CLA-2-63:OT:RR:NC:N3:351
Mr. Juan De La Cruz
Daniel B. Hastings Inc.
13378 Port Drive
Laredo, TX 78045
RE: The tariff classification and eligibility under the United States-Mexico-Canada Agreement (USMCA) of a blanket from Mexico.
Dear Mr. De La Cruz:
In your letter dated December 3, 2021, you requested a ruling on behalf of your client, Pendelton Woolen Mills, on the tariff classification and status under the United States-Mexico-Canada Agreement (USMCA) of a blanket. A sample of Item XR334 was provided with your request and will be retained for training purposes. You state Item XR334 is identical to Item XR334_PREPRO, for which the ruling is being requested, in all respects except the country of manufacture. Item XR334 is produced in the United States. Item XR334_PREPRO will be produced in Mexico.
Item XR334_PREPRO, described as a “Roll-Up Blanket,” is designed and intended to be used outdoors to sit or lay on while camping, stargazing, or picnicking. The blanket is comprised of two layers. The face side is a yarn dyed dobby weave composed of 100 percent wool fabric. The blanket is backed with 100 percent nylon filament woven fabric treated on the front with a durable water repellent (DWR) finish and coated on the back with polyurethane which you state renders the fabric water resistant. The blanket is bound along the edges with a narrow woven fabric. The blanket is designed to be rolled up for transport and storage. It features a leather handle, adjustable webbed straps, two plastic buckle clasps and a 2 x 3 inch leather patch imprinted with the brand name, “Pendleton.” The rectangular shaped blanket measures 60 inches in length by 70 inches in width. The blanket will be shipped to the United States from Mexico.
The manufacturing operations for the roll-up blanket is as follows: The United States
100 percent nylon thread is produced.
100 percent nylon narrow woven fabric is formed.
Taiwan
100 percent nylon filament fabric is formed.
China
100 percent nylon woven webbing is formed.
Leather handle and plastic buckles are produced.
Mexico
100 percent wool woven fabric is formed.
Cutting and sewing of the blanket.
The blanket is shipped to the United States.
ISSUES: What is the tariff classification and USMCA eligibility of the subject merchandise?
CLASSIFICATION:
You suggested that the roll-up blanket should be classified under heading 6301.40.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Blankets and traveling rugs: Blankets (other than electric blankets) and traveling rugs, of synthetic fibers, Woven.” We disagree. Blankets provided for under heading 6301, HTSUS, generally have a thick heavy-texture and are intended to provide protection against the cold. This blanket is not intended to be used to provide warmth but to sit upon while engaging in outdoor activities.
The applicable subheading for the roll-up blanket will be 6307.90.9891, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Other: Other: Other: Other.” The duty rate 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 the World Wide Web at https://hts.usitc.gov/current.
USMCA Eligibility:
The United States-Mexico-Canada Agreement (“USMCA”) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (GN) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a "good originating in the territory of a USMCA country" only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or
…
Since the blanket contains non-originating fabric from Taiwan, it is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) nor is it produced exclusively from originating materials under GN 11(b)(ii). Therefore, we must next determine whether the roll-up blanket qualifies under GN 11(b)(iii). The applicable provisions under subdivision (o) include two Chapter Rules under Chapter 63 and the rule of origin which are as follows:
Chapter Rule 1: For the 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.
Chapter Rule 2: Effective January 1, 2022, and not withstanding chapter rule 1 of this chapter, for the purposes of determining the origin of a good of this chapter, a good of this chapter containing fabrics of heading 5903 shall be considered originating only if all fabrics used in the production of the fabrics of heading 5903 are formed and finished in the territory of one or more of the USMCA countries. This note shall not apply to goods of heading 6305, goods of subheadings 6306.12 or 6306.22 or goods of subheading 6307.90 that are not surgical drapes or national flags.
…
5. A change to headings 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5310 through 5311, chapters 54 through 55 or headings 5801 through 5802 or 6001 through 6006, or other made-up textile articles of heading 9619, 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 USMCA countries.
In the instant case, the blanket is classified by application of General Rule of Interpretation (GRI) 1 under heading 6307, HTSUS. Therefore, there is no need to employ an essential character analysis to classify this blanket as provided for under Chapter rule 1. Accordingly, Chapter rule 1 does not apply in this case to restrict the application of the tariff shift rule to a specific component in the subject blanket, but it does serve to eliminate from consideration those components not considered in classifying the blanket such as the thread, narrow woven fabric, leather handle, webbed straps, and plastic buckles. See, e.g., HQ H043056 (May 5, 2009). Thus, the tariff shift rule applies to the two fabrics used to form the body of the blanket.
In your request, you indicate that the nonoriginating nylon filament fabric is classified under subheading 5903.20.2500, HTSUS, at time of importation. Heading 5903, HTSUS, provides for the classification of “[t]extile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902.” According to Note 2(a)(1) to Chapter 59, in order for a fabric to be considered coated within the meaning of heading 5903, HTSUS, the coating must be visible to the naked eye (whatever the nature of the plastic material), but no account is to be taken of changes in color. Therefore, in order to determine whether the blanket makes the tariff shift under subsection (o), HTSUS, we must determine whether it is made up of textile fabric that is visibly coated with plastic. See Headquarters Ruling Letter (“HQ”) H303112 (Nov. 7, 2019); HQ 967884 (Oct. 26, 2005); and HQ 087852 (Nov. 27, 1990).
Applying the “visible to the naked eye” test on the nylon fabric of the blanket at issue, using normally corrected vision in a well-lighted room, no coating was visibly distinguishable from the fabric without the use of magnification. A plastics layer was not visible to the naked eye in the cross-section of the fabric. Thus, the nylon fabric is not classified in heading 5903, HTSUS, but rather heading 5407, HTSUS. As all headings of Chapter 54 are exceptions to the tariff shift rule, the fabric does not undergo the applicable change in tariff classification specified in GN 11(o)/63.5. Therefore, the “Roll-Up Blanket” does not qualify for preferential tariff treatment under the USMCA.
HOLDING:
The applicable subheading for the roll-up blanket is 6307.90.9891, HTSUS, dutiable at 7 percent ad valorem. Based on the information and sample provided, the roll-up blanket is not eligible for preferential tariff treatment under the USMCA.
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.
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 Kristine Dodge at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division