CLA-2-42:OT:RR:NC:N4:441
John Paul Vyborny
Capin-Vyborny, LLC
949 W. Bell Road
Nogales, AZ 85621
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a tote bag from Mexico; Article 509
Dear Mr. Vyborny:
In your letter dated May 22, 2014, you requested a ruling on the status of tote bags from Mexico under the NAFTA. In your letter you mention numerous style numbers but have submitted samples of only one style. This ruling is applicable only to the submitted samples.
You have submitted two samples with the same style number, 8010. They are shopping-style tote bags. They are identical except for the color. The bags are constructed with an outer surface of non-woven polypropylene textile material. This construction is considered to be man-made textile for tariff purposes. The bags are designed to provide storage, protection, portability, and organization to groceries or other personal effects during travel. The bags feature an open top without a closure, two carrying handles, and an unlined interior. They measures approximately 13” (W) x 15” (H) x 10” (D). The bags are of a durable construction and suitable for repetitive use.
The applicable subheading for style 8010 will be 4202.92.3031, Harmonized Tariff Schedule of the United States (HTSUS), which provides for travel, sports, and similar bags, with outer surface of textile material, other, other, of man-made fibers, other. The general rate of duty will be 17.6% 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/.
You have described the manufacturing operations for the tote bags as follows:
The non-woven fabric originating from China will be shipped in large rolls directly from China to Mexico. This fabric is classified in Heading 5603 of the HTSUS. Thread (of heading 5401) and paperboard (heading 4804) of USA origin will also be shipped to Mexico to be used in the manufacturing of the bags. In Mexico, the fabric will be cut into component pieces and sewn to assemble the tote bags.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under 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 tote bags undergo assembly operations in Mexico which is a country provided for under the NAFTA. The bags are constructed partially of non-originating materials. As such, neither rule (i) nor rule (iii) apply. Under rule (ii), the tote bags at issue will be eligible for NAFTA preference if it qualifies to be marked as a good of Mexico and if it is transformed in Mexico so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUS. For heading 4202, HTSUS, the appropriate subdivision (t), Chapter 42 rule states that:
A change to subheading 4202.92 from any other chapter, except from headings 5407, 5408, or 5512 through 5516 or tariff items 5903.10.15, 5903.10.18, 5903.10.20, 5903.10.25, 5903.20.15, 5903.20.18, 5903.20.20, 5903.20.25, 5903.90.15, 5903.90.18, 5903.90.20, 5903.90.25, 5906.99.20, 5906.99.25, 5907.00.05, 5907.00.15, 5907.00.15 or 5907.00.60.
The fabrics of heading 5306 are not excluded from the tariff shift rule. Thus, based on the facts provided; the tote bags described above qualify for NAFTA preferential treatment. They will meet the requirements of HTSUS General Note 12(b) (ii) (B). The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements
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 Vikki Lazaro at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division