CLA-2-63:OT:RR:NC:TA:349
Mr. Juan Jose Alvarado
Alvarado Brokerage & Dispatch, Inc.
12122 Jef Drive
Laredo, TX 78045
RE: The tariff classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for sheet sets, bed skirts, shams, duvet covers and comforters from Mexico; 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.21(c)(4); most important assembly or manufacturing process; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.19(a); NAFTA Preference Override; Article 509
Dear Mr. Alvarado:
In your letter dated April 13, 2009 you requested a ruling on the country of origin and status under the NAFTA for sheet sets, bed skirts, shams, duvet covers and comforters from Mexico. This request is made on behalf of Kaltex Home, S.A. DE C.V.
The merchandise consists of sheet sets, bed skirts, pillow shams, duvet covers and comforters. Samples of those products were not submitted but you supplied a swatch of a printed and dyed fabric. These items will be made from 100 percent cotton woven fabric, 60 percent cotton and 40 percent polyester woven fabric or 50 percent polyester and 50 percent cotton woven fabric. The fabrics will be both dyed and printed. The comforters will be stuffed with a polyester batting and quilted. All of these products may or may not contain embroidery, lace, braid, edging, trimming, piping or appliqué work. The manufacturing operations for the bedding sets are stated to be as follows:
CHINA, INDIA or PAKISTAN:
-cotton or polyester/cotton fabrics are woven.
-griege fabrics are shipped to Mexico.
MEXICO:
-fabrics are bleached, both printed and dyed and subjected to various finishing operations.
-fabrics are cut to size and shape.
-components are sewn creating the sheet sets, duvet covers, shams and bed skirts.
-components are sewn on 3 sides creating the comforter shell.
-polyester batting fabric is formed from Mexican and Taiwanese fibers.
-batting is cut to size and stuffed into the comforter shell.
-comforter is sewn closed and quilted.
-sheet sets, bed skirts, shams duvet covers and comforters are packaged and shipped.
You note in your request that each item will only be made from a single type of woven fabric which will be sourced from a single country.
Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.
Please note, due to the fact that the some of the sheet sets, bed skirts, shams, duvet covers and comforters are to be constructed of a 50/50 blend of fibers, they will be classified using Section XI Subheading Note 2(A) and Section Note 2(A). Also, Additional U.S. Rule of Interpretation 1(d) states that the principles of Section XI regarding mixtures of two or more textile materials shall apply to the classification of goods in any provision in which a textile material is named. The sheet sets, bed skirts, shams, duvet covers and comforters will be classified as if they consisted wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit considerations. Even a slight change in the fiber content may result in a change of classification. The sheet sets, bed skirts, shams, duvet covers and comforters may be subject to Customs & Border Protection laboratory analysis at the time of import and if the fabric is other than a 50/50 blend they may be reclassified by Customs & Border Protection at that time.
The applicable tariff provision for sheet sets and duvet covers made from 100 percent cotton or chief weight cotton woven fabrics will be 6302.21, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other printed bed linen, of cotton. The general rate of duty will be 20.9 percent or 6.7 percent ad valorem depending upon whether or not these items contain any embroidery, lace, braid, edging, trimming, piping or appliqué work.
The applicable tariff provision for sheet sets and duvet covers made from 50 percent polyester and 50 percent cotton woven fabrics will be 6302.22, HTSUS, which provides for other printed bed linen, of man-made fibers. The general rate of duty will be 14.9 percent or 11.4 percent ad valorem depending upon whether or not these items contain any embroidery, lace, braid, edging, trimming, piping or appliqué work.
The applicable tariff provision for cotton or chief weight cotton bed skirts will be 6303.91.0020, HTSUS, which provides for curtains (including drapes) and interior blinds; curtain or bed valances: other: of cotton… other. The general rate of duty will be 10.3 percent ad valorem.
The applicable tariff provision for 50 percent polyester and 50 percent cotton bed skirts will be 6303.92.2050, HTSUS, which provides for curtains (including drapes) and interior blinds; curtain or bed valances: other: of synthetic fibers: other… other. The general rate of duty will be 11.3 percent ad valorem.
The applicable tariff provision for cotton or chief weight cotton pillow shams will be 6304.92.0000, HTSUS, 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 6.3 percent ad valorem.
The applicable tariff provision for 50 percent polyester and 50 percent cotton pillow shams will be 6304.93.0000, HTSUS, which provides for other furnishing articles, excluding those of heading 9404: other: not knitted or crocheted, of synthetic fibers. The general rate of duty will be 9.3 percent ad valorem.
