CLA-2-RR:NC:TA:351 D84393
Mr. Miguel Dancausse
ME ME International
6123 Harbor View Lane
Greensboro, NC 27410
RE: Classification and country of origin determination for
braided yarn; 19 CFR 102.21(c)(2); applicable change in
tariff classification; 19 CFR 12.130
Dear Mr. Dancausse:
This is in reply to your letter received November 6, 1998,
requesting a classification and country of origin determination
for braided yarn which will be imported into the United States.
FACTS:
The subject merchandise is braid; 100 percent cotton braid
and 100 percent nylon braid. You submitted samples of the
different braids you intend to import from Costa Rica. They were
manufactured from either cotton or nylon filament yarn.
The manufacturing operations for the braid are as follows:
cotton yarn which is spun in the United States, and nylon yarn
which is extruded in the United States, is sent to Costa Rica.
In Costa Rica the yarn is re-bobbined so that it can be
accommodated by the machine which will rebraid the yarn into flat
braids of varying dimensions, per the samples submitted. The
braid will then be packaged and returned to the United States.
ISSUE:
What is the classification and country of origin for the
subject merchandise? Is the merchandise entitled to treatment
under the Caribbean Basin Initiative?
CLASSIFICATION:
The applicable subheading for the braid will be 5808.10.70,
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA), which provides for braid in the piece, other, of cotton
or man-made fiber. The rate of duty will be 8 percent ad
valorem.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
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apparel entered, or withdrawn from warehouse, for consumption, on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.
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 of
the foreign material incorporated in that good underwent an
applicable change in tariff classification,m and/or met any other
requirment, specified for the good in paragraph (e) of this
section".
As there is no foreign material being incorporated into the
subject good, paragraph (c)(2) is inapplicable.
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 in which the good was wholly assembled.
As the braid was formed by means of a manufacturing and not
an assembly process, paragraph (c)(3) is inapplicable. (HQ
555594 of May 16, 1990, noted).
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 this instance we have two manufacturing processes
involved: either spinning/extruding the cotton or nylon into yarn
in the United States and braiding in Costa Rica.
19 U.S.C. 1334(b)(1)(B) states: "(b) PRINCIPALS. - (1) IN
GENERAL. - Except as otherwise provided for by statute, a textile
or apparel product for purposes of the customs law and the
administration of quantitative restrictions, originate in a
country, territory or insular possession, and is the growth,
product, or manufacture of that country, territory, or insular
possession, if - ...(B) the product is a yarn, thread, twine,
cordage, rope, cable or braiding and -(i) the constituent staple
fibers are spun in that country, territory, or possession, or
(ii) the continuous filament is extruded in that country,
territory, or possession."
Based upon the above, the country of origin of the braid
would seem to be the United States.
However, there is an exception to products from the United
States that are sent abroad for processing. Customs Regulations,
Section 12.130 (c) (1) states:
"Chapter 98, Subchapter II, Note 2, Harmonized Tariff Sched ule of the United States, provides that any product of the U.S. which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article for the purposes of the Tariff Act of 1930, as amended. In order to have a single definition of the term product of' and, therefore, a single
country of orig in for a textile or textile product, notwithstanding paragraph (b), merchandise which falls within the purview of Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, may not, upon its return to the U.S., be considered a product of the U.S."
For the case of yarn of U.S. origin which is braided in Costa
Rica, ( advanced in value...improved in condition abroad'), Costa
Rica becomes the originating country.
You inquired if the braid would be entitled to treatment
under the provisions of the Caribbean Basin Initiative. Although
Costa Rica is one of the countries included in the Caribbean
Basin Initiative, General Note 3(a)(iii) of the Harmonized Tariff
Schedule of the United States provides the following:
"The "Special" subcolumn reflects rates of duty under one or
more special tariff treatment programs described in
paragraph (c) of this note and identified in parentheses
immediately following the duty rate specified in such
subcolumn. These rates apply to those products which are
properly classified under a provision for which a special
rate is indicated and for which all of the legal
requirements for eligibility for such program or programs
have been met. Where a product is eligible for special
treatment under more than one program, the lowest rate of
duty provided for any applicable program shall be imposed.
Where no special rate of duty is provided for a provision,
or where the country from which a product otherwise eligible
for special treatment was imported is not designated as a
beneficiary country under a program appearing with the
appropriate provision, the rates of duty in the "General"
subcolumn of column 1 shall apply."
Heading 5808.10 does not have a special rate indicator in the
"Special" subcolumn for the Caribbean Basin Initiative.
Therefore, the general rate of duty in column 1 of 8 percent ad
valorem shall apply.
HOLDING:
The country of origin of both the cotton and nylon braid is
Costa Rica. The rate of duty set forth in column 1 shall apply.
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 sections states that a ruling letter, either
directly, by reference, or by implication, is accurate and
complete in every material respect.
This ruling is being issued under the provisions of Part 177
of the Customs Regulations (19 C.F.R. 177). 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.
A copy of the ruling or the control number indicated above
should be provided with the entry documents filed at the time
this merchandise is imported. If you have any questions
regarding the ruling, contact National Import Specialist Camille
Ferraro at 212-466-5885.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division