CLA 2-OT:RR:NC:N3:349
Mr. Ameet Shah
Culp Inc.
7209 Hwy. 158 East
Stokesdale, NC 27357
RE: Country of origin determination and status under Caribbean Basin Economic Recovery Act (CBERA), Caribbean Basin Trade Partnership Act (CBTPA) and General System of Preferences (GSP) for mattress protectors and a foundation cover; 19 CFR 102.21(c)(2); 19 CFR 102.21(c)(4)
Dear Mr. Shah:
This is in reply to your letter dated July 13, 2020, requesting a country of origin determination and status under Caribbean Basin Economic Recovery Act (CBERA), Caribbean Basin Trade Partnership Act (CBTPA) and General System of Preferences (GSP) for mattress protectors that were the subject of classification ruling NY N296627 and a foundation cover that was the subject of classification ruling HQ H273340 that will be imported into the United States.
FACTS:
Item 1, “KnitPlainWhite,” is a queen sized zipperless mattress protector. The body of the cover is made from 100 percent polyester knit fabric laminated to a thin layer of polyurethane on the underside. Sewn onto the body of the protector is a skirt made from 100 percent polyester knit fabric. The fully elasticized skirt features an 18-inch drop and keeps the cover in place on the mattress.
Item 2, “KnitCK5957,” is a zipperless mattress protector. The body of the cover is made from 81 percent cotton and 19 percent polyester knit terry fabric laminated to a thin layer of polyurethane on the underside. You state that it will contain a fully elasticized skirt. The skirt is stated to be made from 100 percent polyester knit fabric.
Item 3, “KnitCK6080,” is a zipperless mattress protector. The body of the cover is made from 70 percent polyester and 30 percent tencel knit fabric laminated to a thin layer of polyurethane on the underside. The construction of this fabric features two knitted faces, held together by yarns traveling back and forth between the two faces creating designs on both surfaces, and separated by textured stuffing yarns which have been inserted between the two outer layers during the knitting process, providing the fabric with extra bulk and cushioning, and imparting a quilted effect on the top surface. You state that it will contain a fully elasticized skirt. The skirt is stated to be made from 100 percent polyester knit fabric.
Item 4 is a textile foundation cover. It is made in several sizes, (e.g., single, double, queen, or king). It is comprised of a top panel of 76 percent polyester and 24 percent acrylic nonwoven fabric and side and bottom panels of 100 percent polyester warp knit, velvet, printed, punched fabric. It is specially cut and sewn so that post-importation, it can be fitted onto and attached with staples to a frame constructed of wood, heavy-gauge steel wire and slotted steel corner pieces. The wooden frame does not contain springs or wire mesh. The frame provides reinforcement and rigidity for a mattress of equivalent size (e.g., single, double, queen, or king) which is placed directly on top of the foundation when it is in use. Although the wooden frame could sit directly on the ground or floor when it is in use, it lacks legs or other features to protect the flooring beneath it.
New York (NY) Ruling N296627 provided the classification for the mattress protectors: Item 1, 6302.10.0020, Harmonized Tariff Schedule of the United States (HTSUS); Item 2, 6302.10.0015, HTSUS; and Item 3, 9404.90.9522, HTSUS. The classification for the textile foundation cover was previously determined to be 6307.90.9889, HTSUS. See Headquarters (HQ) Ruling H273340. It is noted that due to a tariff revision, the current classification is 6307.90.9891. It is also noted that NY Ruling N283549 addressed the status of the foundation cover, Item 4, under the Caribbean Basin Trade Partnership Act (CBTPA) from Haiti and under the General System of Preferences (GSP) from Turkey; however, you have indicated this item is included in the ruling request due to production changes.
The manufacturing operations for the mattress protectors will be follows:
The top panel fabrics are formed in China.
The side panel (elasticized skirt) fabrics are formed in either Turkey or the United States.
The mattress protectors are cut and sewn in Haiti.
The manufacturing operations for the foundation cover will be follows:
The knit fabric (side and bottom panels - 6001 or 6006) is formed in China or Turkey.
