CLA-2 RR:CR:TE 966062 jsj
Mr. Herbert J. Lynch
Sullivan & Lynch, P.C.
156 State Street
Boston, Massachusetts
02109-2508
Re: Classification; Laminated Warp Knit Pile Fabric; Subheading 6001.22.0000, HTSUSA; Chapter 60, Note 1(c); Chapter 59, Note 1; Country of Origin; 19 C.F.R. 102.21 (c)(2).
Dear Mr. Lynch:
The purpose of this correspondence is to respond to your request dated March 6, 2002, directed to the National Commodity Specialist Division. The correspondence in issue requested, on the behalf of your client, Velcro USA, Inc., a binding classification and country of origin ruling of the merchandise described as laminated warp knit fabric.
This ruling is being issued subsequent to the following: (1) A review of your submission dated March 6, 2002; (2) A review of the Customs Service laboratory report number: NY 20020351, dated May 28, 2002; and (3) An examination of the base fabric sample and the laminated fabric sample.
FACTS
The article in issue, identified as laminated warp knit fabric, is formed by laminating a sheet of plastic to a two bar warp knit fabric. The Customs Service Office of Laboratory and Scientific Services, subsequent to examining samples, reported that the lapping movement of the two guide bars moving in unison in the same direction produced an unstable construction with inclined loops.
The lapping movements of the front bar is expressed as 1/0, 1/2, with the lapping movements of the back bar expressed as 1/0, 3/4. The back bar, which pulls the yarn over two rows of stitches before forming a knit stitch, is adjusted in the formation of this fabric to provide less tension. The result is the production of a float that projects upward from the surface of the fabric. The projection of the looped float created by the back guide bar is entirely a function of its relative tension and not any process subsequent to knitting. The fabric has not been brushed.
The yarn used in the formation of the Velcro® fabric is 100 % nylon. It weighs approximately 72.2 grams per square meters. It will be imported in 101.6 centimeter widths. The fabric, subsequent to formation, is laminated with a sheet of polypropylene plastic that is visible to the naked eye. The plastic sheeting is imprinted with differing designs, including those of animals, in different colors.
The production of the finished Velcro® product, the laminated warp knit fabric, is undertaken in the following countries:
Spain: The nylon warp knit fabric is formed on warp knitting machines in rolls that are sixty inches wide.
Germany: The warp knit fabric, subsequent to export from Spain to Germany, is laminated with polypropylene film that had previously been decorated with water-based acrylic motifs appealing to children.
The Customs Service has not been advised whether the nylon yarn is extruded in Spain or whether the polypropylene film is produced in Germany.
ISSUE
What is the classification, pursuant to the Harmonized Tariff Schedule of the United States Annotated, of the above-described laminated warp knit fabric?
What is the country of origin of the laminated warp knit fabric that is knitted in Spain and laminated in Germany ?
LAW AND ANALYSIS
Classification
The federal agency responsible for initially interpreting and applying the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is the U.S. Customs Service. The Customs Service, in accordance with its legislative mandate, classifies imported merchandise pursuant to the General Rules of Interpretation (GRI) and the Additional U.S. Rules of Interpretation.
General Rule of Interpretation 1 provides, in part, that classification decisions are to be “determined according to the terms of the headings and any relative section or chapter notes.” General Rule of Interpretation 1. General Rule of Interpretation 1 further states that merchandise which cannot be classified in accordance with the dictates of GRI 1 should be classified pursuant to the other General Rules of Interpretation, provided the HTSUSA chapter headings or notes do not require otherwise. According to the Explanatory Notes (EN), the phrase in GRI 1, “provided such headings or notes do not otherwise require,” is intended to “make it quite clear that the terms of the headings and any relative Section or Chapter Notes are paramount.” General Rules for the Interpretation of the Harmonized System, Rule 1, Explanatory Note (V).
The Explanatory Notes constitute the official interpretation of the Harmonized System at the international level. See Joint Explanatory Statement supra note 1, at 549. The Explanatory Notes, although neither legally binding nor dispositive of classification issues, do provide commentary on the scope of each heading of the HTSUS. The EN’s are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989); Lonza, Inc. v. United States, 46 F. 3d 1098, 1109 (Fed. Cir. 1995).
