CLA 2-OT:RR:NC:TA:352
Mr. Eduardo Acosta
Richard L. Jones Calexico Inc.
8830 Siempre Viva Road, Suite 100
San Diego, CA 92154
RE: Classification, status under the North American Free Trade Agreement, and country of origin determination for squares or rectangles of 100% cotton woven fabric intended to be used as gun cleaning patches; General Note 12(b)(ii); 19 CFR 102.19(b); NAFTA Preference Override; 19 CFR 102.21(c)(2); tariff shift; Article 509
Dear Mr. Acosta:
This is in reply to your letter dated February 3, 2010, on behalf of your client Safariland Ltd., requesting classification, status under the North American Free Trade Agreement and country of origin determination for squares or rectangles of 100% cotton woven fabric intended to be used as gun cleaning patches and which will be imported into the United States.
FACTS:
According to the information provided, the fabric used to manufacture the subject merchandise is 100% cotton flannel plain woven fabric, with a width of 45 inches. This bleached and napped fabric is woven with 16.53 single yarns per centimeter in the warp and 17.32 yarns in the filling, and weighs 136 grams per square meter.
The manufacturing operations for the gun cleaning patches are as follows:
The fabric will be formed in the USA from yarns wholly formed in the USA. The origin of the fibers was not provided. The fabric will be exported to Mexico in rolls with a width of 45 inches. In Mexico, the rolls of fabric will be cut into squares or rectangles of various sizes. The only processes that will be done in Mexico will be the cutting and the packaging of this fabric. The finished product will not be hemmed or rolled at the edges. It will not be made up according to the terms of Note 7 to Section XI, Harmonized Tariff Schedule of the United States (HTSUS).
ISSUE:
What are the classification, status under the NAFTA, and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for the finished gun cleaning squares will be 5208.22.4040, HTSUS, which provides for Woven fabrics of cotton, containing 85 percent or more by weight of cotton, weighing not more than 200 g/m2: Bleached: Plain weave, weighing more than 100 g/m2: Of number 42 or lower number: Sheeting. The general rate of duty will be 8.4%.
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/.
NAFTA - LAW AND ANALYSIS:
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;
The rule for heading 5208 states:
A change to headings 5208 through 5212 from any heading outside that group, except from headings 5106 through 5110, 5205 through 5206, 5401 through 5404 or 5509 through 5510.
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods 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:
(1) A change from greige fabric of heading 5208 through 5212 to
finished fabric of heading 5208 through 5212 by both dyeing and printing
when accompanied by two or more of the following finishing operations:
bleaching, shrinking, fulling, napping, decating, permanent stiffening,
weighting, permanent embossing, or moireing; or
(2) If the country of origin cannot be determined under (1) above, a change to heading 5208 through 5212 from any heading outside that group, provided that the change is the result of a fabric-making process.
Section 102.21(b)(2) of the Customs Regulations defines the meaning of a "fabric-making" process for the purposes of the determination of the country of origin of imported textile and apparel products for purposes of Customs laws and the administration of quantitative restrictions. This section states:
(2) Fabric-making process. A fabric-making process is any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarns, twine, cordage, rope, or fabric strips and results in a textile fabric.
In the case before us for consideration the only country where a fabric-making process occurs is in the United States, where yarns are used to form the fabric by weaving. As the fabric is formed by a fabric-making process in a single country, that is, the United States, as per the terms of the tariff shift requirement and/or other requirements specified in paragraph (e), country of origin is conferred in the United States.
However, the gun cleaning patches qualify as a NAFTA originating good. As stated in Section 102.19(b):
If, under any provision of this part, the country of origin of a good which is originating within the meaning of § 181.1(q) of this chapter is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.
Based on the facts presented, the gun cleaning patches are an originating good under NAFTA and have been determined under section 102.21(c)(2) to be a good of U.S. origin. Because the articles were returned to the U.S. after having been advanced in value or improved in condition in Mexico by virtue of cutting into small squares and rectangles, the country of origin of the gun cleaning patches for Customs duty purposes is Mexico, pursuant to Section 102.19(b). Accordingly, the "MX" NAFTA rate will be applicable to the gun cleaning patches.
As the origin of the gun cleaning patches for the purposes of marking has been determined to be the United States, the patches are not required to be marked as a foreign article for the purposes of 19 U.S.C. 1304. Whether an article may be marked with the phrase “Made in the USA” or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 on the propriety of proposed markings indicating that an article is made in the United States.
HOLDING:
The country of origin of the gun cleaning patches is the United States for marking purposes. By virtue of the NAFTA Override in 19 CFR 102.19(b), the country of origin of the patches is Mexico for Customs duty purposes; they are entitled to the NAFTA “MX” special duty rate of “Free” upon compliance with all applicable laws, regulations and agreements.
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 is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the 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 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 Maribeth Dunajski at (646) 733-3045.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division