CLA-2: RR:CR:TE 967108 ASM
Ms. Lydia Truce
S.D. Design, Inc.
12 Dominican Drive
San Rafael, CA 94901
RE: Request for Binding Ruling; Articles of Needlework; Not “Embroidery in the piece” of 5810, HTSUSA
Dear Ms. Truce:
This is in response to your request for a binding ruling dated February 12, 2003 (received by this office on April 26, 2004), concerning the classification under the Harmonized Tariff Schedule of the United States Annotated of certain needlework articles. Samples have been provided to the Bureau of Customs and Border Protection (CBP).
FACTS:
The samples are identified as Exhibits 1, 2, and 3. Exhibit 1 consists of an 8 inch x 11 inch square mesh canvas fabric that appears to have received a special coating to make the fabric stiff/coarse. Two tear-drop shaped designs, each measuring approximately 3 inches (at the widest point) x 6 inches, are printed at the center of the canvas. Empty ground fabric surrounds the designs and is not intended to be incorporated into the design. The printed canvas is sent from an unidentified country to the Philippines for stitching along with the appropriate yarns of cotton, wool, man-made, and/or metallic fibers. Information contained in the file suggests that the fabric was “exported” to the Philippines which would infer that the fabric originated from the United States. Exhibits 2 and 3 represent the needlework designs as completed in the Philippines for importation into the United States.
Exhibit 2 has two completed tear-drop shape designs at the center of the canvas measuring approximately 3 inches (at the widest point) x 6 inches with surrounding ground fabric that has not been worked or incorporated into the needlework design. One tear-drop design is of a mermaid and has been worked in a variety of threads, stitches (including but not limited to petit point), and colors. The second tear-drop design depicts two decorative fish surrounded by intricate patterns in a variety of threads, stitches, and colors.
Exhibit 3 depicts a 6 inch x 6 inch needlework design completed almost entirely in a petit-point stitch (as well as some cross stitch) in a variety of threads and colors which is surrounded by ground fabric that has not been incorporated into the design. The worked design illustrates a bakery storefront with the words “La Patisserie”, “Gateaux”, “Pain”, and “Tarte”.
ISSUE:
What is the proper classification for the merchandise? What is the proper country of origin marking? Does the product qualify under the GSP program?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
After importation into the United States, the representative needlework samples may be framed, used as appliques, or as a cover for eye glass cases. Thus, the samples identified as Exhibits 2 and 3 will be imported into the United States in an “unfinished condition”. However, classification can proceed pursuant to a GRI 1 analysis, i.e., according to the terms of the headings and any relative section or chapter notes. In the instant case, there are two provisions in the HTSUSA which specifically provide for the classification of unfinished needlework articles: Heading 5805, HTSUSA, provides for needle-worked tapestries “…whether or not made up”; Heading 5810, HTSUSA, provides for “Embroidery in the piece”.
We begin by noting that Heading 5805, HTSUSA, provides for “… needle-worked tapestries (for example, petit point, cross stitch), whether or not made up.” The EN’s for 5805 provide additional guidance: “This heading covers tapestries either woven by hand or needle-worked on a ground fabric (usually canvas). Their essential characteristic is that they are made in the form of panels bearing a complete, individual design, frequently of a pictorial character." The EN to 5805, more specifically provides for “needle-worked tapestries” as follows:
(B) NEEDLE-WORKED TAPESTRIES
Needle-worked tapestries (also known as point tapestries) are
characterised by the fact that they are made with a fabric ground (usually
square meshed canvas), on which the desired design is filled in by needle-
work using a great many different coloured threads.
Needle-worked tapestries are sometimes over-worked with further stitches
but remain in this heading and are not regarded as embroidery.
Contrary to the case of most embroideries of heading 58.10, the ground
fabric (usually canvas) is completely covered except perhaps at the
edges. The stitches used are differently named according to the way in
which they are executed: petit point, gros point, cross stitch, double cross
stitch, Gobelins stitch, etc.
Tapestries are used mainly for furnishing purposes, as wall coverings or
for upholstering chairs, etc., and are usually made of silk, wool, man-
made fibres or even metallised yarn.
