CLA 2-OT:RR:NC:N3:351
Ms. Krystavel Zulaica
B.A.G. Corp.
P.O. Box 245
Savoy, TX 75479
RE: Classification and country of origin determination for flexible intermediate bulk containers; 19 CFR 102.21(c)(5)
Dear Ms. Zulaica:
This is in reply to your letter dated April 25, 2012, requesting a classification and country of origin determination for flexible intermediate bulk containers (FIBCs) which will be imported into the United States.
FACTS:
The subject merchandise is an FIBC. A sample was submitted with your ruling request; it will be returned under separate cover. The sample is woven of textile strips of polypropylene. It measures 36” x 36” x 36”. It has a looped lifting strap at each top corner made of 3”-wide textile webbing. It is closed on top except for a woven textile filling spout that can be tied shut with attached 3/4”-wide webbing straps, and it has an emptying spout on the bottom panel that can be similarly tied shut. The FIBC weighs more than one kilogram.
Some FIBCs contain a separate inner lining of polyethylene sheeting. The lining is specifically made and shaped to fit inside the FIBC. The FIBC with a fitted plastic liner would be considered a composite good for tariff purposes, with the essential character imparted by the FIBC. General Rule of Interpretation 3(b), Harmonized Tariff Schedule of the United States (HTSUS), noted.
The manufacturing operations for the FIBC are as follows: fabric from various countries, including Turkey and India, are imported into Mexico where the FIBC is assembled; some of the fabric is manufactured in Mexico. The webbing and the liner are manufactured in the United States.
In one scenario, the FIBC will be manufactured using fabric from a single country, (China, India, Mexico, or another). In another scenario, fabrics from multiple countries will be used; you state that this depends on the width or weight requirements of the FIBC panels. If a narrower or heavier panel is needed, a fabric from a different country may be used. However, in both scenarios, the webbing fabric is of U.S. origin. You request that we determine the country of origin for each of these scenarios.
ISSUE:
What are the classification and country of origin for the subject merchandise?
CLASSIFICATION:
The applicable subheading for the flexible intermediate bulk container with or without the plastic liner will be 6305.32.0010, HTSUS, which provides for sacks and bags, of a kind used for the packing of goods: of man-made textile materials: flexible intermediate bulk containers, weighing one kilogram or more. The rate of duty will be 8.4% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
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 Fed. Reg. 8711). Thus, 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 Section 102.21.
Paragraph (c)(1) states, “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, “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 of the foreign materials 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) in pertinent part states,
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:
HTSUS Tariff shift and/or other requirements
6305 The country of origin of a good classifiable under heading 6301 through 6306 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
Because the fabric in each scenario is from multiple countries, including the webbing from the U.S., Section 102.21(c)(2) is inapplicable.
Section 102.21(c)(3) states,
Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:
(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or
(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 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 [emphasis added].
The subject merchandise is not knit to shape, and while it is wholly assembled in a single country, heading 6305 is excluded from this section, so Section 102.21 (c)(3) is inapplicable.
Section 102.21 (c)(4) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred.”
In the case of the subject merchandise, the most important manufacturing process occurs at the time of fabric making. Basing the country of origin determination on the fabric-making process as opposed to the assembly process carries out the clear intent of Section 334 as expressed in Section 334(b)(2).
However, since in each scenario a significant amount of fabric is made in the U.S. (more than would be considered de minimus according to the terms of Section 102.13(c)), a single country of origin determination cannot be made based on Section 102.21(c)(4).
Paragraph (c)(5) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory or insular possession in which an important assembly or manufacturing process occurred.”
Regardless of the origin of the fabrics, the FIBCs are assembled in Mexico. Accordingly, country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Mexico.
MARKING:
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain. Section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. Accordingly, if Customs is satisfied that the article will remain in its container until it reaches the ultimate purchaser and if the ultimate purchaser can tell the country of origin of the FIBCs by viewing the container in which it is packaged, the individual FIBCs would be excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d). Accordingly, marking the container in which the FIBCs are imported and sold to the ultimate purchaser in lieu of marking the article itself is an acceptable country of origin marking for the imported FIBCs provided the port director is satisfied that they will remain in the marked container until they reach the ultimate purchaser.
Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. In this case, the ultimate purchaser of the FIBCs is the customer who purchases the product for use as packing, whether that customer buys it from you or further down the chain of sale.
As the country of origin of the FIBCs assembled in Mexico will be Mexico, marking them as “Assembled in Mexico” or “Made in Mexico” will satisfy the requirements of Section 304, Tariff Act of 1930 (19 U.S. C. 1304).
HOLDING:
The country of origin of the FIBCs, is Mexico, where the FIBC is assembled, and they must be marked to so indicate.
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, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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.
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Mitchel Bayer at (646) 733-3102.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division