter 94, rule 7, applies. That note
states:
A change to subheading 9404.90 from any other chapter,
except from headings 5007, 5111 through 5113, 5208 through
5212, 5309 through 5311, 5407 through 5408 or 5512 through
5516.
When the fabric for the subject cushions leaves Pakistan it
falls within headings 5512 through 5516, HTSUS. As headings
5512 through 5516 are excepted by subdivision (t), chapter 94,
rule 7, the fabric does not meet the terms of the note.
Accordingly, the subject merchandise is not eligible for NAFTA
treatment.
In your letter you refer to HQ 959834, dated October 9,
1996, wherein pillows which were manufactured in Canada (through
the operations of stuffing the pillow and comforter shells with
the polyester filling and sewing the fourth side to form the
completed pillows and comforters) from poly/cotton shells
produced in Pakistan were determined to qualify for the NAFTA
based on the appropriate tariff shift. You inquire whether this
ruling "still stands" and if rather than importing the fabric in
bulk, cushion shells are imported into Canada, will this result
in a different determination? In answer to your question, HQ
959834 has neither been modified nor revoked and thus is still
representative of Customs position with respect to the facts and
merchandise stated in that ruling. In that respect, if the
subject cushions are similarly manufactured, such that cushion
shells (classifiable in heading 6307) are imported into Canada,
heading 6307 is not excepted by subdivision (t), and thus the
merchandise would undergo the requisite change in tariff,
qualifying the merchandise for the NAFTA preference.
Tariff Preference Levels
Additional U.S. Note 4(a) states:
The rate of duty in the "Special" subcolumn of rates of duty
column 1 followed by the symbol "CA" in parentheses shall
apply to imports from Canada, up to the annual quantities
specified in subdivision (c) of this note, of cotton or man-made fiber fabric and cotton or man-made fiber made-up
textile goods provided for in chapters 52 through 55
(excluding goods containing 36 percent or more by weight of
wool or fine animal hair), 58, 60 and 63, 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,
and to goods of subheading 9404.90 that are finished and cut
and sewn or otherwise assembled from fabrics of subheadings
5208.11 through 5208.29, 5209.11 through 5209.29, 5210.11
through 5210.29, 5211.11 through 5211.29, 5212.11, 5212.12,
5212.21, 5212.22, 5407.41, 5407.51, 5407.71, 5407.81,
5407.91, 5408.21, 5408.31, 5512.11, 5512.21, 5512.91,
5513.11 through 5513.19, 5514.11 through 5514.19, 5516.11,
5516.21, 5516.31, 5516.41 or 5516.91 produced or obtained
outside the territory of one of the NAFTA parties.
As per the terms of Additional U.S. Note 4(a), the subject
cushions, which are made of a printed fabric (subheading 5513.41,
HTSUS) not classifiable under any of the listed subheadings, are
not eligible for the tariff preference levels.
Country of Origin
On December 8, 1994, the President signed into law the
Uruguay Round Agreements Act. Section 334 of that Act (codified
at 19 U.S.C. 3592) provides new rules of origin for textiles and
apparel entered, or withdrawn from warehouse, for consumption, on
and after July 1, 1996. On September 5, 1995, Customs published
Section 102.21, Customs Regulations, in the Federal Register,
implementing Section 334 (60 FR 46188). Thus, effective July 1,
1996, the country of origin of a textile or apparel product shall
be determined by sequential application of the general rules set
forth in paragraphs (c)(1) through (5) of Section 102.21.
In your letter you state that "the cushions, because they
are classified in HTSUS 9404.90.20, are not " textile products"
as that term is defined in 19 CFR 102.21(b)(5), and thus are
subject to different rules for determining the country of
origin." You are correct in stating that as written the listed
headings and subheadings under 19 CFR 102.21(b)(5), fail to
include subheading 9404.90.20, HTSUS, for purposes of the section
102.21 rules of origin. However, it is Customs position that the
omission of subheading 9404.90.20, HTSUS, was an oversight. In
that respect we direct your attention to the statute pertaining
to the rules of origin, 19 U.S.C. section 3592, which states
explicitly under (b)(2), Special rules, that:
(A) the origin of a good that is classified under one of
the following HTS headings or subheadings shall be
determined under subparagraph (A), (B), or (C) of
paragraph (1), as appropriate: 5609, 5807, 5811,
6209.20.50.40, 6213, 6214, 6301, 6302, 6303, 6304,
6305, 6306, 6307.10, 6307.90, 6308, or 9404.90; and
(Emphasis added)
As the statute does not break out subheading 9404.90, HTSUS, it
is Customs position that the statute takes precedence over the
regulation. That is to say, Customs cannot exclude by regulation
what is specifically included by statute. Accordingly, in
determining the origin of the subject cushions, the 102.21 rules
of origin are applicable.
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 the
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:"
9404.90 The country of origin of a good classifiable
under subheading 9404.90 is the country,
territory, or insular possession in which the
fabric comprising the good was formed by a
fabric-making process.
The subject cushions are classified in subheading 9404.90,
(HTSUS). In the scenarios you describe in your letter, as the
cushions consist of fabric sourced in a single country, Pakistan,
the country of origin of the subject merchandise is Pakistan.
HOLDING:
The subject cushions are classified in subheading
9404.90.2000, HTSUSA, which provides for: "[m]attress supports;
articles of bedding and similar furnishing (for example,
mattresses, quilts, eiderdowns, cushions, pouffes and pillows)
fitted with springs or stuffed or internally fitted with any
material or of cellular rubber or plastics, whether or not
covered: other: pillows, cushions and similar furnishings:
other." The applicable rate of duty is 6 percent ad valorem.
The subject merchandise is not eligible for NAFTA treatment
and does not qualify for a TPL.
The country of origin for the subject merchandise is
Pakistan.
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 negotiations 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 issuance
of the U.S. Customs Service, which is updated weekly and is
available at the 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, you should contact the 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