They remain in this heading even if hemmed, bordered, lined, etc., but if
made up into articles such as evening handbags, cushions, slippers, etc.,
they are of course, excluded.
We have already recognized that Exhibits 2 and 3 may be put to a use other than for “furnishing purposes” which may exclude these articles from classification in heading 5805, HTSUSA. However, it is well settled that imported merchandise must be classified with reference to its condition as imported. See Carrington Co. et al v. United States, 61 CCPA 77, C.A.D. 1126, 497 F.2d 902 (1974); Olympus Corp. Of America v. United States, 72 Cust. Ct. 176, C.D. 4538 (1974); Heartland By-Products, Inc., v. U.S., 23 C.I.T. 754; 74 F. Supp. 2d 1324 (1999). In their condition as imported, these unfinished articles have not yet been “made up” into articles. Furthermore, additional language contained in the EN to 5805 seems to suggest that such unfinished articles remain in heading 5805, HTSUSA, even if hemmed, bordered, lined, etc., as long as they have not actually been “made up” into articles such as “… evening handbags, cushions, slippers, etc.” which are excluded from the heading.
Exhibits 2 and 3, share many of the characteristics of the “needle-worked tapestries” as described in the EN to 5805. Each of these samples has a square meshed canvas with a printed design that has been completely covered with needlework, including petit point and cross stitch, forming complete, individual designs of a pictorial character. Several CBP rulings classify articles similar to the ones currently at issue as “needle-worked tapestries” in heading 5805, HTSUSA. In CBP Headquarter’s Ruling Letter (HQ) 087524, dated October 15, 1990, an article having a needle-worked floral design on a square meshed canvas was found to be classified as a needle-worked tapestry in heading 5805, HTSUSA. See also HQ 088037, dated October 15, 1990; New York Ruling Letter (NY) 885051, dated May 5, 1993; NY 886418, dated June 15, 1993; NY A83410, dated June 3, 1996; NY D87526, dated February 11, 1999, and NY H89347, dated March 27, 2002.
Heading 5810, HTSUSA, provides for “Embroidery in the piece, in strips or in motifs.” Although Exhibits 2 and 3 feature needlework designs which have been created by using various embroidery stitches, that does not necessarily mean that they are classifiable as “Embroidery in the piece”, of heading 5810, HTSUSA. As noted above, the ENs to heading 5805 also identify certain embroidery stitches (cross stitch, double cross stitch, Gobelins stitch, etc.) which are used to complete needle-worked tapestries that are properly classified in heading 5805, HTSUSA.
The EN to 5810 provides additional guidance in making the distinction between embroidered articles classified in heading 5805, HTSUSA, from those of heading 5810, HTSUSA. The EN to 5810 states that embroidery is obtained by working with embroidering threads on a pre-existing ground of tulle, net, velvet, ribbon, knitted or crocheted fabric, lace or woven fabric, or of felt or nonwovens. In the instant case, the ground fabric used in Exhibits 2 and 3 is a coarse square meshed canvas which is not presented as an exemplar in the EN to 5810, but is specifically described as a needle-worked tapestry ground fabric in the EN to 5805. Furthermore, the EN to 5810 notes that the ground fabric usually forms part of the completed embroidery and that as a rule, the entire design can only be seen on the right side of the fabric. Exhibits 2 and 3 do not incorporate the empty ground fabric as part of the design and the design can be seen on both sides of the canvas.
Based on the foregoing, we find that the subject articles identified as Exhibits 2 and 3 are properly classified as needle-worked tapestries in heading 5805, HTSUSA.
Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 FR 8711). Section 102.21 states, in pertinent part, the following: " . . . the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of this section and, where appropriate to the specific context, by application of the additional requirements or conditions of §§102.12 through §§102.19 of this part."
In this instance, the printed square mesh canvas of unknown origin (country “X”) is sent to the Philippines for stitching which makes it a product of two or more countries. Section 102.21(c)(1) provides for textile goods which are wholly obtained or produced in a single country, territory, or insular possession. Accordingly, Section 102.21(c)(1) is not applicable. Section 102.21(c)(2) provides the following:
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."
