CLA-2 CO:R:C:T 957572 CMR
Mr. Mervyn Taub
Advanced Apparel Associates
51 Magazine Street
Bedford, New Hampshire 03110-4810
RE: Request for reconsideration of HRL 956423 of December 20,
1994; NAFTA eligibility; Article 509
Dear Mr. Taub:
This is in response to your request of January 25, 1995 for
reconsideration of Headquarters Ruling Letter (HRL) 956423 issued
to you on December 20, 1995. The basis for your request is a
belief that the de minimis rule set out in General Note 12(f) of
the Harmonized Tariff Schedule of the United States (HTSUS) is
applicable to the men's jackets at issue in HRL 956423.
FACTS:
HRL 956423 was issued in response to your request for
reconsideration of New York Ruling Letter (NYRL) 896271.
According to NYRL 896271, the garment at issue is a man's jacket
with an outer shell of 100 percent cotton denim fabric. The
garment is classifiable in subheading 6201.92, HTSUS. When
imported, the garment will consist of 98 percent United States
fabric. The remaining two percent is a cotton flannel fabric of
Taiwanese origin. Both the U.S. and Taiwanese fabrics will be
cut and assembled into the garment in Mexico. The cotton flannel
fabric is used as a lining for the yoke.
The garment was denied preferential tariff treatment under
the North American Free Trade Agreement because the cotton
flannel fabric failed to meet the requisite tariff shift. You
believe that the de minimis rule of General Note 12(f) applies in
this case and that as the Taiwanese fabric is only 2 percent of
the garment, it should be ignored.
ISSUE:
Does the de minimis rule of General Note 12(f), HTSUS, apply
to the garment at issue, and if so, was NAFTA preferential tariff
treatment properly denied? -2-
LAW AND ANALYSIS:
As stated in HRL 956423:
The request for reconsideration hinges on the applicability
of the de minimis rule contained in General Note 12(f),
HTSUSA.
As that is the focus of your letter of January 25, 1995, Customs
will not repeat our entire analysis from HRL 956423, but will
concern ourselves only with the de minimis rule and why it is not
applicable to the goods at issue in HRL 956423.
General Note 12(f), HTSUSA, provides, in pertinent part:
(i) Except as provided in subdivision (f)(iii) through (vi)
. . .
* * *
(vi) A good provided for in chapters 50 through 63,
inclusive, of this schedule that does not originate
because certain fibers or yarns used in the production
of the component of the good that determines the tariff
classification of the good do not undergo an applicable
change in tariff classification, provided for in
subdivisions (r), (s) and (t) of this note, shall
nonetheless be considered to originate if the total
weight of all such fibers or yarns in that component is
not more than 7 percent of the total weight of that
component. (underscoring added)
In your letter, you state you agree with the following
statements in HRL 956423:
Under the instant factual situation, the goods in question
do not qualify for preferential tariff treatment under the
NAFTA for two reasons--(1) the cotton fabric from Taiwan
does not meet the requisite tariff shift rule contained in
General Note 12(t)/62.3(B); and (2) since lining fabrics do
not determine the tariff classification of the good, . . . .
You disagree with the remaining portion of the last sentence
quoted above. That portion states: "the de minimis rule is not
applicable to the subject goods."
You are correct that the de minimis rule does not apply to
the lining. It applies to "the component of the good that
determines the tariff classification" which in this case is the
garment shell consisting of United States fabric.
The Taiwanese cotton flannel fabric must undergo the
requisite tariff shift as it is non-originating material. As it -3-
is a lining fabric for a garment classified in heading 6201.92,
HTSUS, it is required to meet Chapter rule 1 for Chapter 62, as
stated in tariff shift rule General Note 12(t)/62.3(B). It fails
to meet this tariff shift requirement.
As you correctly state in your letter, the de minimis rule
does not apply to the lining fabric. Thus, the de minimis rule
cannot be used to dismiss the tariff shift requirement for the
lining fabric. The rule does not apply to the garment as a
whole. Therefore even though the lining fabric is only 2 percent
of the garment, because it is not the component that determines
the classification we cannot apply the de minimis rule and the
lining fabric must meet its tariff shift requirement.
HOLDING:
We affirm our decision in HRL 956423 of December 29, 1994
which affirmed Customs decision in NYRL 896271. The garment at
issue therein failed to meet the requirements for preferential
tariff treatment under the NAFTA.
Sincerely,
John Durant, Director
Commercial Rulings Division