CLA-2 RR:TC:TE 959882 jb
Joseph Giumentaro
PBB Group
434 Delaware Ave.
Buffalo, NY 14202
RE: Country of origin determination for a drain net; Section
102.21(c)(2); tariff shift; Article 509; not eligible for
NAFTA
Dear Mr. Giumentaro:
This is in reply to your letter dated September 17, 1996, on
behalf of your client, Ropak Canada Inc., requesting
classification under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA) and a country of origin determination
for a drain net which will be imported into the United States.
Our New York office issued to you A87786, dated October 17, 1996,
addressing the proper classification of this merchandise in
subheading 6307.90.9989, HTSUSA. Accordingly, this letter will
only address the proper country of origin determination for the
subject merchandise. A sample was submitted to this office for
examination.
FACTS:
The subject merchandise is made of a 100 percent
polypropylene warp knit open work fabric and features a « inch
braided elastic band which has been assembled into the knit
fabric by way of a hem sewn around the periphery of a cut to
shape piece of the knitted fabric. This creates a net in the
shape of a half sphere with an opening measuring 12 inches in
diameter.
You state that this merchandise is used to drain off the
brine from a brine and roe mixture, trapping the roe for
subsequent packaging and shipment.
The manufacturing operations for the subject merchandise are
as follows:
JAPAN
- polypropylene knit fabric is formed.
TAIWAN
- elastic braid is formed by braiding a textile yarn around
rubber thread.
* You state that the elastic braid weighs 13.6 percent of
the overall product weight and thus does not meet the terms of De
Minimis as per Section 102.13.
CANADA
- fabric is cut to shape;
- fabric covered elastic braid is sewn along the periphery
of the polypropylene knit fabric.
ISSUE:
1. Whether the subject merchandise is eligible for duty
free treatment under the North American Free Trade
Agreement (NAFTA)?
2. What is the country of origin of the subject
merchandise?
LAW AND ANALYSIS:
NAFTA Eligibility
The subject drain net undergoes processing operations in
Canada which is a country provided for under the North American
Free Trade Agreement (NAFTA). General Note 12, HTSUSA,
incorporates Article 401 of the North American Free Trade
Agreement (NAFTA) into the HTSUSA. Note 12(a) provides, in
pertinent part:
* * *
(i) Goods that originate in the territory of a NAFTA party
under the terms of subdivision (b) of this note and that
qualify to be marked as goods of Canada under the terms
of the marking rules... and are entered under a subheading for
which a rate of duty appears in the "Special" subcolumn
followed by the symbol "CA" in parentheses, are eligible
for such duty rate... . [Emphasis added]
Accordingly, the drain net at issue will be eligible for the
"Special" "CA" rate of duty provided it is a NAFTA "originating"
good under General Note 12(b), HTSUSA, and it qualifies to be
marked as a good of Canada. Note 12(b) 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; or
* * *
The subject merchandise qualifies for NAFTA treatment only
if the provisions of General Note 12(b)(ii)(A) are met, that is,
if the merchandise is transformed in the territory of Canada so
that the non-originating material (the polypropylene fabric
formed in Japan and the fabric covered elastic band formed in
Taiwan) undergo a change in tariff classification as described in
subdivision (t).
Subdivision (t), Chapter 63, chapter rule 1, states that:
For purposes of determining the origin of a good of this
chapter, the rule applicable to that good shall only apply
to the component that determines the tariff classification
of the good and such component must satisfy the tariff
change requirements set out in the rule for that good.
For the subject drain net, subdivision (t), Chapter 63, rule
4, states:
A change to headings 6304 through 6310 from any other
chapter, except from headings 5106 through 5113, 5204
through 5212, 5307 through 5308 or 5310 through 5311,
chapters 54 through 55, or headings 5801 through 5802 or
6001 through 6002, provided that the good is both cut (or
knit to shape) and sewn or otherwise assembled in the
territory of one or more of the NAFTA parties.
The component which determines the tariff classification of
the subject drain net is the warp knit fabric from Japan,
classifiable in heading 6002, HTSUS. As the non-originating
material, that is, the warp knit fabric of heading 6002, HTSUS,
is excepted by subdivision (t), Chapter 63, rule 4, it does not
undergo the requisite change in tariff classification.
Accordingly, the merchandise is not eligible for the NAFTA
preference.
Country of origin
On September 5, 1995, Customs published in the Federal
Register (60 FR 46188) T.D. 95-69 which set forth final
amendments to the Customs Regulations to implement the provisions
of section 334 (b) of the Uruguay Round Agreements Act ("the
Act"), Public Law 103-465, 108 Stat. 4809, codified at 19 U.S.C.
3592, regarding the country of origin of textile and apparel
products. These final regulations apply to goods entered, or
withdrawn from warehouse, for consumption on or after July 1,
1996. The regulatory provisions in T.D. 95-69 that implement the
basic origin principles of section 334(b) of the Act are
contained in a new 102.21 of the Customs Regulations (19 CFR
102.21).
The final rule for the rules for determining country of
origin of a good for purposes of Annex 311 of the NAFTA was
published by Customs on June 6, 1996, in the Federal Register (61
FR 28932). Therein it was stated, in pertinent part:
New 102.21 was modeled on the approach taken in the interim
Part 102 texts as published in T.D. 94-4 and thus
incorporates a general statement of applicability (paragraph
(a)), various definitions (paragraph (b)), general origin
rules (paragraphs (c) and (d)), and specific tariff shift
and/or other requirements (paragraph (e)) that apply under
the second general rule. Of particular note for purposes of
the present document is the definition of "textile or
apparel product" in 102.21(b)(5) which delineates the class
of goods covered by the 102.21 rules. That definition
identifies those goods with reference to classification in
the HTSUS and refers to Chapters 50 through 63 (that is, all
of Section XI) of the HTSUS as well as to specific headings
and 6-, 8- or 10-digit subheadings of the HTSUS that fall
outside Section XI. Thus, if a good is classifiable in an
HTSUS provision listed in 102.21(b)(5), precedence must be
given to the 102.21 rules over any other regulatory
provision with regard to that good, including any origin
rules contained elsewhere in part 102.
Accordingly, as the subject merchandise is classified in heading
6307, HTSUS, a textile article identified by 102.21(b)(5), the
102.21 rules take precedence over any other rules of origin to
determine the appropriate country of origin.
Section 102.21(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,
paragraph (c)(1) is not applicable.
Section 102.21(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."
Section 102.21(e) states 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":
6307.90 The country of origin of a good classifiable under
subheading 6307.90 is the country, territory, or
insular possession in which the fabric comprising the good was formed by a fabric-making process.
The subject merchandise is classified in subheading 6307.90.9989,
HTSUSA. As the fabric comprising the submitted drain net is made
up of fabric from Japan (warp knit fabric) and
flat braid from Taiwan, the terms of the tariff shift are met.
Accordingly, the country of origin of the subject drain net is
Japan.
HOLDING:
The country of origin of the subject drain net is Japan.
The subject drain net is not eligible for the NAFTA
preference.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request. This position is clearly set forth in section 19 CFR
177.9(b)(1). This section states that a ruling letter is issued
on the assumption that all of the information furnished in the
ruling letter, either directly, by reference, or by implication,
is accurate and complete in every material respect.
Should it be subsequently determined that the information
furnished is not complete and does not comply with 19 CFR
177.9(b)(1), the ruling will be subject to modification or
revocation. In the event there is a change in the facts
previously furnished, this may affect the determination of
country of origin. Accordingly, if there is any change in the
facts submitted to Customs, it is recommended that a new ruling
request be submitted in accordance with 19 CFR 177.2.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division