OT:RR:NC:N2:349
Ms. Penny Zhang
Evergrace Home Inc.
5 Floor Sun Shine Mansion, 2000 Pudong Avenue Shanghai 200135 China
RE: Classification and country of origin determination for a bath rug; Section XI, Note 7(b); 19 CFR 102.21(c)(2); tariff shift
Dear Ms. Zhang:
This is in reply to your letter dated December 11, 2024, requesting a classification and country of origin determination for a bath rug which will be imported into the United States. You presented three samples representing various stages of production of the bath rug, Item #EG2412001. The samples will be retained for training purposes.
FACTS:
Sample 1 is a gray piece of fabric, measuring approximately 42 x 90 inches, of 100 percent polyester waffle weave construction. The piece of fabric has regular breaks in the waffle weave pattern, approximately 1 ½ inches wide, where groups of weft yarns are loosely woven with groups of warp yarns. These breaks occur every 26 ½ inches. This same loosely woven pattern appears on the two selvedges using burgundy colored warp yarns. This piece of fabric, though representative of the fabric forming the completed article, produces a larger sized rug than Samples 2 and 3. The spacing of the breaks in weave pattern occurs at shorter intervals for a 20 × 30 inch rug.
Sample 2 is gray rug composed of 100 percent polyester woven waffle fabric. This item, measuring approximately 20 × 30 inches was cut from the fabric represented in Sample 1 along the areas of demarcation where there are breaks in the weave pattern resulting in all four edges having groups of weft yarns loosely woven with groups of warp yarns. The loosely woven warp yarns on the selvedge are green. You state that these yarns mark where the factory should create the fringe. This rug has been heat treated which you state provides texture to the rug.
Sample 3, Item #EG2412001, is a finished grey-green rug composed of 100 percent polyester woven waffle fabric. An application of hot melt glue is applied to the back of the rug to create a non-slip surface. The rugs are absent the loosely woven weft yarns from the areas of demarcation and the colored warp yarns found in Samples 1 and 2. All four edges are fringed. The fringe is formed by removing the colored warp yarns and the loosely woven weft yarns that appear on Samples 1 and 2. The rectangular shaped rug measures 20 x 30 inches. The rug is intended to be used on the floor outside the bathtub or shower area while bathing.
The samples identified, above, are indicated in parentheses, below, after the production step that results in the sample. The manufacturing operations for the bathmat are as follows:
SCENARIO 1 China:
The polyester waffle weave fabric is formed. (Sample 1)
The formed woven fabric is exported to Vietnam in rolls.
Vietnam:
The fabric is cut into pieces.
The fabric is heat set. (Sample 2)
The edges of the mat are unraveled to create the fringe.
Hot melt glue is applied to the back. (Sample 3)
Finished rug is packaged and exported to the United States.
SCENARIO 2 China:
The polyester waffle weave fabric is formed. (Sample 1)
The fabric is cut into pieces.
The cut pieces are heat set. (Sample 2)
The heat set cut pieces are exported to Vietnam.
Vietnam:
The edges of the mat are unraveled to create the fringe.
Hot melt glue is applied to the back. (Sample 3)
Finished rug is packaged and exported to the United States.
ISSUE:
What is the classification and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for the waffle weave rug, Item #EG2412001, will be 5702.92.9000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Carpets and other textile floor coverings, woven, not tufted or flocked, whether or not made up, including "Kelem", "Schumacks", "Karamanie" and similar handwoven rugs: Other, not of pile construction, made up: Of man-made textile materials: Other.” The general rate of duty will be 2.7 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 World Wide Web at https://hts.usitc.gov/current.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
Section 334 of the Uruguay Round Agreements Act (“URAA”) (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provides the rules of origin for textiles and apparel products for purposes of the customs laws and the administration of quantitative restrictions, unless otherwise provided by the statute, entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. Section 3592 of title 19 of the U.S.C. has been described as Congress’s expression of substantial transformation as it relates to textile and apparel products. Section 102.21 of the Code of Federal Regulations (19 CFR 102.21), implements 19 U.S.C. 3592 and section 334 of the URAA. 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. See 19 CFR 102.21(c).
