CLA-2-59:OT:RR:NC:N3:350
Debra Guillow
Montgomery International Inc.
1300 Military Road
Kenmore, NY 14217
RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA) for textile hosepiping from Canada; 19 CFR 102.21(c)(2); tariff shift; Article 509
Dear Ms. Guillow:
In your letter dated August 11, 2014, on behalf of Sanexen Environmental Services Inc., you requested a ruling on tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA) for textile hosepiping from Canada. Samples of the finished hosepiping, as well as the yarns used to produce the hosepiping, were provided to this office.
FACTS:
The subject item, Product Code F4960E00X, is a hosepiping product composed of two concentric layers of fabric (internal jacket and external jacket) lined with a layer of plastic material.
According to the information provided, the manufacturing operations and facts are as follows:
Both jackets (fabric layers) are circular woven in Canada.
The yarns used in the warp or longitudinal direction in both jackets are spun, that is, staple fiber yarns, classified in heading 5509, Harmonized Tariff Schedule of the United States (HTSUS), and are made in the USA. (The suggested classification of this yarn under heading 5402, HTSUS, is incorrect, as this yarn is a staple fiber yarn and Chapter 54 covers filament yarns.)
The yarns used in the weft or circumferential direction in both jackets are filament yarns classified in heading 5402 and are made in Korea. (The suggested classification of this yarn under heading 5604, HTSUS, is incorrect, as this yarn is not coated, covered or sheathed with rubber or plastics.)
The internal jacket has an internal polymeric liner adhered to it.
The polymeric liner is produced by the co-extrusion of a two-layer tubular membrane of thermoplastic urethane and is classified in Chapter 39, HTSUS. The material for one of the layers is made in the USA, the other in Japan.
The polymeric liner is inserted into the internal jacket and is passed through an oven where it is thermally adhered onto the internal surface of the internal jacket.
The internal jacket with lining is inserted into the external jacket by pulling.
The hosepiping is completed and ready for shipment.
All of the fabric-making processes, thermal adhesion of the polymeric liner and the insertion of the internal jacket with lining into the external jacket are performed at Niedner, Inc., Coaticook, Quebec, Canada.
Your correspondence indicates that the finished product is sold by Niedner Inc., to Sanexen, Brossard, Canada, and exported directly from Canada by Sanexen to the USA to local contractors or to municipal and other watermain utility operators in the United States to be used as a pipeliner product to repair watermains.
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 textile hosepiping, Product Code F4960E00X, will be 5909.00.2000, HTSUS, which provides for Textile hosepiping and similar textile tubing, with or without lining, armor or accessories of other materials: other. The general rate of duty is 3.3 % 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;
For goods classified in heading 5909, General Note 12/59.4 requires:
A change to heading 5909 from any other chapter, except from headings 5111 through 5113, 5208 through 5212 or 5310 through 5311, chapter 54, or headings 5512 through 5516.
Based on the facts provided, all of the non-originating materials undergo the required tariff shift with the exception of the polyester filament yarn from Korea. Since the polyester filament yarn, which is classified in Chapter 54, does not undergo the tariff shift required by the tariff specific rule for heading 5909, the goods described above do not qualify for preferential treatment under the NAFTA, as 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 5909 - Tariff shift and/or other requirements:
(1) A change to heading 5909 from any other chapter, except from heading 5007, 5111 through 5311, 5407 through 5408, 5512 through 5516, 5603, 5801 through 5804, 5806, 5808, and 6001 through 6006, and provided that the good does not contain armor or accessories of nontextile material and 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 Canada, where the hosepiping is woven. Since the non-originating materials meet the required tariff shifts, and the hosepiping is formed by a fabric-making process in a single country, that is, Canada, as per the terms of the tariff shift requirement and/or other requirements specified in paragraph (e), the country of origin is conferred in Canada.
HOLDING:
The applicable subheading for textile hosepiping Product Code F4960E00X will be 5909.00.2000, HTSUS, which provides for Textile hosepiping and similar textile tubing, with or without lining, armor or accessories of other materials: other. The general rate of duty is 3.3 % ad valorem.
The country of origin of this textile hosepiping is Canada for marking purposes.
This 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.
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.
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 [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division