Customs Ruling NY J86017 - Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for pillow shams, bed skirts and pillows; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; Article 509

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NY J86017
Jul 24, 2003

Type : Classification • HTSUS :

CLA-2-RR:NC:TA:349 J86017

Ms. Maria E. Celis
Neville Peterson LLP
80 Broad Street, 34th Floor
New York, NY 10004

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for pillow shams, bed skirts and pillows; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; Article 509

Dear Ms Celis:

This is in reply to your letter dated July 5, 2003, requesting a classification, status under the NAFTA and country of origin determination for pillow shams, bed skirts and pillows which will be imported into the United States. This ruling is requested on behalf of Furnimex, Inc.

FACTS:

The subject merchandise consists of pillow shams, bed skirts and pillows. You submitted samples of these items. The face side of the pillow shams is made from a 51 percent cotton and 49 percent polyester jacquard woven fabric. The reverse side is made from a 70 percent polyester and 30 percent cotton plain woven fabric. The shams, which measure approximately 39 x 29.5 inches, have an overlapping flap closure or placket on the back. The edges of the shams have a flange or picture frame effect. This 1.5-inch border contains a small amount of polyester fiberfill. The bed skirts consist of a platform section and a skirt. The skirt portion is made from a 56 percent rayon and 44 percent polyester jacquard woven fabric while the platform section is made from a 50 percent cotton and 50 percent polyester plain woven fabric. The skirt, which is sewn to three sides of the platform, has a 13.5-inch drop.

The outer shell of the pillows is made from two fabrics. One side is made from a 51 percent cotton and 49 percent polyester jacquard woven fabric while the other side is made from a 70 percent polyester and 30 percent cotton woven fabric. The pillows measure approximately 17 inches square. They are stuffed with a loose polyester fiberfill. A corded piping is inserted in the edge seams. The manufacturing operations for the pillow shams, bed skirts and pillows are as follows:

CHINA: -rayon and polyester jacquard fabric (bedskirts) is woven and finished. -cotton and polyester jacquard fabric (shams, pillows) is woven and finished. -rolls of fabric are shipped to Mexico.

PAKISTAN: -70/30 polyester and cotton fabric (shams, pillows) is woven and finished. -rolls of fabric are shipped to Mexico.

UNITED STATES: -50/50 polyester and cotton fabric (platform section) is woven and finished. -rolls of fabric are shipped to Mexico.

MEXICO: -fabrics are cut to size and shape. -components are sewn forming the pillow shams and bed skirts. -cut fabric is sewn and trimmed creating a pillow shell. -shell is stuffed with fiberfill and sewn closed finishing the pillows. -pillow shams, bed skirts and pillows are packed and shipped.

The origin of the small amount of polyester batting used in the shams and the fiberfill used in the pillows was not indicated. However, those components will not effect the NAFTA or country of origin determination in this manufacturing scenario.

ISSUE:

What are the classification, eligibility under NAFTA and country of origin for the subject merchandise?

CLASSIFICATION:

The applicable subheading for the pillow shams will be 6304.92.0000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for other furnishing articles, excluding those of heading 9404: other: not knitted or crocheted, of cotton. The general rate of duty will be 6.4 percent ad valorem.

The applicable subheading for the bed skirts will be 6303.99.0010, which provides for curtains (including drapes) and interior blinds; curtain or bed valances: other: of other textile materials… of artificial fibers. The general rate of duty will be 11.4 percent ad valorem.

The applicable subheading for the pillows will be 9404.90.2000, HTSUSA, which provides for mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with any material or of cellular rubber or plastics, whether or not covered: other: pillows, cushions and similar furnishings: other. The general rate of duty will be 6 percent ad valorem.

The pillow shams fall within textile category designation 369 and the bed skirts fall within textile category designation 666. The pillows fall under a subheading that is not assigned a textile category designation. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the Textile Status Report for Absolute Quotas, which is available at our Web site at www.cbp.gov. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment.

NAFTA ELIGIBILITY:

The pillow shams and pillows undergo processing operations in Mexico and the bed skirts under go processing operations in the United States and Mexico. The United States and Mexico are countries provided for under the North American Free Trade Agreement. These products will be eligible for the NAFTA preference if they qualify to be marked as a good of Mexico and if they are wholly obtained or produced in the NAFTA territories or transformed in Mexico so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUSA. For headings 6303, 6304 and 9404, HTSUSA, the appropriate subdivision (t) rule states that:

A change to heading 6303 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 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one of more of the NAFTA parties. 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 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one of more of the NAFTA parties.

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 addition to the above heading and subheading rules, there is a Chapter rule for Chapter 63. Chapter rule 1, General Note 12(t)63 states:

Chapter rule 1: 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.

