CLA-2 RR:TC:TE 960854 jb
Larry Horowitz
3-D Products & Designs Inc.
618 Reyes Dr.
Walnut, CA 91789
RE: Country of origin determination for buckwheat hull filled
neck pillow; NAFTA; 19 CFR 102.21(c)(2); tariff shift;
102.19(a)
Dear Mr. Horowitz:
This is in reply to your letter dated July 9, 1997,
requesting a country of origin determination for certain
buckwheat hull filled neck pillows. A sample was submitted to
this office for examination.
FACTS:
The submitted merchandise, a buckwheat hull filled neck
pillow, is composed of two parts- a pillow, made of 100 percent
cotton twill fabric, and pillow cover made from 100 percent
cotton muslin. The pillow measures approximately 17.5 inches by
23.5 inches and features a neck roll section. The pillow cover
has openings at both ends and is designed specifically to
accommodate the pillow insert.
Scenario I
China
buckwheat hulls are sourced
fabric for pillow shell is woven, cut and assembled
fabric for pillow case is woven, cut and assembled
Mexico
filling of pillow
packing
Scenario II
China
buckwheat hulls are sourced
Mexico
fabric for pillow shell is woven, cut and assembled
fabric for pillow case is woven, cut and assembled
filling of pillow
packing
Scenario III
China
buckwheat hulls are sourced
fabric for pillow shell is woven, cut and assembled
Mexico
fabric for pillow case is woven, cut and assembled
filling of pillow
packing
Scenario IV
China
buckwheat hulls are sourced
fabric for pillow case is woven, cut and assembled
Mexico
fabric for pillow shell is woven, cut and assembled
filling of pillow
packing
ISSUE:
1. What is the country of origin of the submitted
merchandise?
2. Whether the subject merchandise is eligible for NAFTA
treatment?
LAW AND ANALYSIS:
Classification
Classification of merchandise under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) is in accordance
with the General Rules of Interpretation. GRI 1 requires that
classification be determined according to 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 article at issue is made up of different components- a
pillow cover, classifiable in heading 6304, HTSUS, and small
pillow insert, classifiable in heading 9404, HTSUS. As the
article is prima facie classifiable under different HTSUS
headings, it cannot be classified pursuant to GRI 1. GRI 3 is
applicable in this case and states, in pertinent part:
When by application of rule 2(b) or for any other reason,
goods are, prima facie, classifiable under two or more
headings classification shall be effected as follows:
(b) Mixtures, composite goods consisting of different
materials or made up of different components, and
goods put up for retail sale, which cannot be
classified by reference to 3(a), shall be
classified as if they consisted of the material or
component which gives them their essential
character, insofar as this criterion is
applicable.
The Explanatory Notes to the Harmonized Commodity
Description and Coding System (EN) for GRI 3(b) defines
"composite goods made up of different components" as:
XI. ...not only those in which the components are attached
to each other to form a practically inseparable whole
but also those with separable components, provided
these components are adapted one to the other and are
mutually complementary and that together they form a
whole which would not normally be offered for sale in
separate parts.
The article at issue consists of separable components which
meet the definition of composite goods. It is the opinion of
this office that the pillow insert and cover are adapted to fit
one another, are mutually complementary and would not normally be
offered for sale separately. Accordingly, as the articles are
classifiable as composite goods, the classification is based on
the component which imparts the essential character to the good.
EN VII to GRI 3(b) states:
The factor which determines the essential character will
vary as between different kinds of goods. It may for
example, be determined by the nature of the material or
component, its bulk, quantity, weight or value, or by the
role of a constituent material in relation to the use of the
goods.
The pillow comprises the essential character of the pillow
cover and pillow. It provides the bulk, the weight and the form
to the item. Heading 9404, HTSUS, provides for, among other
things, articles of bedding and similar furnishings. Although
size specifications are not explicitly outlined in the terms of
heading 9404, HTSUS, Customs has held that so long as pillows are
sufficient in size and stuffing to be capable of providing
support, classification in heading 9404, HTSUS, is not excluded.
Accordingly, it is the opinion of this office that the subject
pillow is adequate in size to provide support and thus, is
properly classified in heading 9404, HTSUS.
