CLA-2-60:OT:RR:NC:N2:352
Flavio Pessoa
Glen Raven
142 Glen Raven Road
Burlington, NC 27217
RE: The tariff classification, country of origin, and eligibility of the United States-Mexico-Canada Agreement (USMCA) of two knit fabrics from Mexico.
Dear Mr. Pessoa:
In your letter dated June 12, 2024, you requested a binding ruling on the tariff classification and eligibility of two knit fabrics under the United States-Mexico-Canada Agreement (USMCA). Samples were provided to this office and sent for laboratory analysis.
FACTS:
The U.S. Customs and Border Protection Laboratory (CBP Laboratory) has determined that style “GG6019” is a weft double knit fabric that is composed wholly of man-made staple yarns. The fabric weighs 193.9 g/m2 and has been dyed a single uniform color. You state that the fabric is constructed of meta-aramid, modacrylic, para-aramid, and antistatic fibers. You indicate the fabric will be imported in widths of 60 ½ inches and will be used to create arc and flame resistant apparel.
The CBP Laboratory has determined that style “GG6020” is a weft double knit fabric that is composed wholly of man-made staple yarns. The fabric weighs 316.8 g/m2 and is made of yarns of different colors. You state that the fabric is constructed of meta-aramid, modacrylic, para-aramid, spandex, and antistatic fibers. You indicate the fabric will be imported in widths of 60 ½ inches and will be used to create arc and flame resistant apparel.
The manufacturing process for style GG6019 is as follows:
The meta-aramid fibers are produced in France.
The modacrylic fibers are produced in Turkey.
Both the meta-aramid fibers and the modacrylic fibers are then shipped to the United States.
The para-aramid fibers are produced in the United States.
The antistatic fibers are produced in the United States.
The meta-aramid, modacrylic, para-aramid, and antistatic fibers are spun into a single yarn in the United States.
The single yarn is then shipped to Mexico.
The single yarn is knitted into a fabric in Mexico.
The knitted fabric is then shipped to the United States.
The manufacturing process for style GG6020 is as follows:
The meta-aramid fibers are produced in France.
The modacrylic fibers are produced in Turkey.
Both the meta-aramid fibers and the modacrylic fibers are then shipped to the United States.
The para-aramid fibers are produced in the United States.
The antistatic fibers are produced in the United States.
The meta-aramid, modacrylic, para-aramid, and antistatic fibers are spun into a single yarn in the United States.
The spandex fiber is produced in the United States.
The single yarn and spandex fibers are then shipped to Mexico.
The single yarn and spandex fibers are knitted into a fabric in Mexico.
The knitted fabric is then shipped to the United States.
ISSUES:
What is the classification, country of origin, and USMCA eligibility for styles GG6019 and GG6020?
CLASSIFICATION:
The applicable subheading for style GG6019 will be 6006.32.0060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other knitted or crotched fabrics: Of synthetic fibers: Dyed: Of double knit or interlock construction: Other. The rate of duty will be 10% ad valorem.
The applicable subheading for style GG6020 will be 6006.33.0060, HTSUS, which provides for Other knitted or crotched fabrics: Of synthetic fibers: Of yarns of different colors: Of double knit or interlock construction: Other. The rate of duty will be 10% 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 at https://hts.usitc.gov/.
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:
HTSUS
Tariff shift and/or other requirements
6001-6006
(1) Except for fabric of wool or of fine animal hair, a change from greige fabric of heading 6001 through 6006 to finished fabric of heading 6001 through 6006 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 paragraph (1) of this entry, a change to heading 6001 through 6006 from any heading outside that group, provided that the change is the result of a fabric-making process.
“Fabric-making process” is defined in paragraph (b)(2) of Section 102.21 as:
… any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarn, twine, cordage, rope, or fabric strips and results in a textile fabric. In this case, (1) above regarding the tariff shift rule for headings 6001-6006 is inapplicable to the two knit fabrics, because they do not go through a process of both dyeing and printing while being accompanied by two or more of the other allowable finishing operations. Alternatively, (2) above regarding the tariff shift rule for headings 6001-6006 provides for a “change to heading 6001 – 6006 from any heading outside that group, provided that the change is the result of a fabric-making process.” Here, the yarn for style GG6019 is produced in the United States and shipped to Mexico, where the yarn is knitted into fabric. Moreover, the yarn and fibers for style GG6020 are produced in the United States and shipped to Mexico, where the yarn and fibers are knitted into fabric. As both the yarn for style GG6019 and yarn and fibers for GG6020 are classified in headings outside of headings 6001-6006 and change upon being knitted into fabric by a “fabric-making process” in Mexico, then in accordance with 19 CFR 102.21(c)(2) the country of origin for the two knitted fabrics is Mexico.
USMCA ELIGIBILITY:
The 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. 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, in relevant part:
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-- (i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; (ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; (iii) 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)) Since the knit fabrics contain non-originating materials from France and Turkey, they are not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i). Moreover, under GN 11(b)(ii), the knit fabrics are not a good produced entirely in Mexico, exclusively from originating materials. Therefore, we must next determine whether the non-originating materials undergo the tariff shift and other requirements provided for in GN 11(b)(iii) and GN 11(o). The applicable rule of origin for merchandise under heading 6006 is located within GN 11(o), HTSUS, which provides in relevant part, the following tariff shift: Chapter 60 1. A change to headings 6001 through 6006 from any other chapter, except from headings 5106 through 5113, chapter 52, headings 5310 through 5311, or chapters 54 through 55.
According to the requisite tariff shift rule under GN 11(o), Rule 1 to Chapter 60, HTSUS, a tariff shift must occur. In the case of the subject items, both the meta-aramid and the modacrylic fibers are classifiable in chapter 55. As the rule specifically excepts Chapter 55, HTSUS, the required tariff shift does not occur.
Lastly, a good may be considered “originating in the territory of a USMCA country” and eligible for preferential tariff treatment if it satisfies GN 11(b)(iv). The first requirement of GN 11(b)(iv), however, is that the good must be produced entirely in the territory of one or more USMCA countries. As the two knitted fabrics are not produced entirely within one or more USMCA countries, the fabrics are not originating under GN 11(b)(iv).
Based upon the preceding analysis, the fabrics do not qualify for preferential treatment under the USMCA.
HOLDING:
The applicable subheading for style GG6019 will be 6006.32.0060, HTSUS, which provides for Other knitted or crotched fabrics: Of synthetic fibers: Dyed: Of double knit or interlock construction: Other. The rate of duty will be 10% ad valorem.
The applicable subheading for style GG6020 will be 6006.33.0060, HTSUS, which provides for Other knitted or crotched fabrics: Of synthetic fibers: Of yarns of different colors: Of double knit or interlock construction: Other. The rate of duty will be 10% ad valorem.
The country of origin of both styles GG6019 and GG6020 is Mexico.
The criteria required for preferential treatment under the USMCA has not been satisfied based upon an analysis of the facts provided. Therefore, styles GG6019 and GG6020 are ineligible for preferential treatment under the USMCA and will be subject to the column 1 General Rate of duty within the HTSUS.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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, contact National Import Specialist Nicole Rosso at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division