CLA-2-54:OT:RR:NC:N3:352
Linda M. Rasco
Metro Customs Brokers Inc.
1 Lincoln Blvd., Suite 202
Rouses Point, NY 12979
RE: The tariff classification, country of origin, transshipment and status under the United States-Korea Free Trade Agreement (UKFTA) of five woven fabrics from Korea
Dear Ms. Rasco:
In your letter dated October 31, 2017, on behalf of your client Blinds to Go (US), Inc., you requested a ruling for the tariff classification and status under the United States-Korea Free Trade Agreement (UKFTA) for five styles of woven fabrics to be used in the manufacture of window furnishings. Five styles were submitted, and all were sent for laboratory analysis.
FACTS:
Blinds to Go (US), Inc. Styles “Cascade Sun Shut Wide,” “Cascade Wood Look Elegance Wide,” “Cascade Lumen,” “Cascade Linen,” and “Serenity Crystal 3D Multiple,” will be used to manufacture window blinds in the United States. According to the information provided and visual examination, none of styles in your request are assembled by sewing, gumming, or otherwise. The fabrics are not hemmed, do not have rolled edges or contain any holes. Further, the fabrics are not made-up and will be imported on rolls in widths of 96 to 100 inches.
Style “Cascade Sun Shut Wide” is a woven fabric characterized by alternating horizontal areas of solid and opaque woven panels across the fabric. U.S. Customs and Border Protection (CBP) Laboratory analysis indicates that “Cascade Sun Shut Wide” is composed wholly of non-textured polyester filament yarns of different colors with little or no twist. The fabric is of dobby weave construction and weighs 172.5 g/m2.
Style “Cascade Wood Look Elegance Wide” is a woven fabric characterized by alternating areas of solid and opaque woven panels across the fabric. CBP Laboratory analysis indicates that “Cascade Wood Look Elegance Wide” is a bleached woven fabric composed wholly of polyester yarns. The fabric is other than plain, twill, satin or jacquard weave construction. The fabric is constructed of non-textured monofilament polyester (17.7 percent by weight) and textured multifilament polyester (82.3 percent by weight). This fabric weighs 76.8 g/m2.
Style “Cascade Lumen” is a woven fabric characterized by alternating solid woven panels and sheer open-work panels across the fabric. CBP Laboratory analysis indicates that “Cascade Lumen” is other than plain, twill, satin or jacquard weave construction. The fabric is composed wholly of polyester filament yarns, of which 79.5 percent is textured and 20.5 percent is non-textured. The fabric has been bleached and weighs 61.5 g/m2.
Style “Cascade Linen” is a woven fabric characterized by alternating horizontal areas of solid and open-work panels across the fabric. CBP Laboratory analysis indicates that “Cascade Linen” is other than plain, twill, satin or jacquard weave construction. The fabric is composed of non-textured polyester filament (59.7 percent), polyester staple fiber (34.6 percent), and linen (5.7 percent). The fabric is unbleached and weighs 105 g/m2.
Style “Serenity Crystal 3D Multiple” is a woven fabric characterized by alternating areas of solid woven panels and sheer open-work panels across the fabric, “woven so as to form horizontal fabric vanes between the two layers of sheer fabric revealing a diffused view when open and full privacy when closed.” CBP Laboratory analysis indicates that “Serenity Crystal 3D Multiple” is other than plain, twill, satin or jacquard weave construction. The fabric is composed wholly of polyester filament yarns, of which 53.6 percent is textured and 46.4 percent is non-textured. The fabric has been bleached and weighs 98 g/m2.
The manufacturing operations for all five styles are as follows:
The yarns are produced in Korea.
The yarns are dyed in Korea.
The fabric is woven in Korea.
The fabric is finished in Korea.
The fabric is exported to a Foreign Trade Zone in Taiwan for inspection.
The fabric is then shipped from Taiwan to the United States.