NAFTA Eligibility
The subject pillow undergoes processing operations in Mexico
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:
* * *
(ii) Goods that originate in the territory of a NAFTA party
under subdivision (b) of this note and that qualify to
be marked as goods of Mexico 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 "MX" in parentheses, are eligible for such duty rate... . [Emphasis added]
Accordingly, the pillow at issue will be eligible for the
"Special" "MX" 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 Mexico. 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 Mexico so
that the non-originating materials (the hulls and fabric formed
in China) undergo a change in tariff classification as described
in subdivision (t).
For the pillow, subdivision (t), Chapter 94, rule 7, states
that:
A change to subheading 9404.90 from any other chapter,
except from headings 5007, 5111 through 5113, 5208 through
5212, 5309 through 5311, 5407 through 5408 or 5512 through
5516.
In scenario II, the fabric for the pillow shell and cover is
wholly obtained or produced in Mexico. When the hulls from China
are added to the pillow, they undergo the required tariff shift
and thus qualify the pillow for NAFTA treatment.
In scenario I, when the pillow shell and cover from China
are sent to Mexico, in scenario III, when the pillow shell from
China is sent to Mexico, and in scenario IV when the pillow case
from China is sent to Mexico, these articles are classified in
either heading 6307, HTSUS, (incomplete pillow shell) or heading
6304, HTSUS, (pillow cover). As these headings are not excepted
by subdivision (t) for subheading 9404.90, HTSUS, the non-originating material(s) from China do undergo the requisite
change in tariff classification. Accordingly, the merchandise in
scenarios I, III and IV are also eligible for the NAFTA
preference.
Country of origin
On December 8, 1994, the President signed into law the
Uruguay Round Agreements Act. Section 334 of that Act (codified
at 19 U.S.C. 3592) provides new rules of origin for textiles and
apparel entered, or withdrawn from warehouse, for consumption, on
and after July 1, 1996. On September 5, 1995, Customs published
Section 102.21, Customs Regulations, in the Federal Register,
implementing Section 334 (60 FR 46188). Thus, effective July 1,
1996, the country of origin of a textile or apparel product shall
be determined by sequential application of the general rules set
forth in paragraphs (c)(1) through (5) of Section 102.21.
Paragraph (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) of Section 102.21 is inapplicable.
Paragraph (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".
Paragraph (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":
9404.90 The country of origin of a good
classifiable under subheading 9404.90 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 classifiable in subheading
9404.90, HTSUS. In scenarios I and III, as the fabric
comprising this merchandise is formed in a single country, that
is China, the country of origin of the subject merchandise is
China. However, as stated in section 102.19(a):
Except in the case of goods covered by paragraph (b) of this
section, if a good which is originating within the meaning
of 181.1(q) of this chapter is not determined under
102.11(a) or (b) or 102.21 to be a good of a single NAFTA
country, the country of origin of such good is the last
NAFTA country in which that good underwent production other
than minor processing, provided that a Certificate of Origin
(see 181.11 of this chapter) has been completed and signed
for the good.
Accordingly, provided the requirements of section 102.19(a) are
met, the country of origin of the subject merchandise in
scenarios I and III is Mexico.
In scenarios II and IV, as the fabric comprising the pillow
shell is formed in Mexico, as per the terms of the tariff shift,
the country of origin of the subject merchandise is Mexico.
HOLDING:
The subject buckwheat hull filled neck pillow is properly
classified in subheading 9404.90.1000, HTSUSA, which provides for
mattress supports; articles of bedding and similar furnishing
(for example, mattresses, quilts, eiderdowns, cushions, pouffes
and pillows) fitted with springs or stuffed or internally fitted
with any material or of cellular rubber or plastics, whether or
not covered: other: pillows, cushions and similar furnishings: of
cotton. The applicable rate of duty is 5.7 percent ad valorem
and the quota category is 369.
In scenarios I, II, III and IV, the country of origin of the
subject pillow is Mexico and the merchandise is eligible for
NAFTA treatment.
The designated textile and apparel category may be
subdivided into parts. If so, 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 renegotiations and
changes, to obtain the most current information available, we
suggest that 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 available for
inspection at your 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 applicable to textile
merchandise, you should contact your local Customs office prior
to importing the merchandise to determine the current status of
any import restraints or requirements.
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
Commercial Rulings Division