CLA-2-63:OT:RR:NC:N3:351
Mr. Steve Pepi
Near North Customs Broker, Inc.
400 Essjay Road/Suite 200
Williamsville, NY 14221
RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA) of banner and flags from Canada, Article 509
Dear Mr. Pepi:
In your letter dated February 7, 2018 and your follow-up letter dated May 1, 2018, you requested a ruling on behalf of your client, The Look Company on the status of textile banners and a Canadian flag from Canada under the NAFTA. Samples of fabrics, banners and a flag were examined and will be retained. FACTS: You submitted finished representative samples of four banners and a flag: You also submitted what you state are raw samples which are 12" x 12" square swatches of polyester warp knit fabrics for the banners and the flag.
The first sample, identified as Polywovin Hanging Banner, is a hanging banner constructed of a polyester warp knit fabric. The banner measures approximately 29" x 69 ", and has a hemmed top and bottom so that hardware can be inserted to allow the panel to hang.
The second sample, identified as Duraflag Canadian Flag, is the National flag of Canada. It is constructed of polyester warp knit fabric, and measures 24" x 46 ½". Metal grommets are placed on the left side of the flag for hanging.
The third sample, identified as Polywovin Banner with grommets, is a banner constructed of polyester warp knit fabric. The banner measures 12" x 88". Metal grommets are attached, at several intervals, along both of the long sides for hanging.
The fourth sample, identified as Stretch fitted panel with keder Silicone Edge Graphic (SEG), is a panel constructed of polyester warp knit fabric. The banner measures 24" x 29", and the edges of the panel are serged and incorporates KederTape®. KederTape® is a high-quality keder that is laminated with a premium pressure sensitive adhesive which allows the product to be “peel and stick” applied to textiles for SEG applications. This allows the panel to attach to the hardware frame so that one side will be viewed and the other side can be taped on to a wall or frame.
The fifth sample, identified as Luxx (backlit) panel with keder (SEG), is a panel that is constructed of polyester warp knit fabric. The banner measures 20 ½" x 34 1/2", and the edges of the panel are serged and incorporates KederTape®. The panel is printed with wording, and when placed on a frame with lighting capability, the words will be illuminated from behind. It is printed so that one side will be viewed and the other side can be taped to an illuminated frame.
CLASSIFICATION:
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.
All the items are considered to be “made up” as that term is defined in Note 7(b) to Section XI, Harmonized Tariff Schedule of the United States (HTSUS). The banners and flag will have a specific front side, with the reverse meant to hang against a wall or in a way that only one side will be viewed.
Heading 6307, provides for other made up articles, including flags, pennants and banners. The Explanatory Notes, (ENs), states that, “The heading covers made up articles of any textile material which are not included more specifically in other headings of Section XI or elsewhere in the Nomenclature. It includes, in particular: (4) Flags, pennants and banners, including bunting for entertainments, galas or other purposes.”
The applicable tariff provision for all of the banners will be 6307.90.8500, HTSUS, which provides for other made up articles…Other: Wall banners, of man-made fibers. The rate of duty will be 5.8 percent ad valorem.
The applicable tariff provisions for the flag will be 6307.90.9835, HTSUS, which provides for other made up articles…National flags: Of other nations. The rate of duty will be 7 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. NAFTA - LAW AND ANALYSIS: You state that the manufacturing operations for all the products are as follows: For Polywovin Hanging Banner, Duraflag Canadian Flag, Polywovin Banner, Stretch fitted panel with keder (SEG) and Luxx (backlit) panel with keder (SEG): The polyester filament yarns are extruded in Korea. The yarns are knitted into a warp knit fabric in Germany.
Production of the banners and flags takes place at a facility located in Ontario, Canada. The fabrics are directly printed via dye sublimation process using sensient heat activated ink. The printed fabrics are then run through a heat setting machine for the ink to bond to the fabric. The fabrics are then rolled out on a cutting table to be measured and cut to the client’s specifications. After the finishing process, the fabrics are sewn, hemmed, grommets and sleeves are added and the fabrics are attached to the hardware frames which is also geared to customer specifications. The finished graphic banners and flags are rolled and packaged in a custom box for shipment.
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; or (iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because-- (A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or (B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts, provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note. For goods classified in heading 6307, General Note 12/63.4 requires: A change to headings 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties. Chapter 63: Chapter rule 1: For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. The component that determines the classification of the goods for the banners is the polyester warp knit fabric classified under heading 6005, HTSUS and for Luxx (backlit) panel with keder (SEG), the polyester warp knit fabric classified in heading 5903. Although you stated that the polyester coated warp knit fabric is classified in heading 5903, HTSUS; it is the opinion of this office, that the coating on the fabric is not visible to the “naked eye” and therefore would be classified under heading 6005, HTSUS. All fabrics are said to be formed in Germany, imported on rolls into Canada, where the fabrics are cut and assembled into the finished product. Based on the facts provided, Polywovin Hanging Banner, Duraflag Canadian Flag, Polywovin Banner, Stretch fitted panel with keder (SEG) and Luxx (backlit) panel with keder (SEG) described above do not qualify for NAFTA preferential treatment, because they do not meet the requirements of HTSUS General Note 12(t) 63.4.
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:
6307.90 The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
The polyester warp knit fabrics used to make the banners and flag was formed in Germany. The banners and flag do not meet the terms of the tariff shift requirement of 19 C.F.R. 102.21. The country of origin is conferred in Germany.
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 Adleasia Lonesome via email at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division