The nonwoven fabric (top panel - 5603) is formed in either China or the United States.
Sewing threads, labels and zippers are made in the United States.
The foundation cover is cut and sewn in Haiti.
ISSUE:
What are the countries of origin for the subject merchandise?
What is the status of the merchandise under the Caribbean Basin Economic Recovery Act (CBERA), Caribbean Basin Trade Partnership Act (CBTPA) and General System of Preferences (GSP)?
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 Tariff shift and/or other requirements
6301 – 6306 Except for goods of heading 6302 through 6304 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under heading 6301 through 6306 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
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.
9404.90 Except for goods of subheading 9404.90 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
Subheading 6302.10 is not provided for under paragraph (e)(2) and, therefore, paragraph (e)(2) does not apply to items 1 and 2. As the fabric used to manufacturer items 1 and 2 are formed in more than one country, Section 102.21(c)(2) is inapplicable. When item 4 is constructed from fabrics formed in more than one country, Section 102.21(c)(2) is inapplicable. However, if both the knit and nonwoven fabrics are formed in China, the country of origin is China.
Section 102.21(e)(2) does apply to heading 9404.90 manufactured from fabrics of 100 percent manmade fibers. Section 102.21(e)(2) states, in pertinent part,
The country of origin of the good is the country, territory, or insular possession in which the fabric comprising the good was both dyed and printed when accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing.
If the country of origin cannot be determined under paragraph (e)(2)(i) of this section, except for goods of HTSUS subheading 6117.10 that are knit to shape or consist of two or more component parts, the country of origin is the country, territory, or insular possession in which the fabric comprising the good was formed by the fabric-making process;
The fabric for item 3 is neither dyed nor printed. Therefore, paragraph (e)(2)(i) is inapplicable. As the foundation cover is constructed from fabric formed in two countries, paragraph (e)(2)(ii) is also inapplicable; therefore, Section 102.21(c)(2) is inapplicable.
Section 102.21(c)(3) 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; or
(ii) Except for 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.
As the subject merchandise is not knit to shape and is excepted from paragraph (ii), Section 102.21 (c)(3) is inapplicable.
Section 102.21 (c)(4) 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.” Accordingly, as the mattress protectors and the foundation cover are all assembled in a single country, that is, Haiti, the country of origin of the mattress protectors is conferred in Haiti. The origin of the foundation cover when of fabrics from more than one country is also conferred in Haiti.
GSP – LAW AND ANALYSIS:
As stated in General Note 4(b)(i), HTSUS, Haiti is a designated least-developed beneficiary developing country (BDC) for purposes of the GSP. To determine whether an article will be eligible to receive duty-free treatment under the GSP, it must first be classified under a tariff provision for which a rate of duty of "Free" appears in the "Special" subcolumn followed by the
symbol "A" or "A*." We find that the mattress protectors are not classifiable under GSP-eligible provisions. Items 1 and 2 are classifiable under subheading 6302.10.00, HTSUS, which provides for “bed linen, knitted or crocheted” and Item 3 is classifiable under subheading 9404.90.95, HTSUS, which provides for “articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: Other: Other: Other: Other.” Therefore, because the mattress protectors are not classified in a GSP-eligible provision, they may not receive duty-free treatment when imported into the U.S.
Item 4 was classified under subheading 6307.90.98, HTSUS, under HQ H273340. Articles classifiable under subheading 6307.90.98, HTSUS, which are products of Haiti are currently entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations.
Under the GSP, eligible articles the growth, product or manufacture of a designated beneficiary developing country ("BDC") which are imported directly into the customs territory of the U.S. from a BDC may receive duty-free treatment if the sum of (1) the cost or value of materials produced in the BDC, plus (2) the direct costs of the processing operations performed in the BDC, is equivalent to at least 35 percent of the appraised value of the article at the time of entry into the U.S. under 19 U.S.C. § 2463(a)(2)(A). No article or material of a beneficiary developing country shall be eligible for such treatment by virtue of having merely undergone simple combining or packing operations, or mere dilution with water or mere dilution with another substance that does not materially alter the characteristics of the article.
