• NY g89147
• May 09, 2001

• Type : Classification • HTSUS :

CLA-2-RR:NC:TA:349 G89147

Ms. Beverly Finnen
Sweet Kyla Inc.
330 Trillium Drive
Kitchener, Ontario, Canada N2E 2K6

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for a comforter set; 19 CFR 12.130; substantial transformation; 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.21(c)(4); most important assembly or manufacturing process; 19 CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; 19 CFR 102.21(d); sets; 19 CFR 12.130(c); Article 509

Dear Ms. Finnen:

This is in reply to your letter dated April 6, 2001 requesting a classification, status under the NAFTA and country of origin determination for a comforter set which will be imported into the United States.

FACTS:

The subject merchandise, referred to as a four piece crib linen set, consists of a comforter, bumper pad, fitted sheet and a dust ruffle. A sample of Style 2006, “Butter & Blue”, was submitted. The set is sized to fit an infant's crib. The patchwork face side of the "Butter & Blue" comforter is made up of twelve squares. Four squares are made from a 100 percent polyester knit pile fleece fabric with a teddy bear design. Four squares are made from a 100 percent cotton “butter & blue” woven plaid fabric and the final four squares are made from a 100 percent cotton woven fabric printed with a “blue gingham” design. Six bows made from the blue gingham fabric are sewn to the face of the comforter. The back of the comforter is made from a plain 65 polyester and 35 percent cotton woven fabric. The comforter is filled with a polyester batting fabric and quilted through all three layers. A 7-millimeter wide piping made from the blue gingham fabric is inserted into the edge seam on all sides. The matching bumper pad is made up from two sections measuring approximately 10 x 114 and 10 x 44 inches. The outer shell is made from the butter and blue plaid fabric. The pad, which is stuffed with the polyester batting, features fabric tie strings used to affix it to the crib. The tie strings and the binding along the top edge are made from the blue gingham fabric. The fitted sheet is made from the blue gingham cotton fabric. It is elasticized at the top and bottom. The dust ruffle consists of a 65 percent polyester and 35 percent cotton plain woven platform section and a ruffle or skirt made from both the butter and blue plaid and the blue gingham fabrics. The skirt has a 12-inch drop. As requested the samples will be returned.

The comforter set will be packed for retail sale in a vinyl bag. The manufacturing operations for the comforter set are as follows:

TAIWAN: -polyester “teddy bear” pile fabric is knit. -rolls of fabric are shipped to Canada.

ISRAEL: -cotton “blue gingham” fabric is woven. -rolls of fabric are shipped to Canada.

UNITED STATES: -cotton “butter & blue” plaid fabric is woven. -rolls of fabric are shipped to Canada.

VARIOUS COUNTRIES IN THE FAR EAST: -65% polyester and 35% cotton fabric is woven. -rolls of fabric are shipped to Canada.

CANADA: -polyester batting fabric is made. -the fabrics are cut, sewn, stuffed, quilted, etc., forming the various set components. -comforter, bumper pad, fitted sheet and dust ruffle are packed for retail sale and shipped.

You have indicated that the blue gingham fabric used on the bumper pads to make the ties and binding is less than 7 percent of the total weight of the bumper pads.

ISSUE:

What are the classification, eligibility under NAFTA and country of origin of the subject merchandise?

CLASSIFICATION:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

The comforter is classifiable in Heading 9404 as articles of bedding and similar furnishing that are stuffed or fitted. The fitted sheet is classifiable in Heading 6302 as bed linen and the dust ruffle is classifiable under the provision for curtain and bed valances in Heading 6303. The crib bumpers have been classified under Heading 6307 as other made up articles. Since classification of the submitted merchandise in a single heading cannot be determined by applying GRI 1, we must apply the other GRI's.

GRI 3 provides for goods that are, prima facie, classifiable in two or more headings. GRI 3(b) provides that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. According to the Explanatory Notes, the official interpretation of the HTSUSA at the international level, “goods put up in sets for retail sale” refers to goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings; (b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking.

The subject set meets the qualifications of “goods put up in sets for retail sale”. The components of the set consist of four different articles which are, prima facie, classifiable in different headings. They are put up together to carry out the specific activity of furnishing an infant's bed and they are packaged for sale directly to users without repacking. It is our opinion that the comforter is the component that gives the set its essential character.

The applicable subheading for the “Butter & Blue” comforter set will be 9404.90.8505, HTSUSA, which provides for articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: other: other: quilts, eiderdowns, comforters and similar articles… with outer shell of cotton. The general rate of duty will be 13.3 percent ad valorem.

