CLA-2 CO:R:C:T 956622 CMR
Mr. Collin Hague
Salt Chuck Fish Net Supplies
1399 Fountain Way, Suite 507
Vancouver, B.C. V4K 2Y8
RE: Classification of used salmon gill fish nets cut to material
size (6 ft. X 20 ft.) and packaged for garden use; NAFTA
eligibility; Article 509
Dear Mr. Hague:
This ruling is in response to your request of July 24, 1992,
regarding the classification of used salmon gill fish netting and
it's eligibility for a duty preference under the North American
Free Trade Agreement (NAFTA). We regret the delay in responding
to your request. Our decision on the matter follows.
FACTS:
You indicate in your letter that you purchase used salmon gill
fish nets from local fishermen and commercial net lofts in the
province of British Columbia, Canada. The nets are worn to the
point that they have no viable use for commercial fishing. Due to
the manner in which the nets are acquired, their origin is
undeterminable.
After purchasing the nets, you cut the nets into material
sizes of netting for use in gardening. No further processing
occurs to the netting once cut other than packaging. The submitted
sample is sized six feet by 20 feet and is packaged in a plastic
bag which indicates its use for supporting flowers or vegetables
in a garden. The cutting and packaging occurs in Canada.
A sample of the netting was submitted to a Customs laboratory
to determine the decitex of the yarn and whether the construction
is a single, double or triple knotted construction. The report
indicates that the sample is composed of a multifilament nylon yarn
which has a decitex of 3101 (denier 2791). It also indicates the
netting is of a double knot construction. -2-
ISSUE:
What is the proper classification of the packaged netting?
Does the netting qualify for the NAFTA duty preference and
what is the country of origin for NAFTA marking purposes?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRIs). GRI 1 provides that
"classification shall be determined according to the terms of the
headings and any relative section or chapter notes and, provided
such headings or notes do not otherwise require, according to [the
remaining GRIs taken in order]."
The packaged netting is imported ready for use, however, it
is not classifiable as a made up article. Note 7(a) of Section
XI, HTSUSA, defines the expression "made up" for purposes of the
section to mean, among other things:
(a) Cut otherwise than into squares or rectangles.
As the netting is cut into a rectangle (6 feet by 20 feet), it is
not considered "made up". Thus, it cannot be classified as an
other made up article of Chapter 63. Nor may it be classified as
a worn textile article of Chapter 63 because although the netting
does show signs of appreciable wear, it is not presented in bulk,
bales, sacks or similar packings as required by Note 3, Chapter
63. Therefore, the netting must either be classified as netting
of heading 5608, HTSUSA, or a net fabric of heading 5804, HTSUSA.
Heading 5608, HTSUSA, provides for knotted netting of twine,
cordage or rope; made up fishing nets and other made up nets, of
textile materials. The Harmonized Commodity Description and Coding
System Explanatory Notes, which are the official interpretation of
the tariff at the international level, provide in pertinent part
for heading 5608 as follows:
(1) Knotted netting of twine, cordage or rope.
These products are simply lengths of netting, i.e.,
open mesh knotted fabric made either by hand or by
machine. They differ from the net fabrics of heading
58.04 in that they are made of the twine, cordage or rope
of heading 56.07.
Chapter 56 is part of Section XI of the HTSUSA. Note 3,
Section XI, states, in relevant part:
-3-
(A) For the purposes of this section, and subject to the
exceptions in paragraph (B) below, yarns (single, multiple
(folded) or cabled) of the following descriptions are to be
treated as "twine, cordage, ropes and cables":
* * *
(b) Of man-made fibers (including yarn of two or more
monofilaments of chapter 54), measuring more than 10,000
decitex;
* * *
The Explanatory Note (EN) for heading 5607 refers to parts
(I)(B)(1) and (2) of the General EN for Section XI, and in
particular Table 1 at page 708 of the General EN. The table makes
clear that yarns of man-made fibers which measure 10,000 decitex
or less are classifiable in chapters 54 or 55 and those which
measure more than 10,000 decitex are classifiable in heading 5607.
Since the multifilament nylon yarn of which the netting at
issue is made has a decitex of 3101, the yarn is not classifiable
in heading 5607, HTSUSA, and thus, the knotted netting at issue
cannot be classified in heading 5608, HTSUSA.
Heading 5804, HTSUSA, provides for, among other things, tulles
and other net fabrics, not including woven, knitted or crocheted
fabrics. The EN for heading 5804 provides various descriptions of
net fabrics. Among the descriptions is the following:
Knotted net fabrics have a uniform square or diamond shaped
mesh knotted at each corner so that the threads cannot be
pulled apart. They may be hand or machine made.
The EN also indicates the heading does not include nets or netting
of heading 5608. In addition, Note 4, Chapter 56, states:
Heading 5804 does not apply to knotted net fabrics of twine,
cordage or rope, of heading 5608.
As the netting at issue may not be classified in heading 5608,
heading 5804 is the most specific heading which provides for the
merchandise. The netting is classified in subheading 5804.10.0020,
HTSUSA, which provides for, among other things, tulles and other
net fabrics of man-made fibers.