You stated that the direct cost of processing is currently unavailable. As a result, we are unable to issue a ruling concerning the eligibility of Item 4, the foundation cover, under the GSP. Providing that the foundation cover meets all of the requirements, it would be eligible for duty free treatment. However, without more information about the processing operation in the GSP country, we cannot issue a definitive ruling to that effect.
The GSP, however, is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check our Web site at www.cbp.gov and search for the term "GSP".
CBERA – LAW AND ANALYSIS:
As stated in General Note 7(a), HTSUS, Haiti is a designated beneficiary country for the purposes of the CBERA. To determine whether an article will be eligible to receive duty-free treatment under the CBERA, it must first be classified under a tariff provision for which a rate of duty of "Free" appears in the "Special" subcolumn followed by the symbol "E" or "E*." We find that the mattress protectors under subheadings, 6302.10.00, HTSUS, and 9404.90.95, HTSUS, are followed by the “E*” and the mattress foundation cover, subheading 6307.90.98, HTSUS, is followed by the “E.”
Under General Note 7(d)(iii) textile articles of either cotton or manmade fibers included in a subheading followed by an “E*” are excluded from duty free treatment. As a result, the mattress protectors (Items 1, 2 and 3) are not eligible for duty free treatment.
Item 4 was classified under subheading 6307.90.98, HTSUS, under HQ H273340. Articles classifiable under subheading 6307.90.98, HTSUS, which are products of Haiti are currently entitled to duty free treatment under the CBERA upon compliance with all applicable regulations.
Under the CBERA, eligible articles the growth, product or manufacture of a designated beneficiary country which are imported directly into the customs territory of the U.S. from a beneficiary country may receive duty-free treatment if the sum of (1) the cost or value of materials produced in the beneficiary country or two or more beneficiary countries, plus (2) the direct costs of the processing operations performed in the beneficiary country or countries is not less than 35 percent of the appraised value of the article at the time of entry into the U.S. 19 U.S.C. § 2702. No article or material of a beneficiary developing country shall be eligible for such treatment by virtue of having merely undergone simple combining or packing operations, or mere dilution with water or mere dilution with another substance that does not materially alter the characteristics of the article.
As you stated that the direct cost of processing is currently unavailable, we are unable to issue a ruling concerning the eligibility of Item 4, the foundation cover, under the CBERA. Providing that the foundation cover meets all of the requirements, it would be eligible for duty free treatment. However, without more information about the processing operations in the CBERA country, we cannot issue a definitive ruling to that effect.
CBTPA – LAW AND ANALYSIS:
The CBTPA provides certain specified trade benefits for countries of the Caribbean region. The Act provides for duty free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA that allow the United States to
verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA.
The provisions implementing the textile provisions of the CBTPA in the HTSUS are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §10.221 through 10.228 of the CBP Regulations (19 CFR 10.221 through 10.228). Specifically, 19 CFR 10.223 provides the articles eligible for preferential treatment. These articles include apparel articles classified under chapters 61 and 62, headings 6501, 6502, 6503, 6504 and subheadings 6406.99 and 6505.90, HTSUS; textile luggage; and hand-loomed, handmade, or folklore articles. As the mattress protectors and foundation cover do not fall into any of these chapters, headings, subheadings or categories, they are not entitled preferential treatment under the CBTPA.
HOLDING:
The country of origin of the mattress protectors is Haiti. When the foundation cover is made from fabrics wholly manufactured in China, the country of origin is China. When the foundation cover is manufactured from fabrics from two countries, the country of origin is Haiti. The mattress protectors are ineligible for preferential treatment under the GSP, CBERA and CBTPA. The foundation cover is ineligible for preferential treatment under the CBTPA. We are unable to rule as to the eligibility of the foundation cover for the GSP and CBERA without additional information.
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 177.9(b)(1). This section states that a 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 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 Kim Wachtel at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division