Commencing classification of the laminated warp knit fabric, in accordance with the dictates of GRI 1, the Customs Service examined the headings of the HTSUSA. Heading 6001, HTSUSA, provides for the classification of “[p]ile fabrics, including ‘long pile’ fabrics and terry fabrics, knitted or crocheted.” The principle issue to be addressed by Customs in the classification of this fabric is whether the fabric is “pile.” The Explanatory Notes and prior Customs Service ruling letters assist in resolving this question. Explanatory Note 60.01 provides, in part:
Unlike the woven fabrics of heading 58.01, the products of this heading are obtained by knitting. The following methods of production are those mainly used:
a circular knitting machine produces a knitted fabric in which, by means of an additional yarn, protruding loops are formed; afterwards the loops are cut to form pile and thus give a velvet-like surface;
a special warp knitting machine knits two fabrics face to face with a common pile yarn; the two fabrics are then separated by cutting to produce two knitted fabrics with a cut pile;
textile fibres from a carded sliver are inserted into the loops of a knitted ground fabric as it is formed (“long pile” fabrics);
textile yarn to form loops (“imitation terry fabrics”) (see General Explanatory Note). Such fabrics have rows of chain stitches on the back of the fabric and they differ from the pile facrics of heading 58.02, which are characterised by rows of stitches having the appearance of running stitches along the length of the back of the fabric. (Emphasis added).
Customs, relying on EN 60.01, has previously concluded that the processes enumerated in the EN are illustrative, rather than exclusive. The EN specifically states that the methods of production listed are those “mainly used” in the formation of “pile” fabric.
The determinative factor with regards to whether fabric is considered to be “pile” fabric is whether the process utilized results in the production of a fabric with raised loops, not whether the fabric-making process is listed in the Explanatory Note. As stated in HQ 951374 (Oct. 30, 1992), “if during the weaving or knitting of a fabric, yarns are caused to project from the surface(s) (i.e., the base material) of that fabric creating a ‘pile’ appearance, that fabric will be considered a pile fabric for the purposes of the HTSUSA….” The Velcro® fabric subject to this classification ruling comports with the requirement that yarns project from the surface of the fabric as the result of the fabric-making process resulting in the production of a “pile” fabric. See generally HQ 953303 (April 9, 1993); HQ 953942 (May 7, 1993).
Chapter 60, Note 1(c) provides, with a single exception, that knitted or crocheted fabrics that are impregnated, coated, covered or laminated are classified in Chapter 59, HTSUSA,. The exception set forth in Chapter 60, Note 1(c) states that knitted or crocheted pile fabrics that are impregnated, coated, covered or laminated remain classified in heading 6001, HTSUSA. The Velcro® fabric falls within the exception to Chapter 60, Note 1(c), as it is both a knit pile fabric and laminated. It is, therefore, classified in heading 6001, HTSUSA.
Continuing the classification of the Velcro® laminated warp knit pile fabric, the fabric is classified in subheading 6001.22.0000, HTSUSA. Subheading 6001.22.0000, HTSUSA, provides for the classification of:
Pile fabrics, including “long pile” fabrics and terry fabrics, knitted or crocheted:
Looped pile fabrics:
6001.22.0000 Of man-made fibers.
Counsel for the importer suggests that the fabric is properly classified in heading 5903, HTSUSA. Heading 5903, HTSUSA, provides for the classification of “[t]extile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902.” The phrase “textile fabrics” in heading 5903, HTSUSA, is defined in Chapter 59, Note 1. Chapter 59, Note 1 states that “[e]xcept where the context otherwise requires, for the purposes of this chapter the expression “textile fabrics” applies only to the woven fabrics of chapters 50 to 55 and headings 5803 and 5806, the braids and ornamental trimmings in the piece of heading 5808 and the knitted or crocheted fabrics of headings 6002 to 6006.” Since the Velcro® fabric is classified in heading 6001, HTSUSA, it is not a “textile fabric” for the purposes of Chapter 59 or heading 5903, HTSUSA.
Country of Origin
The Uruguay Round Agreements Act, particularly section 334, codified at 19 U.S.C. 3592, as amended by section 405 of Title IV of the Trade and Development Act of 2000, sets forth rules of origin for textile and apparel products. Customs, pursuant to legislative authority, published regulations implementing the principles set forth by Congress.
