CLA CO:R:C:T 951842 jb
TARIFF: 6214.30.0000
Mr. Ashok Menon
Ranka Enterprise Inc.
7261 Victoria Park Avenue
Markham, Ontario
Canada L3R 2M7
RE: Request for classification, country of origin and duty
treatment under CFTA for scarves; subheading 6214.30.0000,
HTSUSA
Dear Mr. Menon:
This letter is in response to your inquiry of April 30,
1992, requesting a binding ruling addressing classification,
country of origin information, and the applicability of the
United States-Canada Free Trade Agreement (CFTA) for scarves that
will be shipped to the U.S. from Canada. A sample was provided
to this office for examination.
FACTS:
You state that 100 percent acrylic woven fabric will be
imported into Canada from China. The imported fabric will be in
rolls 288 yards in length and 12 inches in width with no lines of
demarcation on the fabric.
In Canada the fabric is cut at 54 inch intervals and a
fringe made on the cut edges of the scarf. A completed scarf
thus measures 12 inches wide and 54 inches long. With the
exception of the stitching of the label onto the scarf, no other
stitching is necessary. The last steps in this process entail
correcting any defects and packaging the scarf in a polybag.
ISSUE:
I. What is the classification of the scarf?
II. What is the country of origin of the scarf?
III. Whether the scarf is eligible for reduced duty under
CFTA?
IV. What are the marking requirements for the scarf?
LAW AND ANALYSIS:
I. Classification
Classification under the Harmonized Tariff Schedule of the
United States Annotated (HTSUSA) is governed by the General Rules
of Interpretation (GRI). GRI 1 provides that classification is
determined in accordance with 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.
The fabric, as imported from China would be classified in
heading 5512, HTSUSA, which provides for woven fabrics of
synthetic staple fibers, containing 85 percent or more by weight
of synthetic staple fibers. Upon completion, once the fabric is
cut and the fringe made on the ends, the fabric becomes a scarf
for classification purposes.
Heading 6214, HTSUSA, provides for shawls, scarves,
mufflers, mantillas, veils and the like, and as such is an eo
nomine provision for the submitted sample. Specifically, the
scarf is classified in subheading 6214.30.0000, HTSUSA as scarves
of synthetic fibers.
II. Country of Origin
Section 12.130 of the Customs Regulations (19 CFR 12.130),
sets forth the principles of country of origin for textiles and
textile products subject to section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C. 1854).
Pursuant to 19 CFR 12.130(b), the standard of substantial
transformation governs the country of origin determination where
textiles and textile products are processed in more than one
country. The country of origin of textile products is deemed to
be that foreign territory or country where the article last
underwent a substantial transformation. Substantial
transformation is said to occur when the article has been
transformed into a new and different article of commerce by means
of substantial manufacturing or processing.
The factors to be applied in determining whether or not a
manufacturing operation is substantial are set forth in 19 CFR
12.130(d). Section 12.130(e)(1) describes manufacturing or
processing operations from which an article will usually be
considered a product of the country in which those operations
occurred. Section 12.130(e)(1)(iv) provides that an article or
material usually will be a product of a particular foreign
territory or country when there has been both a cutting of fabric
into parts and the assembly of those parts into the completed
article.
Section 12.130(e)(1)(v) states that an article will be a
product of a particular foreign country, when it has undergone
prior to importation into the U.S. in that foreign country:
Substantial assembly by sewing and/or tailoring of all cut
pieces of apparel articles which have been cut from fabric
in another foreign territory or country, or insular
possession, into a completed garment (e.g., the complete
assembly and tailoring of all cut pieces of suit-type
jackets, suits and shirts.
In Headquarters Ruling Letter (HRL) 085893, dated February
22, 1990, regarding the country of origin of a 100 percent rayon
scarf, Headquarters ruled that the cutting and hemming operations
performed in Canada were not substantial operations that changed
the country of origin of the scarves. The bolts of fabric, 44
inches wide and 120 meters long, were imported into Canada from
India. In Canada the fabric was cut to 20 inches by 72 inches
lengths and sewn on all four sides. The scarves were then
labeled, checked and prepacked for shipping. The costs
attributable to Canada were purportedly 75 percent of the selling
price of the scarves. The country of origin of the scarves was
determined to be India.