The comforter falls within textile category designation 362. The fitted sheet falls within textile category designation 361 and the dust ruffle falls within textile category designation 369. The bumper pad is not currently assigned a textile category designation. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the U.S. Customs Service Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web Site at WWW.CUSTOMS.GOV. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment.

NAFTA ELIGIBILITY:

The “Butter & Blue” comforter set undergoes processing operations in the United States and Canada which are countries provided for under the North American Free Trade Agreement. The comforter set at issue will be eligible for the NAFTA preference if it qualifies to be marked as a good of Canada and if it is transformed in Canada so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUSA. For heading 9404, HTSUSA, subdivision (t), Chapter 94, rule 7, states that:

A change to subheading 9404.90 from any other chapter, except from headings 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408 or 5512 through 5516.

In the case of the comforter, when the non-originating materials from the Far East, Israel and Taiwan enter Canada they are classifiable, depending on the fabric weight, in heading 5513 or 5514, heading 5208 or 5209 and heading 6001, HTSUSA. As fabrics of headings 5208, 5209, 5513 and 5514 are excepted from meeting the tariff change to subheading 9404.90, HTSUSA, the non-originating materials from Israel and the Far East do not undergo the requisite change in tariff classification. Accordingly, the comforter set is not eligible for the NAFTA preference.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

EXCEPTION FOR TEXTILE GOODS PROCESSED IN ISRAEL

Section 102.21(a) specifically states that the rules in Section 102.21 shall not apply "for purposes of determining whether goods originate in Israel or are the growth, product, or manufacture of Israel." The basis for the Israeli exception is Section 334(b)(5) of the Uruguay Round Agreements Act. Section 334(b)(5) provides that:

This section shall not affect, for purposes of the customs laws and administration of quantitative restrictions, the status of goods that, under rulings and administrative practices in effect immediately before the enactment of this Act, would have originated in, or been the growth, product, or manufacture of, a country that is a party to an agreement with the United States establishing a free trade area, which entered into force before January 1, 1987. For such purposes, such rulings and administrative practices that were applied, immediately before the enactment of this Act, to determine the origin of textile and apparel products covered by such agreement shall continue to apply after the enactment of this Act, and on and after the effective date described in subsection (c), unless such rulings and practices are modified by the mutual consent of the parties to the agreement.

Israel is the only country that qualifies under the terms of Section 334(b)(5). As the Section 334 rules of origin for textiles and apparel products do not apply to Israel, we refer to the 19 CFR 12.130 rules of origin, the rules of origin applicable to textiles and textile products before the enactment of Section 334. Section 334(b)(5) makes clear that if country of origin was conferred in Israel under Section 12.130, Israel will now be accorded the same treatment. This interpretation of Section 334(b)(5) was confirmed in a Notice of a general statement of policy, Treasury Decision 96-58, appearing in the Federal Register, Vol. 61, No. 148, dated July 31, 1996.

Accordingly, applying Section 12.130(b), the standard of substantial transformation governs the country of origin determination where textiles and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory or country where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new and different article of commerce by means of substantial manufacturing or processing.

The blue gingham fabric used to make the piping, patches and bows on the comforter, the ties on the bumper and part of the skirt on the dust ruffle was woven and printed in Israel. The fabric was shipped to Canada where it was cut and assembled with other fabrics into the comforter, dust ruffle and bumper pad. The fitted sheet is made from the same blue gingham fabric. In Canada the fabric is cut on all four sides, the corners are cut and it is sewn and elasticized to form the sheet. In the case of the instant merchandise, the substantial transformation occurs in Canada at the time of the cutting of the fabric and the assembly of those components into the comforter, sheet, dust ruffle and bumper pad. Accordingly, as Israel does not confer origin pursuant to Section 12.130, we then apply the rules in Section 102.21 to determine the country of origin.

SECTION 102.21 RULES OF ORIGIN FOR TEXTILE AND APPAREL PRODUCTS

Section 102.21(d) addresses the treatment of sets for country of origin purposes. Section 102.21(d) provides the following:

Where a good classifiable in the HTSUS as a set includes one or more components that are textile or apparel products and a single country of origin for all of the components of the set cannot be determined under paragraph (c) of this section, the country of origin of each component of the set that is a textile or apparel product shall be determined separately under paragraph (c) of this section.

Although the classification of the subject comforter set, as per an essential character determination, is based on the comforter, as per the terms of Section 102.21(d), the country of origin of each of the items comprising the set must be determined separately.