Section 102.21 of Customs regulations establishes, with specifically delineated exceptions, that “the provisions of this section shall control the determination of the country of origin of imported textile and apparel products for purposes of the Customs laws….” 19 C.F.R. 102.21. Textile and apparel products that are encompassed within the scope of section 102.21 are any goods classifiable in Chapters 50 through 63 of the HTSUSA, as well as goods classifiable under other specifically enunciated subheadings. See 19 C.F.R. 102.21 (b)(5).
The Velcro® laminated warp knit pile fabric, as previously determined, is classified in Chapter 60, HTSUSA. It is, therefore, a textile product subject to the rules of origin in 19 C.F.R. 102.21. See 19 C.F.R. 102.21 (b)(5).
The country of origin of textile and apparel products is determined by the sequential application of paragraphs (c)(1) through (c)(5) of section 102.21. Paragraph (c)(1) provides that “[t]he 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.” Since the knit fabric was formed in Spain and the polypropylene film was laminated to the fabric in Germany, the origin of the finished laminated warp knit pile fabric cannot be determined by reference to paragraph (c)(1).
Paragraph (c)(2) of section 102.21 provides that where the country of origin cannot be determined according to paragraph (c)(1), resort should next be to paragraph (c)(2). The country of origin, according to paragraph (c)(2), 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 section 102.21. Paragraph (e)(1), as applicable to the instant determination, establishes a tariff shift rule that provides:
HTSUS Tariff Shift and/or Other Requirement
6001-6006 (1) Except for fabric of wool or of fine animal hair, a change from greige fabric of heading 6001 through 6006 to finished fabric of heading 6001 through 6006 by both dyeing and printing when accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing; or,
(2) If the country of origin cannot be determined under (1) above, a change to heading 6001 through 6006 from any heading outside that group, provided that the change is the result of a fabric-making process.
Since paragraph (1) of the tariff shift requirement for heading 6001, HTSUSA, does not establish the country of origin of the laminated warp knit pile fabric Customs must examine paragraph (2).
Paragraph (2) of the tariff shift requirement necessitates inquiry into whether the nylon yarn used in the formation of the fabric is classified in a heading other than headings 6001 through 6006, HTSUSA, and whether the tariff shift to heading 6001, HTSUSA, resulted from a “fabric-making process.” Although Customs was not advised of the country where the yarn was extruded, since the fabric was formed in Spain and subsequently laminated in Germany, it is not necessary to know the country of extrusion of the yarn.
The yarn of which the Velcro® fabric is knitted is entirely nylon. Nylon yarn is classified in Chapter 54, HTSUSA. Customs Regulations define “fabric-making process” to mean “any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarns, twine, cordage, rope or fabric strips and results in a textile fabric.” 19 C.F.R. 102.21 (b)(2). Customs is cognizant that the knit pile fabric in issue is laminated. Subsequent to a thorough examination of 19 C.F.R. 102.21 and prior Customs Service ruling letters, it is the decision of this office that the lamination process, with regards to fabric classified in heading 6001, HTSUSA, does not impact the origin determination.
It is Customs decision that the process of knitting nylon yarn classified in Chapter 54, HTSUSA, into a textile fabric of heading 6001, HTSUSA, constitutes a manufacturing operation that results in the production of a textile fabric. The country of origin of the Velcro® laminated warp knit pile fabric, knitted in Spain and laminated in Germany is Spain.
HOLDING
The Velcro® laminated warp knit pile fabric is classified in subheading 6001.22.0000, Harmonized Tariff Schedule of the United States Annotated.
The General Column 1 Rate of Duty is seventeen and four-tenths (17.4) percent ad valorem.
The textile quota category is 224.
The country of origin of the laminated warp knit pile fabric, knitted in Spain and laminated in Germany is Spain.
The designated textile and apparel category may be subdivided into parts. If subdivided, any quota and visa 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 your client 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 updated weekly and is available for inspection at the local Customs Service office. The Status Report On Current Import Quotas (Restraint Levels) is also available on the Customs Electronic Bulletin Board (CEBB) which can be found on the U.S. Customs Web site at www.customs.gov.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, your client
should contact its local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division