The processing ruled upon in HRL 085893 is similar but more
extensive than the one presently at issue, yet the country of
origin in that case was still not considered adequately
substantial to transform the fabric. Accordingly, the fabric
produced in China, has not undergone the requisite substantial
transformation to qualify for a change in country of origin and
the scarves are products of China.
III. The United States Canada Free Trade Agreement
General Note 3(c)(vii), HTSUSA, sets forth the rules which
determine whether products imported into the United States from
Canada are entitled to special duty treatment under CFTA.
Eligible goods must be "goods originating in Canada" as provided
in General Note 3(c)(vii)(A), HTSUSA.
Pursuant to General Note 3(c)(vii)(B), HTSUSA, goods
imported into the customs territory of the United States are
eligible for treatment as "goods originating in the territory of
Canada" only if:
(1) they are goods wholly obtained or produced in the
territory of Canada and/or the United States, or
(2) they have been transformed in the territory of Canada
and/or the United States, so as to be subject-
(I) to a change in tariff classification as described in
the rules of subdivision (c)(vii)(R) of this note
(II) to such other requirements subdivision (c)(vii)(R)
of this note may provide when no change in tariff
classification occurs, and they meet the other
conditions set out in subdivisions (c)(vii)(F), (G),
(H), (I), (J) and (R) of this note
As the fabric was not wholly obtained or produced in the
territory of the United States or Canada, and the processing of
the fabric from China resulted in a transformation effecting a
change in tariff classification (from subheading 5512.21.0000,
HTSUSA, to subheading 6214.30.0000, HTSUSA), we refer to General
Note 3(c)(vii):
Whenever the processing or assembly of goods in the
territory of Canada and/or the United States results in one
of the changes in tariff classification in Canada described
by the rules set forth in subdivision (c)(vii)(R) of this
note, such goods shall be considered to have been
transformed in the territory of Canada and shall be treated
as goods originating in the territory of Canada, provided
that such processing or assembly occurs entirely within the
territory of Canada and/or the United States and that such
goods have not subsequently undergone any processing or
assembly outside of Canada or the United States that
improves the goods in condition or advances them in value.
General Note 3(c)(vii)(R) provides the change in tariff
classification rules for Section XI, HTSUSA. General Note
3(c)(vii)(R)(11)(oo) states:
A change to any heading of chapter 62 from any heading
outside that chapter other than headings 5111 through 5113,
5208 through 5212, 5309 through 5311, 5407, 5408, 5512
through 5516, or 6001 through 6002; provided that, such
goods are both cut and sewn in the territory of Canada
and/or the United States.
According to that provision, in order for goods to be
considered transformed into originating material in the territory
of Canada, a change to any heading of chapter 62 must occur from
a heading other than those mentioned. As the change that occurs
in this case is from heading 5512, which is a heading
specifically mentioned and excluded, the process performed in
Canada does not transform the scarf for the purposes of it being
considered "originating" in the territory of Canada.
IV. Marking
Section 134.11 of the Customs Regulations (19 CFR 134.11)
sets forth principles of country of origin marking. Therein is
stated:
Unless excepted by law, section 304 Tariff Act of 1930, as
amended (19 U.S.C. 1304), requires that every article of
foreign origin (or its container) imported into the United
States shall be marked in a conspicuous place as legibly,
indelibly, and permanently as the nature of the article (or
container) will permit, in such manner as to indicate to the
ultimate purchaser in the United States the English name of
the country of origin of the article, at the time of
importation into the Customs territory of the United States.
Containers of the articles excepted from marking shall be
marked with the name of the country of origin of the article
unless the container is also excepted from marking.
HOLDING:
The scarf is classified in subheading 6214.30.0000, HTSUSA,
which provides for shawls, scarves, mufflers, mantillas, veils
and the like: of synthetic fibers. The applicable rate of duty
is 10.6 percent, ad valorem. The scarf requires a visa from
China for textile category 659.
The country of origin for the scarf is China and the article
should be marked accordingly. It does not qualify for special
duty treatment under the CFTA.
The designated textile and apparel category may be
subdivided into parts. If so, the 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 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 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 importation of this merchandise to
determine the current status of any import restraints or
requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division