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HQ 087338


August 22, 1990

CLA-2 CO:R:C:G 087338 DRR

CATEGORY: CLASSIFICATION

TARIFF NO.: 6209.20.5040

Ms. Gloria M. Columbe
A.N. Deringer, Inc.
30 West Service Road
Champlain, New York 12919-9703

RE: Country of origin of diapers

Dear Ms. Columbe:

This is in response to your letter of May 31, 1990, in which you requested, on behalf of Emval Creations, Inc., a country of origin determination for diapers under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The merchandise at issue is a 100 percent cotton flannel diaper fabricated in Canada from fabric made in China. The fabric is woven in China from 100 percent cotton yarn. The fabric is shipped to Canada in either flat fold form or in rolls. In Canada, the fabric is marked and cut to length and width. It is then cut in half and the two ply fabric sewn on all four sides to form diapers. The diapers are inspected, trimmed of excess threads, then folded manually, packaged by the dozen and packed in cartons for shipping. According to your submission, the cost of the fabric is $3.58 per dozen and the production costs are $4.50 per dozen.

ISSUE:

Whether the diapers in question are a product of Canada or China for duty purposes.

LAW AND ANALYSIS:

The United States-Canada Free Trade Agreement of 1988 (FTA) is set out in General Note 3(c)(vii) to the HTSUSA. The agreement provides a special rate of duty for goods originating in the territory of Canada (General Note 3(c)(vii)(A)). General Note 3(c)(vii)(B) states that goods imported into the United States are eligible for treatment as goods originating in the territory of Canada" if they have been transformed in the territory of Canada and/or the United States so as to be subject to a change in tariff classification in Canada as set forth in General Note 3(c)(vii)(R). General Note 3(c)(vii)(R)(11)(oo) provides that, in order to be considered goods originating in Canada, the goods must change to any heading of chapter 62 from any heading outside that chapter other than headings 5204 through 5212. The fabric from which the diapers are made would be classified in heading 5208 and the diapers themselves classified in chapter 62. This would appear to disqualify the articles here in question. However, paragraph (qq) of the General Notes states that, notwithstanding rule (oo), articles provided for in chapters 61 and 62 that are both cut and sewn in Canada from fabric obtained from a third country and that meet other applicable conditions for preferred tariff treatment under subdivision (c) (vii) are subject to special rates of duty under the FTA. Accordingly, the diapers are eligible for treatment as goods originating in the territory of Canada.

Classification of merchandise under the HTSUSA is in accordance with the General Rules of Interpretation (GRI), 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. Heading 6209, HTSUSA, provides for babies' garments and clothing accessories. Subheading 6209.20.5040, HTSUSA, provides for diapers.

HOLDING:

The diapers in question are classified under subheading 6209.20.5040, HTSUSA. The diapers in question are goods originating in the territory of Canada, and are entitled to a special duty rate of 7.9 percent under the United States-Canada Free Trade Agreement (FTA) upon compliance with all applicable regulations. The textile category is 239.

Due to the changeable nature of the statistical annotation and the restraint (quota/visa) categories applicable to textile merchandise, you should contact the local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

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 177.9(b) (1), Customs Regulations (19 CFR 177.9 (b) (1)). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it subsequently be 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 effect the determination of country of origin. Accordingly, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,

John Durant, Director

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