CLA-2-52:OT:RR:NC:N3:352
Mr. Richard G. Boswell
Ortiz International, Inc.
14610 Atlanta Drive
P.O.Box 1505
Laredo, TX 78042
RE: The tariff classification, status under the North American Free Trade Agreement (NAFTA), and country of origin determination for cotton woven fabric from Mexico; 19 CFR 102.21(c)(2); tariff shift; Article 509
Dear Mr. Boswell:
In your letter dated August 30, 2012, on behalf of Industrias Textil de Puebla, SA de CV, you requested a ruling on classification, status under the North American Free Trade Agreement and the country of origin for cotton woven fabric from Mexico.
FACTS:
The subject fabric, bearing the trade name Venus, is woven of yarns of different colors, giving the appearance of denim. Customs and Border Protection (CBP) laboratory analysis indicates that this fabric is of satin weave construction, with an overall composition by weight of 83.1% cotton, 15.1% textured polyester filament and 1.8% spandex, and weighs 397.4 g/m2. Your correspondence indicates that this fabric will be imported in a width of 127 cm and will be used to manufacture apparel.
The manufacturing operations are as follows:
The fabric will be woven in Mexico, from yarns spun and dyed in Mexico, from cotton grown in Mexico or the USA, elastomeric yarn extruded in Mexico or the USA, and polyester filaments extruded in Taiwan.
ISSUE:
What are the classification, status under the North American Free Trade Agreement (NAFTA), and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for this fabric, style name Venus, will be 5211.49.0090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for woven fabrics of cotton, containing less than 85 percent by weight of cotton, mixed mainly or solely with man-made fibers, weighing more than 200 g/m2: of yarns of different colors: other fabrics, other. The general rate of duty is 8.1% 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/.
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 NAFTA tariff shift rule for heading 5211 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, since the polyester filament, classified under heading 5402, is extruded in Taiwan, the goods described above do not qualify for preferential treatment under the NAFTA because they do not meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods will therefore not be entitled to a Free rate of duty under the NAFTA.
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 Mexico, where the fabric is woven. Since the fabric is formed by a fabric-making process in a single country, that is, Mexico, as per the terms of the tariff shift requirement and/or other requirements specified in paragraph (e), the country of origin is conferred in Mexico.
HOLDING:
The country of origin of the fabric Venus is Mexico for marking purposes.
However, the merchandise does not qualify for preferential treatment under the NAFTA because the requirements for originating status under the NAFTA are not met.
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.
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,
Thomas J. Russo
Director
National Commodity Specialist Division