CLASSIFICATION:
In your letter you suggest classification for all five fabrics under 5407.53.2020 Harmonized Tariff Schedule of the United States (HTSUS), which provides for Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics, containing 85 percent or more by weight of textured polyester filaments: Of yarns of different colors. However, based on CBP Laboratory analysis that classification for the fabrics would not be accurate because none of the fabrics contain 85 percent or more by weight of textured polyester filaments.
The applicable subheading for “Cascade Sun Shut Wide” will be 5407.61.9955, HTSUS, which provides for Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics, containing 85 percent or more by weight of polyester filaments: Containing 85 percent or more by weight of non textured polyester filaments: Other: Other: Of yarns of different colors: Weighing more than 170 g/m2. The rate of duty will be 14.9 percent ad valorem.
The applicable subheading for “Cascade Wood Look Elegance Wide,” “Cascade Lumen” and “Serenity Crystal 3D Multiple” will be 5407.69.1010, HTSUS, which provides for Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics, containing 85 percent or more by weight of polyester filaments: Other: Unbleached or bleached: Weighing not more than 170 g/m2. The rate of duty will be 14.9 percent ad valorem.
The applicable subheading for “Cascade Linen” will be 5407.91.2090, HTSUS, which provides for Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics: Unbleached or bleached: Other: Other: Other. The rate of duty will be 14.9 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 https://hts.usitc.gov/current.
UKFTA ELIGIBILITY – LAW AND ANALYSIS:
General Note 33, HTSUS, sets forth the criteria for determining whether a good is originating under the UKFTA. General Note 33(b), HTSUS, (19 U.S.C. § 1202) states that:
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and
(o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if-
(i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both;
(ii) the good is produced entirely in the territory of Korea or of the United States or both, and -
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and
satisfies all other applicable requirements of this note and of applicable regulations; or
(iii) the good is produced entirely in the territory of Korea or the United States,
or both, exclusively from materials described in subdivisions (i) or (ii), above.
For the purposes of this note, the term “UKFTA country” refers only to Korea or to the United States.
For goods classified in heading 5407, General Note 33(o)/54.3 requires:
A change to heading 5407 from any other chapter, except from headings 5106 through 5110, 5205 through 5206, or 5509 through 5510.
According to General Note 33(c)(iii) Transit and transshipment. A good that has undergone production necessary to qualify as an originating good under this note shall not be considered to be an originating good if, subsequent to that production, the good—
(A) undergoes further production or any other operation outside the territory of Korea or of the United States, other than unloading, reloading or any other process necessary to preserve the good in good condition or to transport the good to the territory of Korea or of the United States, or
(B) does not remain under the control of customs authorities in the territory of a country other than Korea or the United States.
The ruling request states that both the yarns and the fabric are of Korean origin. The finished fabric is then exported to a Foreign Trade Zone (FTZ) in Taiwan for inspection. Based on the facts provided, the final operation of transshipping the merchandise to Taiwan for inspection is a process that violates the transit and transshipment provision under the UKFTA. Therefore, the fabric described above does not qualify for preferential treatment under the UKFTA, as it does not meet the requirements of HTSUS General Note 33(c)(iii), and the fabric will not be entitled to a free rate of duty under the UKFTA.
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."
Since the subject merchandise is said to have been woven in Korea from Korean materials (or yarns), paragraph (c)(1) of Section 102.21 is applicable; country of origin is conferred in Korea.
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 https://hts.usitc.gov/current.
Based on the facts provided, the merchandise does not qualify for preferential treatment under the United States-Korea Free Trade Agreement (UKFTA) because it violates the transit and transshipment provision under the UKFTA found in HTSUS General Note 33(c)(iii).
Pursuant to 19 CFR §102.21, the country of origin for marking purposes is Korea.
This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. In the event that the facts or merchandise are modified in any way, you should bring this to the attention of Customs and you should resubmit for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by Customs.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
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 Nicole Rosso via email at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division