CLA-2-55:RR:NC:N3:351 L87056
Debby Rancourt
Norman G. Jensen, Inc.
P.O.Box 120, 108 Marsh Road
Norton, VT 05907
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of yarns from Canada; country of origin; 19 C.F.R. §102.21(c)(2); Article 509
Dear Ms. Rancourt:
In your letter dated August 18, 2005, you requested a ruling on the status of yarns from Canada under the NAFTA on behalf of your client, Filature Lemieux, Inc, of Quebec.
FACTS:
You have submitted four yarn samples. Style MFT 344 is a 4-ply yarn made of two plies of polyfilament (27%) and two plies of the following: 18.25% rayon, 40.15% polyester staple fibers, and 14.6% acrylic staple fibers.
DMF444 is three plies. One ply is polyfilament (27%) and two plies are 18.25% rayon, 40.15% polyester staple fibers, and 14.6% acrylic staple fibers.
MF44-T344 is four plies with two plies of polyfilament (27%); the other two plies are 18.25% rayon, 40.15% polyester staple fibers, and 14.6% acrylic staple fibers.
MFT 300 is also four plies with two plies of polyfilament (27%); the other two plies are 29.2% rayon and 43.8% polyester polyester staple fibers.
In a telephone conversation with this office, Mr. Serge Lemieux of Filature Lemieux stated that the term “polyfilament” means polyester filament yarn, and that the polyester yarns and the rayon are of U.S. origin; also, the rayon is staple fiber. The acrylic fibers are made in Spain.
You state that the four yarns are manufactured in the following manner: the fibers are imported into Canada where they are dyed and manufactured into yarns.
ISSUES:
What are the classification, eligibility under NAFTA, and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable tariff provision for styles MFT 344, DMF444, and MF44-T344 will be 5509.59.0000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Yarn (other than sewing thread) of synthetic staple fibers, not put up for retail sale: Other yarn, of polyester staple fibers:. . . other. The general rate of duty will be 13.2% ad valorem.
The applicable tariff provision for style MFT 300 will be 5509.51.6000, HTS, which provides for Yarn (other than sewing thread) of synthetic staple fibers, not put up for retail sale: Other yarn, of polyester staple fibers: Mixed mainly or solely with artificial staple fibers: Multiple (folded) or cabled yarn. The general rate of duty will be 10.6% ad valorem.
NAFTA ELIGIBILITY:
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
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
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the non-originating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
The change required in General Note 12(t) for goods classified in Chapter 55 requires, in pertinent part,
1A. A change to headings 5501 through 5511 from any other chapter [emphasis added], except from headings 5201 through 5203 or 5401through 5405.
All of the yarns are classified in Chapter 55. Styles MFT 344, DMF444, and MF44-T344 contain acrylic staple fibers of Spanish origin; these fibers would also be classified in Chapter 55 and thus would not meet the change in tariff classification required.
Styles MFT 344, DMF444, and MF44-T344 do not qualify for preferential treatment under the NAFTA because none of the above requirements of General Note 12(b), HTSUS, are met.
Style MFT 300, however, is made of fibers of U.S. origin, according to your information. You have not stated the origin of the polymers from which the man-made fibers are manufactured. However, since the polymers (which would be classified in Chapter 39, HTSUSA) were processed into fibers in the U.S., the yarn MFT 300 qualifies for NAFTA preferential treatment because it will meet the requirements of either HTSUSA General Note 12(b)(i) or 12(b)(ii), depending on the status of the original raw material from which the man-made fibers were made.
Style MFT 300 will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
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
5508-5511 A change to heading 5508 through 5511 from any heading outside that group, provided that the change is a result of a spinning process.
Section 102.21(e) states that the change must be from any heading outside of headings 5508 through 5511 and be the result of a spinning process. As the yarns of heading 5509 are spun in Canada from filaments of Chapter 54 and fibers of headings 5503 and 5504, HTSUSA, they meet the tariff shift requirements of Section 102.21(c)(2).
HOLDING:
The country of origin of the yarn is Canada. Styles MFT 344, DMF444, and MF44-T344 do not qualify for preferential treatment under the NAFTA, while style MFT 300 does qualify.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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.
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 and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division