Paragraph (c)(1) states that “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.” The comforter, sheet, bumper pad and dust ruffle are not wholly obtained or produced in a single country, territory or insular possession, and therefore paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (c)(2) states that “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 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.

6307.90 The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric making process.

9404.90 The country of origin of a good classifiable under subheading 9404.90 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 comforter, dust ruffle and bumper pad are formed in more than one country, Section 102.21(c)(2) is inapplicable for the comforter, dust ruffle and bumper pad. The fitted sheet is comprised of a fabric that is formed in a single country. Following the terms of the tariff shift requirement, the country of origin of the fitted sheet is conferred in Israel where the fabric was woven. However, we have previously determined that the fitted sheet is not the growth, product or manufacture of Israel under the rulings and administrative practices in effect prior to December 8, 1994. The previously cited notice of a general statement of policy, Treasury Decision 96-58, stated in part that:

“…it appears to Customs that Congress, in enacting section 334(b)(5), intended that Israel maintain its status quo ante in regard to country of origin determinations for goods processed in that country. Section 102.21(a), Customs Regulations, is clear on its face that the textile origin rules contained in that section will not be applied to determine whether goods originate in, or are the growth, product or manufacture of Israel. Thus, if a good is determined not to be a product of Israel under the rulings and administrative practices in effect prior to December 8, 1994, applying the rules in section 102.21 cannot result in Israel being the country of origin of the good.”

Noting the above, as the application of a rule in section 102.21 results in Israel being the country of origin of a good, that result is invalid and Customs will bypass that rule and proceed to the next rule in order.

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 subject comforter, sheet, dust ruffle and bumper pad are not knit and headings 6302 and 6303 and subheadings 6307.90 and 9404.90, HTSUSA, are excepted from provision (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). In the case of the fitted sheet, the fabric making process occurs in Israel. As previously noted, the application of the rules in section 102.21 cannot result in Israel being the country of origin and therefore section 102.21(c)(4) is inapplicable for the fitted sheet.

The dust ruffle is made from fabrics that were formed in different countries. 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). In the case of the subject comforter and bumper pad, the fabric making process of the outer shell constitutes the most important manufacturing process. The fabrics for the outer shell of the comforter are sourced in more than one country. No one fabric is more important than the other and therefore section 102.21(c)(4) is inapplicable for the comforter. The outer shell of the bumper pad is formed by a fabric that was woven in a single country. We also note that the Israeli fabric used to form the fabric ties and binding on the bumper pads weighs less than 7 percent of the total weight of the pads. Following the De Minimis rule in section 102.13, that fabric would be disregarded in determining the country of origin. Accordingly, the fabric making process in the United States, where the fabric for the outer shell of the bumper pad is formed, constitutes the most important manufacturing process and the country of origin for the bumper pad is the United States.

However, there is an exception to products from the United States that are sent abroad for processing. Section 12.130(c), Customs Regulations, provides that any product of the United States which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article.

Section 12.130 which remains in effect was originally intended to be used to determine the country of origin of textiles and textile products for quota/visa requirements. In T.D. 90-17, issued February 23, 1990, Customs announced a change in practice and position. This change resulted in Customs using Section 12.130 for quota, duty, and marking purposes when making country of origin determinations for textile goods. In accordance with T.D. 90-17 and Section 12.130(c), the country of origin of the bumper pad made from U.S. woven fabric is Canada, for quota, marking, and duty purposes. However, this position has recently been modified. On July 11, 2000, Customs published T.D. 00-44 in the Federal Register (65 FR 42634) stating that effective October 10, 2000, Customs will no longer apply 19 CFR 12.130(c) for purposes of country of origin marking. Therefore, in accordance with T.D. 00-44, Section 12.130(c) and Section 102.21(c)(4), the country of origin of the instant bumper pad will be the United States. Section 12.130(c) remains in effect for duty and quota purposes and the bumper pad is subject to the general rate of duty noted previously.

Finally, paragraph (c)(5) states that “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 comforter, dust ruffle and the fitted sheet, the country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Canada.

HOLDING:

The “Butter & Blue” comforter set is classified in subheading 9404.90.8505, HTSUSA, which provides for other quilts, eiderdowns, comforters and similar articles with an outer shell of cotton.

The country of origin of the comforter, dust ruffle and fitted sheet is Canada. The country of origin of the bumper pad is the United States. These products are not subject to quota or visa restrictions. The comforter set is not entitled to the NAFTA “CA” special duty.

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 181.100(a)(2). 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 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 181.100(a)(2), 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.

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 John Hansen at 212-637-7078.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.


Sincerely,

Robert B. Swierupski
Director,
National Commodity
Specialist Division