CLA-2 CO:R:C:T 956361 PR
Mr. David King
7308 Haverford
Dallas, TX 75214
RE: NAFTA Eligibility and Classification of Table Coverings
Dear Mr. King:
This is in further reply to your letter of March 30, 1994,
on behalf of the Macra Lace Company, concerning the status of
table coverings under the North American Free Trade Agreement
(NAFTA). You also requested information on county of origin
marking and the applicability of subheading 9802.00.90,
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA). That information was furnished to you in Headquarters
Ruling Letter (HQ 557870), dated July 6, 1994. Our ruling on the
classification and NAFTA status of the table coverings follows.
FACTS:
You state that the goods will be made from fabric which is
knit in the United States on a Mayer double jacquard machine from
polyester fibers extruded in the United States. We assume that
the continuous filament yarns used in the fabric are formed in
the United States from the extruded filaments. The fabric is
finished in the United States and sent in rolls to Mexico where
it is hand cut into separate units which are returned to the
United States.
Our Office of Laboratory and Scientific Services has
examined a sample and advised this office that the fabric was
made by a warp knitting machine.
ISSUE:
The issue presented is whether the table coverings produced
in NAFTA countries are qualifying goods under the NAFTA and how
are they classified.
-2-
LAW AND ANALYSIS:
Imported goods are classifiable according to the
General Rules of Interpretation (GRI's) of the Harmonized Tariff
Schedule of the United States (HTSUSA). GRI 1 provides that for
legal purposes, classification shall be determined according to
the terms of the headings in the tariff and according to any
pertinent section or chapter notes. It appears that GRI 1
governs the classification of the subject merchandise.
Heading 6302, Harmonized Tariff Schedule of the United
States (HTSUS), expressly provides for, among other things, table
linen. No other tariff provision describes the subject
merchandise. Accordingly, the subject goods are classifiable
under that heading, in subheading 6302.40.20, HTSUS, which
provides for knitted table linen of material other than vegetable
fibers.
The NAFTA eliminates tariffs on most goods originating in
Canada, Mexico, and the United States, over a maximum transition
period of fifteen years. Generally, tariffs only will be
eliminated on goods that "originate", as defined in Article 401,
NAFTA. Article 401 states that a good is "originating" if (1) it
is wholly obtained or produced in the NAFTA region; (2) it is
produced in the NAFTA region wholly from originating materials;
(3) each of the nonoriginating materials used in the production
of the good undergoes the applicable tariff shift set out in
Annex 401 and any other applicable requirements of that Annex; or
(4) it is unassembled, or is classified with its parts, and does
not meet the Annex 401 requirements but contains either 60
percent regional value content using the transaction method or 50
percent regional value content using the net cost method.
In this instance, since we do not know the origin of the
plastic material from which the filaments were extruded, there is
insufficient information to determine if the table coverings are
"wholly" produced in the NAFTA region. However, the process of
extruding plastic material into filaments, converting those
filaments into yarns of chapter 54, HTSUS, and creating a fabric
from those yarns, causes that fabric to be "originating" for
purposes of the NAFTA. Accordingly, the table coverings which
are cut in Mexico are wholly made from originating materials and
are, therefore, themselves originating.
Note 2 of subchapter II, chapter 98, HTSUS, provides that
products of the United States which are returned after having
been advanced in value or improved in condition abroad shall be
treated as foreign articles. Accordingly, the table coverings
are dutiable under the NAFTA as products of Mexico.
-3-
HOLDING:
The table coverings are classifiable under the provision for
other knitted table linen, in subheading 6302.40.20, HTSUS.
Under the facts presented, the table coverings are wholly
produced in the NAFTA region. Accordingly, they are qualifying
goods for purposes of the NAFTA and are dutiable at the rate of
7.1 percent ad valorem.
This ruling is issued pursuant to the provisions of sections
181.91 through 181.102, Customs Regulations (19 CFR 181.91-102).
If the specific factual situation is not as described above, this
ruling may not be valid. In such an event, it is recommended
that a new ruling request be submitted.
Sincerely,
John Durant, Director
Commercial Rulings Division