MAR-02 RR:CR:SM 563191 AL
Category: Classification
Mr. Stan Jewell
Southern Mills, Inc.
6501 Mall Boulevard
P.O. Box 289
Union City, Georgia 30291
RE: Country of Origin; 19 U.S.C. 1304; 19 CFR Part 134; 19 CFR 102.21; NAFTA; General Note 12(l); 19 U.S.C. 3332(k); 19 CFR 181, Appendix, Part VI, Section 16(1)
Dear Mr. Jewell:
This is in response to your request for a ruling, dated January 21, 2005, on behalf of Southern Mills, Inc. (“Southern Mills”). The request concerns the country of origin of certain broadwoven fabrics to be imported into the U.S. and whether such fabrics will be eligible under the North American Free Trade Agreement (NAFTA) upon exportation to Mexico.
FACTS:
According to your letter, Southern Mills is considering to import broadwoven fabrics into the U.S. Yarns woven in the U.S. will be used to weave fabric in the U.S. These fabrics will be sent in greige form to a European Union (EU) member country where certain finishing operations will take place. You state that the fabric will be dyed, fire retardant and softening finishes will be applied, and sanforized. After these finishing operations are complete, the fabric will be re-imported into the U.S. and then, exported to Mexico. As exported from the U.S. to the EU country, the fabric is classifiable under heading 5209, Harmonized Tariff Schedule of the United States (HTSUS). The following description was provided for the fabrics imported from the EU country to the U.S.:
Fabric 1 Fabric 2 Fabric 3
HTS 5209.32.00.20 5209.32.00.20 5209.32.00.20
Fiber Content 100% Cotton 85% Cotton 85% Cotton
15% Nylon 15% Nylon
Weight 9.5 oz/yd2 7.5 oz/yd2 9.5 oz/yd2
Yarn Count No. 14/1 x 10/1 18/1 x 14/1 14/1 x 10/1
(cotton count,
warp x filling)
Thread Count 80 x 42 86 x 44 80 x 42
(Yarns/in,
warp x filling)
Weave Type 3/1 LH twill 3/1 LH twill 3/1 LH twill
Coloration (Piece) Dyed (Piece) Dyed (Piece) Dyed
ISSUE:
What is the country of origin of the imported fabric?
LAW and ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 334 of the Uruguay Round Agreements Act (19 U.S.C. 3592), provides the rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 CFR 102.21) implements section 334. Pursuant to 19 CFR 102.21, the country of origin of a textile or apparel product is determined by sequential application of the general rules set forth in paragraphs (c)(1) through (c)(5).
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, 19 CFR 102.21(c)(1) 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.” You state that the three fabrics exported from and imported to the U.S. are classifiable in heading 5209, HTSUS. Section 102.21(e) states, in pertinent part, 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”
5208-5212, HTSUS:
(1) A change from greige fabric of heading 5208 through 5212 to finished fabric of heading 5208 through 5212 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
If the country of origin cannot be determined under (1) above, a change to heading 5208 through 5212 from any heading outside that group, provided that the change is the result of a fabric-making process.
In this case, the fabrics are only dyed, but not printed in the EU country. It is our understanding that based on the information provided in your request and during our teleconference on April 26, 2005, the fabrics do not undergo any of the finishing operations listed under the tariff shift rule for headings 5208 through 5212, HTSUS. Therefore, pursuant to section 102.21(e), 5208-5212(2), the country of origin will be the U.S., where the fabrics are woven from yarns formed in the U.S.
After importation into the U.S. you state that the fabrics may be exported to Mexico. For eligibility of importation to Mexico under NAFTA, we suggest that you contact:
Secretaria de Hacienda y Credito Publico
Direccion de Politica de Ingresos y Asuntos Fiscales Internacionales
Subsecretaria de Ingresos
Av. Hidalgo No. 77, Modulo IV, 4o Piso
Col. Guerrero
Mexico, D.F., C.P. 06300
However, for your information General Note 12(l) of the HTSUS states that “[a] good shall not be considered to be an originating good by reason of having undergone production that satisfies the requirements of this note if, subsequent to that production, the good undergoes further production or any other operation outside the territories of the NAFTA parties, other than unloading, reloading or any other operation necessary to preserve it in good condition or to transport the good to the territory of Canada, Mexico and/or the United States.” See also 19 U.S.C. 3332(k).
The prohibitions on the transshipment of NAFTA originating goods are regulated under 19 CFR 181, Appendix, Part VI, Section 16(1). This regulation states, in pertinent part, that:
A good is not an originating good by reason of having undergone production that occurs entirely in the territory of one or more of the NAFTA countries that would enable the good to qualify as an originating good if subsequent to that production
the good is withdrawn from customs control outside the territories of the NAFTA countries; or
the good undergoes further production or any other operation outside the territories of the NAFTA countries, . . . .
Here, the fabrics will be withdrawn from customs control outside the territories of the NAFTA countries for finishing operations to be done in an EU member country, then re-imported into the U.S. and exported to Mexico. Therefore, it is our opinion that the fabrics will not be eligible for NAFTA preferential duty treatment upon exportation to Mexico.
HOLDING:
Based on the information submitted, the finished fabrics imported from the EU country are products of the U.S. in accordance with the tariff shift rule as outlined in 19 CFR 102.21(e), 5208 - 5212, HTSUS.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs and Border Protection officer handling the transaction.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division