OT:RR:NC:N3:350
Mr. Ameet Shah
Culp Inc.
1823 Eastchester Dr.
Highpoint, North Carolina 27265
RE: The classification and country of origin determination of two coated fabrics; 19 CFR 102.21(c)(4)
Dear Mr. Shah:
In your letter dated June 5th, 2023, you requested a tariff classification and country of origin ruling. Samples were submitted to our office accompanying your request and will be retained for training purposes.
The subject merchandise is referred to as styles DN-6 NTC and IE-7 NPL. DN-6 NTC is a woven fabric composed of a polyester/cotton fiber blend in which the polyester predominates by weight. IE-7 NPL is a knit fabric composed wholly of polyester fibers. The samples are not over 70 percent by weight of plastic. Both samples have been coated, covered, impregnated, and/or laminated on one surface with polyurethane.
DN-6 NTC will be the subject of two origin scenarios while IE-7 NPL will be the subject of one.
The manufacturing processes of DN-6 NTC will be as follows:
Scenario 1: The fabric will be woven and napped in China. A cellular polyurethane coating will be applied in China. The fabric is then exported to Vietnam where a layer of “dry” polyurethane (lamination layer) is applied over the cellular coating. The fabric is tumbled and exported from Vietnam to the United States, or;
Scenario 2: The fabric will be woven and napped in Vietnam. A cellular polyurethane coating will be applied in Vietnam. The fabric is then exported to China where a layer of “dry” (lamination layer) of polyurethane will be applied over the cellular coating. The fabric is then exported from Vietnam to the United States.
The manufacturing process of IE-7 NPL will be as follows:
The fabric is knitted and napped in China. The fabric is then exported to Vietnam, where a layer of “dry” polyurethane (lamination layer) is applied. The fabric is then printed and tumbled before it is exported from Vietnam to the United States.
DN-6 NTC and IE-7 NPL are laminated fabrics according to the terms of Note 3 to Chapter 59 which states:
For the purposes of heading 5903, “textile fabrics laminated with plastics” means products made by the assembly of one or more layers of fabrics with one or more sheets or film of plastics which are combined by any process that bonds the layers together, whether or not the sheets or film of plastics are visible to the naked eye in the cross-section.
ISSUES:
What is the classification and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for styles DN-6 NTC and IE-7 NPL will be 5903.20.2500, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: With polyurethane: Of man-made fibers: Other: Other.” The rate of duty will be 7.5 percent ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 5903.20.2500, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 5903.20.2500, HTSUS, listed above.
COUNTRY OF ORIGIN:
Section 334 of the Uruguay Round Agreements Act (“URAA”) (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:
5901-5903…
(1) Except for fabric of wool or of fine animal hair, a change from greige fabric of heading 5901 through 5903 to finished fabric of heading 5901 through 5903 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 5901 through 5903 from any other heading, including a heading within that group, except from heading 5007, 5111 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.
In this case, (1) above is inapplicable to DN-6 NTC, in all scenarios, because it does not go through a process of both dyeing and printing while being accompanied by two or more of the other allowable finishing operations. Regarding IE-7 NPL, (1) above is inapplicable as there is no change to heading 5903 from headings 5901 through 5903.
Further, (2) above is inapplicable to DN-6 NTC, in all scenarios, because the fabric is exported from the country of formation as a fabric of heading 5903 and as a result of operations in the subsequent country, no tariff shift occurs before exportation to the United States. Regarding IE-7 NPL, and (2) above, the fabric is exported from China as a knitted fabric of Chapter 60. In Vietnam, further operations transform the fabric into one of heading 5903; however, that change is not the result of a fabric-making process.
Therefore for fabrics DN-6 NTC and IE-7 NPL, paragraph (c)(2) to Section 102.21 is inapplicable.
The "country of origin" is defined in 19 CFR 134.1(b) as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part."
Paragraph (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 fabrics of chapter 59 and goods of headings 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6307.10, 6307.90, 9404.90, and 9619.00.31–33 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.”
In this case, (i) above is inapplicable to both fabrics in all scenarios as the goods are not knit to shape.
Further, (ii) above is inapplicable to both fabrics in all scenarios as the goods are not wholly assembled in a single country, territory, or insular possession. Chapter 59 fabrics are also excepted from this category.
Therefore for fabrics DN-6 NTC and IE-7 NPL, paragraph (c)(3) to Section 102.21 is inapplicable.
Paragraph (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.”
Subject to paragraph (c)(4) above, Customs and Border Protection has generally held that the most important assembly or manufacturing process, as it pertains to textiles, is the fabric-making process.
Section 102.21(b)(2) defines the “fabric-making process” as:
…any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarns, twine, cordage, rope or fabric strips and results in a textile fabric.
Subject to paragraph (c)(4) above, the fabric-making process occurs in China for DN-6 NTC in scenario 1. For DN-6 NTC the fabric making process occurs in Vietnam in scenario 2. For IE-7 NPL, the fabric making process occurs in China.
HOLDING:
For DN-6 NTC in scenario 1, and for IE-7 NPL the country of origin will be China. For DN-6 NTC in scenario 2, the country of origin will be 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.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Michael Capanna at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division