CLA-2-63:OT:RR:NC:N3:349
Mr. Flavio Pessoa
Glen Raven Customs Fabrics, LLC
142 Glen Raven Road
Burlington, NC 27217
RE: The tariff classification, country of origin and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of curtain panels
Dear Mr. Pessoa:
In your letter dated July 21, 2022, you requested a ruling on the classification, country of origin and status under the DR-CAFTA of certain curtain panels. A sample and fabric swatches were submitted. The sample will be returned to you, as requested.
The swatch provided will be made into a curtain panel, Style CHEDP-1. The curtain is made from a 100 percent acrylic woven chenille face fabric with a 100 percent polyester woven lining. The face and lining fabrics are sewn together at the top and sides. Eight metal grommets from which the curtain will be hung are added along the top hem and metal weights for curtain stability are sewn into the bottom hem edges. A nonwoven fabric is inserted into the top hem for grommet stability.
The applicable tariff provision for the curtain panel will be 6303.92.2010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Curtains (including drapes) and interior blinds; curtain or bed valances: Other: Of synthetic fibers: Other: Window curtains (including drapes) and window valances.” The general rate of duty will be 11.3 percent ad valorem.
With respect to the origin and the eligibility of the curtain panel under DR-CAFTA, you have described the manufacturing process as follows:
Non-DR-CAFTA Country A:
Metal grommets and metal weights are manufactured.
100 percent polyester staple fiber woven lining fabric is formed and shipped to Guatemala.
Non-DR-CAFTA Country B:
Solution dyed acrylic fiber is extruded, cut and staple fibers are shipped to the United States.
United States:
Acrylic staple fibers are spun into 1- and 2-ply yarns.
Acrylic 1-ply yarns are twisted to form a chenille yarn.
Acrylic yarns are woven into a fabric consisting of 58.48 percent chenille yarns.
100 percent acrylic fabric is shipped to Guatemala.
Guatemala:
Polypropylene filament for the buckram is extruded.
Buckram nonwoven fabric is formed.
Polyester filament for the sewing thread is extruded.
Sewing thread of polyester filament is formed.
Fabrics are cut to size and shape.
Face and lining fabrics are sewn, other components added and attached (i.e., weights, grommets).
Finished curtain panel is packaged and shipped to the United States directly from Guatemala.
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 that “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.
Subheading 6303.92 is included in the paragraph (e)(2) exception to the above tariff shift rule; therefore, Section 102.21(e)(2) must be considered.
19 CFR 102.21(e)(2) states, in pertinent part, that:
(i) 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;
(ii) If the country of origin cannot be determined under paragraph (e)(2)(i) of this section...the country of origin is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process;
As the fabrics comprising the curtain panel are neither dyed nor printed, Section 102.21(e)(2)(i) is inapplicable. As the fabrics comprising the curtain panel are not formed in a single country, Section 102.21(e)(2)(ii) is also inapplicable. Therefore, we turn to 19 CFR 102.21(c)(3).
Section 102.21(c)(3) states that, “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 curtain panel is not knit to shape and heading 6303 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.” In the case of the subject merchandise, the most important manufacturing process occurs at the time of fabric making. Basing the country of origin determination on the fabric making process as opposed to the assembly process carries out the clear intent of Section 334 as expressed in Section 334 (b)(2) and Part 102.21(c)(3)(ii). The fabrics for the subject curtain panels are sourced in more than one country; the face fabric is made in the United States and the lining is made in a non-DR-CAFTA country. As no one fabric is more important than the other, a single country of origin determination cannot be made based on Section 102.21(c)(4).
Paragraph (c)(5) 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.” Accordingly, in the case of the subject curtain panel, the country of origin is conferred by the last country in which an important manufacturing assembly occurred, that is, Guatemala, where the fabric is cut and the curtain is assembled.
DR-CAFTA ELIGIBILITY
General Note 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that,
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if—
the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement;
(ii) the good was produced entirely in the territory of one or more of the parties to the Agreement, and—
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
(B) the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note;
and the good satisfies all other applicable requirements of this note; or
(iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials.
For subheading 6303.92.20, HTSUS, the appropriate subdivision (n) change in tariff classification rule requires:
A change to any other tariff item of heading 6303 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516, 5801 through 5802, or 6001 through 6006, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement.
In addition to satisfying the product-specific rule noted above, the DR-CAFTA chapter rules 1 (tariff classification component), 2 (sewing thread) and 3 (short supply sewing thread or yarn) of General Note (n), Chapter 63, must also be met. The applicable chapter rules state:
Chapter rule 1: For purposes of determining whether a good of this chapter is originating, 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: Notwithstanding chapter rule 1 to this chapter, a good of this chapter containing sewing thread of headings 5204, 5401, or 5508 or yarn of 5402 used as sewing thread, shall be considered originating only if such sewing thread or yarn is wholly formed in the territory of one or more of the parties to the Agreement.
Chapter rule 3: Notwithstanding chapter rule 2 to this chapter, a good of this chapter shall be considered originating regardless of the origin of the sewing thread or yarn of heading 5402 used as sewing thread described in chapter rule 2 to this chapter, provided the thread or yarn is listed in U.S. note 20 to subchapter XXII of chapter 98 and the good meets all other applicable requirements for preferential tariff treatment under this note.
The sewing thread is wholly formed in Guatemala, a party to the DR-CAFTA, and is, therefore, originating. The component that determines the classification of the curtain panel is the chenille face fabric (heading 5801) woven in the United States, a party to the DR-CAFTA Agreement, from yarns (headings 5509 and 5606) also produced in the United States from staple fibers (heading 5503) produced in a non-DR-CAFTA country. It is the chenille fabric that must make the tariff shift change set forth in the tariff shift rule, quoted above; however, the tariff shift rule does not allow a change from non-originating chenille fabric. Therefore, under General Note 29(m)(ii), the chenille fabric must originate in order for the curtain panel to quality for preferential treatment.
General Note 29(m)(ii) states,
Where a specific rule in subdivision (n) of this note is defined using the criterion of a change in tariff classification, and the rule is written to exclude tariff provisions at the level of a chapter, heading or subheading of the tariff schedule, such rule shall be construed to require that materials classified in those excluded provisions be originating for the good to qualify as originating.
The tariff shift rule under General Note 29(n) for heading 5801 requires,
A change to subheading 5801.10 through 5806.10 from any other chapter, except from headings 5111 through 5113, 5204 through 5212 or 5310 through 5311 or chapters 54 through 55.
When exported from the non-DR-CAFTA country the acrylic staple fibers are classified under heading 5503, HTSUS. Those fibers are transformed within the DR-CAFTA territories into yarns of heading 5509 and 5606, and then into fabric of heading 5801. The fabric does not meet the tariff shift rule for heading 5801 because the acrylic fibers of heading 5503 are formed in a non-DR-CAFTA country. Based on the facts provided, the chenille curtain panel does not qualify for DR-CAFTA preferential treatment, because it does not meet the requirements of HTSUS General Note 29(b)(ii)(A) and General Note 29(n), Chapter 63, Note 1.
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.
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 Kim Wachtel at [email protected]
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division