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
5701-5705
A change to heading 5701 through 5705 from any other chapter.
In order to identify the country of origin of Item #EG2412001, we must determine at what stage in production the rug makes the change to heading 5702.
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). Heading 5702, HTSUS, provides for “Carpets and other textile floor coverings, woven, not tufted or flocked, whether or not made up, including “Kelem”, “Shumacks”, “Karamanie” and similar hand-woven rugs.” While heading 5702, HTSUS, covers carpets whether or not made up, at GRI 6, classification requires a determination at the international six-digit level whether or not the carpet is “made up.”
Section XI, Note 7 of the HTSUSA, defines the term “made up” for the purposes of Section XI, as follows: For the purposes of this section, the expression “made up” means:
(a) Cut otherwise than into squares or rectangles;
(b) Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example, certain dusters, towels, tablecloths, scarf squares, blankets); (c) Hemmed or with rolled edges, or with a knotted fringe at any of the edges, but excluding fabrics the cut edges of which have been prevented from unravelling by whipping or other simple means; (d) Cut to size and having undergone a process of drawn thread work; (e) Assembled by sewing, gumming or otherwise (other than piece goods consisting of two or more lengths of identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded); or (f) Knitted or crocheted to shape, whether presented as separate items or in the form of a number of items in the length.
The EN to Section XI, Note 7(b), is set forth in the General Notes, Section XI, (II) Chapters 56 to 63, and provides in relevant part as follows:
Made up articles. Under Note 7 to this Section, the expression “made up” in Chapters 56 to 63 means: *** Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working. Goods of this kind include products knitted or crocheted directly to shape and certain dusters, towels, table cloths, scarf squares, blankets, etc., with threads along the warp left unwoven or the weft edges cut to form a fringe. Such articles may have been woven separately on the loom, but may also have been simply cut from lengths of fabric which have bands of unwoven threads (generally warp threads) at regular intervals. These lengths of fabric, from which ready-made articles of the types described above may be obtained by simply cutting the dividing threads, are also considered as “made up” articles. However, rectangular (including square) articles simply cut out from larger pieces without other working and not incorporating fringes formed by cutting dividing threads are not regarded as “produced in the finished state” within the meaning of this Note. The fact that these articles may be presented folded or put up in packings (e.g., for retail sale) does not affect their classification.
The General EN to Chapter 57, HTSUSA, provides examples of floor coverings that are made up. It provides in relevant part:
This Chapter covers carpets and other textile floor coverings in which textile materials serve as the exposed surface of the article when in use. It includes articles having the characteristics of textile floor coverings (e.g., thickness, stiffness and strength) but intended for use for other purposes (for example, as wall hangings or table covers or for other furnishing purposes). The above products are classified in this Chapter whether made up (i.e., made directly to size, hemmed, lined, fringed, assembled, etc.), in the form of carpet squares, bedside rugs, hearth rugs, or in the form of carpeting for installation in rooms, corridors, passages or stairs, in the length for cutting and making up.
When Sample 1 is removed from the loom, it possesses the characteristics of a textile floor covering in terms of thickness, stiffness and strength. Though Sample 3 has been subjected to a heat setting process and the application of hot glue to the back, it is our opinion that the fabric off of the loom has sufficient thickness, stiffness and strength without those processes being performed. Further, Sample 1 contains dividing threads that, when cut, create a fringe. No further working, other than pulling away the loosely woven bands of yarn, is necessary to create a finished rug.
In both scenarios, the rug is made from fabric that is considered to be made up under Section XI, Note 7(b). Therefore, the rug makes the tariff shift in China, where the rug is produced in the finished state without the need for sewing or other working. As per the terms of the tariff shift requirement, country of origin is conferred in China.
SECTION 301 TRADE REMEDIES:
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 5702.92.9000, 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 5702.92.9000, HTSUS, listed above.
The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/programs-administration/trade-remedies, respectively.
HOLDING:
Item #EG2412001, a waffle weave bath rug, is classified under 5702.92.9000, HTSUS, and 9903.88.03, HTSUS. The country of origin is China under both scenarios 1 and 2 pursuant to 19 CFR 102.21(c)(2) .
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, please contact National Import Specialist Kim Wachtel at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division