The component that determines the classification of the bed skirts and pillow shams is the foreign jacquard fabric that was woven in China. The pillows are made from two foreign fabrics. When the 51/49 cotton and polyester jacquard fabric and the 56/44 polyester and rayon jacquard fabric leaves China and the 70/30 polyester and cotton woven fabric leaves Pakistan, they are classified in headings 5210 or 5211, 5513 or 5514, HTSUSA, depending on the weight and heading 5516, HTSUSA. As fabrics of headings 5210, 5211, 5513, 5514 and 5516, HTSUSA, are excepted from meeting the tariff change to headings 6303, 6304 and subheading 9404.90, HTSUSA, it would initially appear that the non-originating materials from China and Pakistan do not undergo the requisite change in tariff classification.

It is noted, however, that the Appendix to Part 181 of the Customs Regulations (19 CFR Part 181), which sets forth the NAFTA rules of origin regulations, specifies rules for determining whether certain non-originating materials undergo an applicable change in tariff classification when used in self-made goods. The Appendix to Part 181, Part II, Section 4 ("Originating Goods")(8), states:

For purposes of determining whether non-originating materials undergo an applicable change in tariff classification, a self-produced material may, at the choice of the producer of the good into which the self-produced material is incorporated, be considered as an originating material or non-originating material, as the case may be, used in the production of that good.

The fabric shells, which are manufactured in Mexico prior to the completed pillows, are considered a “self-produced material.” The shams and bed skirts are not formed with a “self-produced material” and therefore this rule is inapplicable for those items. On the basis of the foregoing, the producer of the pillows ("the good") has the option of identifying the pre-formed pillow shells ("the self-produced material") as non-originating materials. If this choice is made, the pillow shells (classifiable under subheading 6307.90, HTSUS) fall within a tariff provision that is not excepted by the tariff shift rule set forth in subdivision (t). Accordingly, the pillow shells would be deemed as undergoing the requisite change in tariff classification.

Pursuant to the analysis set forth above, the pillows qualify as an originating good. Accordingly, they will be entitled to the special "MX" rate of duty if they qualify to be marked as a good of Mexico and provided that all other NAFTA requirements are met. The non-originating material used in the pillow shams and bed skirts do not undergo the requisite change in tariff classification. Accordingly, the pillow shams and bed skirts runner are not eligible for the NAFTA preference.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

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 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 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:"

HTSUS Tariff shift and/or other requirements

6301-6306 Except for goods of heading 6302 through 6304 provided for in paragraph (e)(2) of this section, 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.

9404.90 Except for goods of subheading 9404.90 provided for in paragraph (e)(2) of this section, 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.

Subheading 6303.99 is included in the paragraph (e)(2) exception to the above tariff shift rule. Paragraph (e)(2)(i) is not applicable as the fabrics comprising the bed skirts are not dyed and printed. Paragraph (e)(2)(ii) states that “If the country of origin cannot be determined under paragraph (e)(2)(i) of this section, except for goods of HTSUS subheading 6117.10 that are knit to shape or consist of two or more component parts, the country of origin is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.” The bed skirts are made from two fabrics. As the fabrics comprising the bed skirts are formed in more than one country, Section 102.21 (c)(2) is inapplicable.

Subheadings 6304.92 and 9404.90.20 are not included in the paragraph (e)(2) exception to the above tariff shift rules. As the fabrics comprising the pillow shams and pillows are formed in more than one country, Section 102.21(c)(2) is inapplicable for those items.

Section 102.21(c)(3) states that, "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.

As the pillow shams, bed skirts and pillows are not knit and headings 6303, 6304 and subheading 9404.90, HTSUSA, are excepted from provision (ii), 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) and Part 102.21(c)(3)(ii). The fabrics that make up the pillow shams, bed skirts and pillows are sourced in more than one country. As no one fabric is more important than the other, a single country of origin determination cannot be made based on Section 102.21(c)(4).

Paragraph (c)(5) states that "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". Accordingly, in the case of the subject pillow shams, bed skirts and pillows, country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Mexico.

HOLDING:

The country of origin of the pillow shams, bed skirts and pillows is Mexico. The pillow shams and bed skirts are not eligible for the NAFTA preferential rate. If the producer in Mexico opts to identify the “self-produced material” as a non-originating material, the pillow will be entitled to the NAFTA “MX” duty rate of Free upon compliance with all applicable laws, regulations and agreements. These products are not subject to quota or visa restrictions.

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 181.100(a)(2). 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 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 181.100(a)(2), 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.

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 John Hansen at 646-733-3043.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,
National Commodity
Specialist Division