-4-
Having determined the proper classification of the netting,
we can proceed to the question of NAFTA eligibility. Chapter 4 of
the NAFTA sets forth rules for determining whether an imported good
qualifies as an originating good of a NAFTA country. A good that
qualifies as an originating good is eligible for preferential
tariff treatment as provided for under Article 302(2) and Annex
302.2 of the NAFTA. The basic rules of origin in Chapter 4 of the
NAFTA, as well as the specific rules of origin found in Annex 401
of the NAFTA, are set forth in General Note 12, Harmonized Tariff
Schedule of the United States Annotated (HTSUSA). (See 58 Fed.
Reg. 69, 460, December 30, 1993).
Subdivision (b) of General Note 12, HTSUSA, provides, in
pertinent part:
For the purposes of this note, goods imported into the customs
territory of the United States are eligible for the tariff
treatment and quantitative limitations set forth in the tariff
schedule as "goods originating in the territory of a NAFTA
party" only if--
(i) they are goods wholly obtained or produced
entirely in the territory of Canada, Mexico and/or
the United States; or
(ii) they have been transformed in the territory of
Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this
note, each of the non-originating materials
used in the production of such goods undergoes
a change in tariff classification described in
subdivisions (r), (s) and (t) of this note or
the rules set forth therein, or,
(B) the goods otherwise satisfy the applicable
requirements of subdivisions (r), (s) and (t)
where no change in tariff classification is
required, and the goods satisfy all other
requirements of this note; or
(iii) they are goods produced entirely in the territory
of Canada, Mexico and/or the United States
exclusively from originating materials.
As the origin of the fishing nets from which the netting
fabric is cut is unknown, we must treat the fishing nets as non-
originating. Therefore, in order to qualify as originating for -5-
NAFTA purposes, the fishing nets used to produce the netting fabric
must undergo a change in tariff classification as required by Note
12(b)(ii)(A) or (B).
Note 12(t) sets out the specific tariff shift rules for
qualifying as an originating good. The netting fabric at issue is
classified in subheading 5804.10.0020, HTSUSA. The tariff shift
rule for Chapter 58 which is set out in Note 12(t) states:
A change to headings 5801 through 5811 from any other chapter,
except from headings 5106 through 5113, 5204 through 5212,
5307 through 5308 or 5310 through 5311, or chapters 54 through
55.
As fishing nets are classifiable in heading 5608, HTSUSA, and the
resulting netting fabric which is cut and packaged in Canada is
classified in heading 5804, HTSUSA, it appears that the required
tariff shift to qualify as an originating good has occurred. Thus,
the netting fabric imported into the United States from Canada
qualifies for preferential duty treatment under the NAFTA.
Since the netting fabric at issue is processed in the
territory of a NAFTA party, i.e., Canada, it is subject to the
country of origin marking rules set out in the interim amendments
to the Customs Regulations (19 CFR Part 102). The interim
amendments to the Customs Regulations were published as T.D. 94-
4 (59 Fed. Reg. 109, January 3, 1994) with corrections (59 Fed.
Reg. 5082, February 3, 1994) and T.D. 94-1 (59 Fed. Reg. 69460,
December 30, 1993). These interim amendments took effect on
January 1, 1994, to coincide with the effective date of the NAFTA.
Section 102.11 sets forth the general rules to determine
country of origin. It provides, in pertinent part, in section
102.11(a)(3):
(a) The country of origin of a good is the country in which:
(3) Each foreign material incorporated in that good
undergoes an applicable change in tariff classification
set out in section 102.20 and satisfies any other
applicable requirements of that section, and all other
applicable requirements of these rules are satisfied.
Section 102.20(k), Section XI (Chapters 50 through 63),
states the tariff shift requirement for goods of heading 5804 is:
-6-
A change to heading 5804 from any other heading; or
A change from greige fabric of heading 5804 to finished fabric
of that same heading by dyeing and printing, plus two or more
of the following finishing operations--bleaching, shrinking,
fulling, napping, decating, permanent stiffening, weighting,
permanent embossing, or moireing.
As stated above, the netting fabric undergoes a tariff shift
from 5608 (made up fishing nets) to 5804 (netting fabric) in
Canada. Since the netting fabric underwent the required tariff
shift in Canada, i.e., a change to heading 5804 from any other
heading (in this case, heading 5608), the country of origin of the
packaged netting fabric is Canada.
HOLDING:
The netting fabric at issue is classified in subheading
5804.10.0020, HTSUSA, which provides for, among other things,
tulles and other net fabrics of man-made fibers. Goods classified
therein fall in textile category 229 and are dutiable at a rate of
12 percent ad valorem. As an originating good under the NAFTA, the
netting fabric at issue is dutiable at 4.8 percent ad valorem.
Under 19 CFR Part 102, the netting fabric is a product of Canada
for marking purposes. As a product of Canada, the netting fabric
does not require a visa for textile category 229.
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 your 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