CLA 2-OT:RR:NC:N3:350
Mr. John Peterson
Neville Peterson LLP
One Exchange Plaza
55 Broadway, Suite 2602
New York, NY 10006
RE: The tariff classification and country of origin of a coated nonwoven fabric from Vietnam; 19 CFR 102.21(c)(5); 19 CFR 134
Dear Mr. Peterson:
In your letter dated May 27, 2019, you requested a tariff classification and country of origin ruling. This office will retain the samples accompanied by your letter.
FACTS:
The subject merchandise is referred to as coated “Clarino” fabric. Three samples, one representing each stage of production of the composite material have been received by this office. Subsequently, the samples have been sent to the Customs and Border Protection (“CBP”) laboratory for analysis.
The material comprises three layers: a middle layer, of nonwoven textile substrate, which has been coated with a plastic on one surface and bonded with a knit fabric on the opposite surface. The key features of the Clarino material are present in the nonwoven. The “collagen” method used to produce the nonwoven allows it to simulate the look and feel of leather. The plastic coating acts to impart a sheen to the nonwoven and serves to repel moisture and dirt. The knit bottom layer lends to resist distortion and stretching of coated nonwoven.
In your letter, you state the first step in production involves producing a nonwoven fabric of man-made staple fibers, which will be formed in China. The nonwoven fabric is sent to Vietnam where it is coated with plastic. After the nonwoven fabric is coated on one side with plastic, it is then bonded to a layer of knit fabric, which will be formed in Vietnam. The finished product will then be imported into the United States.
CBP laboratory analysis indicates the sample, in its finished state, is constructed of a nonwoven fabric, coated or covered with a cellular polyvinyl acetate type plastic material on one surface and a weft knit fabric bonded to the other surface of the nonwoven fabric. The nonwoven fabric is composed of staple nylon fibers with chemical bonding and has been needlepunched. The fabric does not contain leather or leather particles and is not impregnated, coated or covered with material other than or in addition to rubber, plastics, wood pulp or glass fibers. The weft knit fabric is composed of 62.2 percent acrylic and 37.8 percent glass fibers. There is no surface treatment to the knit fabric.
The weight of the finished product is 549 g/m2. The weight of the plastic coated nonwoven fabric is 374.9 g/m2. Lastly, the weight of the knit fabric is 174.1 g/m2.
ISSUES:
What are the tariff classification and country of origin of the subject merchandise?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The component material at issue is a coated nonwoven fabric that has been bonded to a knit fabric. GRI 3 governs the classification of such component materials. GRI 3(a) requires that classification be according to the most specific description shall be preferred to headings providing a more general description. Otherwise, the components or materials of the combined product are regarded as equally specific. It is the opinion of this office that neither the heading for the coated nonwoven fabric nor the heading for the knit fabric provides a more specific description than the other.
GRI 3(b) requires that composite goods consisting of different materials which cannot be classified by reference to GRI 3(a), shall be classified as if they consisted of the material or component which gives them their essential character. It is the opinion of this office that the essential character of the component material is the plastic coated nonwoven face fabric.
Chapter 56 Note 3 states in pertinent part:
Headings 5602 and 5603 cover respectively felt and nonwovens, impregnated, coated, covered or laminated with plastics or rubber whatever the nature of these materials (compact or cellular).
CLASSIFICATION:
Although your office has stated that the Clarino fabric will be imported using 5603.14.30, HTSUS, which provides for nonwoven of man-made filament fibers, the CBP laboratory has found the nonwoven fabric is composed of man-made staple fibers. Therefore, 5603.14.30 is not applicable.
The applicable subheading for the Clarino fabric will be 5603.94.3000, HTSUS, which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated: Other: Weighing more than 150 g/m2: Other: Laminated fabric. The rate of duty will be Free.
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 the World Wide Web at https://hts.usitc.gov/current.
COUNTRY OF ORIGIN:
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:
5602-5603… (1) Except for fabric of wool or of final animal hair, a change from greige fabric of heading 5602 through 5603 to finished fabric of heading 5602 through 5603 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 5602 through 5603 from any other heading, including a heading within that group, except from heading 5007, 511 l through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5803, 5806, 5808, and 6002 through 6006, and provided that the change is the result of a fabric-making process.
Subject to (1) above, the greige nonwoven fabric, which is shipped to Vietnam is not dyed and printed. Subject to (2) above, the nonwoven Chinese fabric which is shipped to Vietnam undergoes additional processing ultimately resulting in a finished product of heading 5603, which is not the result of a fabric-making process. The terms of the either tariff shift, are not satisfied.
Paragraph (c)(3) in pertinent part states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1) or (2) of this section:
(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit;
(ii) Except for fabrics of chapter 59 and goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.”
Subject to (i) above, the material is not knit to shape. Subject to (ii) above, in order for a good to be considered wholly assembled the components must have preexisted in essentially the same condition as found in the finished good prior to their assembly and were combined to form the finished good in a single country, territory, or insular possession. Any additional work which would appreciably affect the good would disqualify it as being considered “wholly assembled.” It is the opinion of this office that when the nonwoven component undergoes the process of coating with a plastic in Vietnam the component no longer preexists “in essentially the same condition as found in the finished good prior to their assembly.”
Paragraph (c)(4) in pertinent part states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred.”
Subject to paragraph (c)(4) above, CBP has generally held that the most important assembly or manufacturing process, as it pertains to textiles, is the fabric-making process. In the instant case of the Clarino fabric the nonwoven fabric is manufactured in China and the knit backing fabric is manufactured in Vietnam. Since the fabrics which comprise the Clarino fabric are manufactured in multiple countries, and no one fabric can be deemed more important than the other (i.e., the nonwoven fabric provides a characteristic structure and the knit backing fabric provides stability and durability), the country of origin cannot be readily determined based on the fabric-making process.
Paragraph (c)(5) in pertinent part states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory, or insular possession in which an important assembly or manufacturing process occurred.
It is the opinion of this office that the last country in which an important assembly or manufacturing operation occurs is Vietnam. Several processes which are integral to the formation of the end product occur in Vietnam. This includes the formation of the knit fabric, the coating of the nonwoven Clarino fabric and the bonding of the two components together. The fabric is then imported into the United States.
HOLDING:
The country of origin of the Clarino fabric is Vietnam.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), 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 in accordance with 19 CFR 177.2.
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 Michael Capanna at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division