We have determined that the subject articles are classified in heading 5805, HTSUSA, and note that Section 102.21(e) in pertinent part states:
(1) The following rules will apply for purposes of determining the country of
origin of a textile or apparel product under paragraph (c)(2) of this
section: … HTSUS Tariff shift and/or other requirements 5805 … A
change to heading 5805 from any other heading, except from heading
5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407
through 5408, and 5512 through 5516, and provided that the change
is the result of a fabric-making process.” (emphasis supplied)
The printed square mesh canvas from country “X” is constructed of cotton and would be classified as a cotton woven fabric in Chapter 52, HTSUSA. Therefore, the tariff shift requirement of the Section 102.21(e) is not met, and Section 102.21(c)(2) is inapplicable.
In pertinent part, Section 102.21(c)(3) provides the following:
Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:
* * *
(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301
through 6306, and 6308, and subheadings 6209.20.5040, 6307.90,
and 9404.90, if the good was not knit to shape and the good was wholly
assembled in a single country, territory, or insular possession, the
country of origin of the good is the country, territory, or insular
possession in which the good was wholly assembled.
In making a determination as to whether or not the article has been “wholly assembled” in a single country pursuant to Section 102.21(c)(3)(ii), we note that 19 C.F.R. Section 10.16(a), provides that the “assembly” operation performed abroad may consist of any method used to join or fit together solid components, e.g., “sewing”. In this instance, the working of yarns over the square mesh canvas is analogous to a sewing type operation because it fills in the empty scrim. Thus, the needlework stitching added to the square mesh canvas in the Philippines is considered an “assembly” and the country of origin would be the Philippines. This is consistent with our decision in HQ 560332, dated September 5, 1997, in which a “filling-in” process involving the repair of garments abroad through the use of tufted yarn is an acceptable assembly operation.
Finally, we note that none of the provisions within heading 5805, HTSUSA, have Generalized System of Preferences (GSP) indicators in the special column rates of duty. However, the general column one rate of duty is free for all the provisions within heading 5805, HTSUSA.
HOLDING:
Based on the information provided, the country of origin for Exhibits 2
and 3 would be the Philippines.
The samples identified as Exhibits 2 and 3 appear to have a variety of needlework threads which consist of wool, cotton, and metallic man-made fibers, which have not been specifically identified by the importer. Therefore, we can only provide a classification at the six-digit level in subheading 5805.00, HTSUSA, which provides for “Hand-woven tapestries of the type Gobelins, Flanders, Aubusson, Beauvais and the like, and needle-worked tapestries (for example, petit point, cross stitch), whether or not made up.”
Classification at the statistical ten-digit level will depend on the needlework threads used in each imported article and may include the following provisions: Subheading 5805.00.2500, HTSUSA, which provides for “Hand-woven tapestries of the type Gobelins, Flanders, Aubusson, Beauvais and the like, and needle-worked tapestries (for example, petit point, cross stitch), whether or not made up: Other: Of wool or fine animal hair: Other”; Subheading 5805.00.3000, HTSUSA, which provides for “Hand-woven tapestries of the type Gobelins, Flanders, Aubusson, Beauvais and the like, and needle-worked tapestries (for example, petit point, cross stitch), whether or not made up: Other: Of cotton”; Subheading 5805.00.4010, HTSUSA, which provides for “Hand-woven tapestries of the type Gobelins, Flanders, Aubusson, Beauvais and the like, and needle-worked tapestries (for example, petit point, cross stitch), whether or not made up: Other: Other, Of man-made fibers”. The general column one duty rate for each of the aforementioned provisions is free. There is no longer a quota for heading 5805, HTSUSA, for the Philippines. However, a visa is required if the article is of wool.
The designated textile and apparel category may be subdivided into parts. If so, the 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 your client check, close to the time of shipment, the Textile Status Report for Absolute Quotas, previously available on the CBP Electronic Bulletin Board (CEBB), which is available now on the CBP web site at www.customs.gov.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, your client should contact the local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division