The applicable tariff provision for cotton or chief weight cotton comforters will be 9404.90, HTSUS, 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: other: quilts, eiderdowns, comforters and similar articles. The general rate of duty will be 4.4 percent or 12.8 percent ad valorem depending upon whether or not the comforters contain any embroidery, lace, braid, edging, trimming, piping or appliqué work.
The applicable subheading for the 50 percent polyester and 50 percent cotton comforters will be 9404.90.8522, HTSUS, 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: other: other: quilts, eiderdowns, comforters and similar articles… with outer shell of man-made fibers. The general rate of duty will be 12.8 percent 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/.
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
The sheet sets, bed skirts, shams, duvet covers and comforters undergo processing operations in Mexico. Mexico is a country provided for under the NAFTA. 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 materials undergo a change in tariff classification described in subdivision (t) to General Note 12, HTSUS. For headings 6302, 6303, 6304 and 9404, HTSUS, the appropriate subdivision (t) rules state that:
A change to headings 6301 through 6302 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 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.
When the non-originating cotton and chief weight cotton greige fabrics leave Pakistan, India or China they are classified under headings 5208, 5209, 5210 or 5211, HTSUS depending on the composition and weight while the greige 50/50 polyester and cotton fabric is classified in heading 5513 or 5514, HTSUS, depending on the weight. As fabrics of these headings are excepted from meeting the tariff change to subheadings 6302, 6303, 6304 and 9404.90, HTSUS, it would initially appear that the non-originating material from Pakistan, India or China does not undergo the requisite change in tariff classification for all of these items. The polyester fibers used to make the batting for the comforter make the change in 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 only item in this ruling that would benefit from this rule is the comforters. The comforter shells, which are manufactured in Mexico prior to the completed comforters, are considered a “self-produced material.” On the basis of the foregoing, the producer of the comforters ("the good") has the option of identifying the shells ("the self-produced material") as non-originating materials. If this choice is made, the comforter 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 comforters would be deemed as undergoing the requisite change in tariff classification.
Pursuant to the analysis set forth above, if the producer chooses to identify the comforter shells as his “self-produced material,” the comforters qualify as an originating good. Accordingly, they will be entitled to the special "MX" rate of duty of Free if they qualify to be marked as a good of Mexico and provided that all other NAFTA requirements are met. If that option is not chosen, the comforters do not qualify for preferential treatment. The sheet sets, bed skirts, shams and duvet covers do not qualify for preferential treatment under the NAFTA because none of the above requirements are met.
In addition, if a self-produced material claim is not made for the comforters they may be subject to a reduced rate of duty based upon the Tariff Preference Levels (TPL) established in Section XI, Additional U.S. Note 4(b), up to the annual quantities specified in subdivision (d) of Note 4. Upon completion of the required documentation and up to the specified annual quantities, the comforters may be eligible for the preferential rate of Free.
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 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.
Subheadings 6302.22, 6303.92, 6304.93, and 9404.90.85, HTSUS, are included in the paragraph (e)(2) exception to the above tariff shift rules however, goods classified within those subheading as of cotton or which consist of blends containing 16 percent or more by weight of cotton are excepted. The sheet sets, bed skirts, shams and duvet covers are made from a single fabric. As the fabric comprising the sheet sets, bed skirts, shams and duvet covers is formed in a single country, that is, Pakistan when woven in Pakistan, India when woven in India and China when woven in China, as per the terms of the tariff shift requirement, country of origin is conferred in Pakistan, India or China.
You have indicated that the comforters are made from an outer shell fabric and a batting fabric. As the fabrics comprising the comforters are formed in more than one country, Section 102.21 (c)(2) is inapplicable.
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 comforters are not knit and subheading 9404.90, HTSUS, is 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). In the case of the subject comforters, the fabric making process of the outer shell constitutes the most important manufacturing process. The outer shells of the comforters are made from fabrics formed in a single country. Accordingly, the fabric making process in China, India or Pakistan, where the fabric for the outer shell is formed, constitutes the most important manufacturing process and the country of origin for the comforters is China, India or Pakistan.
However, the comforters qualify as NAFTA originating goods. 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.
Assuming that the producer opts to identify the comforter shells as a "self-produced material," the comforters qualify as a NAFTA originating good and applying the terms of Section 102.19(a), the country of origin of the comforters is Mexico. They will be entitled to the special "MX" duty rate, provided that all other requirements of the NAFTA are met. If the producer does not opt to identify the comforter shells as a "self-produced material," the above override does not apply and the country of origin of the comforters remains China, India or Pakistan as determined above.
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 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 and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division