HQ 956240 - Country of origin of a down comforter; NAFTA; 19 CFR 102, Customs Regulations; General Note 12, HTSUSA - United States International Trade Commision Rulings

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HQ 956240

January 20, 1995
Margaret R. Polito, Esq.
Neville, Peterson & Williams
80 Broad Street
Suite 3400
New York, NY 10004

RE: Country of origin of a down comforter; NAFTA; 19 CFR 102, Customs Regulations; General Note 12, HTSUSA

Dear Ms. Polito:

This is in response to your inquiry of April 11, 1994, requesting a country of origin determination for down comforters on behalf of your client, Pillowtex. There was no sample submitted for examination. This is a prospective request.

FACTS:

The importer contemplates importing comforter shells from Hong Kong and/or China. These shells will either be made of cotton or man-made fiber material. The production of the shells will be based on particular specifications from prospective clients. The shells will come in twin, full, queen, or king sizes. The manufacturing process is as follows: Either in China and/or Hong Kong, fabric is cut into pieces and sewn into a comforter shell; One or more openings is left unattached so that down filling can be blown inside of the shell. Shell construction can range from a simple shell with no additional patterns sewn onto it, to a shell that has "blocks" or separate compartments designed to prevent the movement of the down. These compartments or blocks are created by sewing vertical strips of material called "baffles" through the top and bottom layers of the comforter shell. The completed shells will be shipped to Canada.

In Canada, down will be blown into the shells and the shells will be finished. The down used to fill these shells will come from various countries, including China, France, or the United States. In certain instances, the importer will import down from China and France into the United States for the purposes of grading, blending and separating. The resulting mixture would be blended with U.S. origin down to produce fill material. The down blend would then be transported to Canada. In the alternative, down may be shipped directly from France, China or the United States to Canada for assembly with the shells.

ISSUE:

What is the country of origin for the subject down comforter for marking purposes?

LAW AND ANALYSIS:

As the merchandise in question undergoes processing operations in Canada, which is a country provided for under the North American Free Trade Agreement (NAFTA), it is subject to the country of origin marking rules set forth in the interim amendments to the Customs Regulations (19 CFR 102). These interim rules took effect on January 1, 1994. Corrections to the interim regulations were published on February 3, 1994 (59 Fed. Reg. 5082). Additional provisions implementing Annex 311 of the NAFTA are contained in the interim regulations amending part 134, Customs Regulations, published as T.D. 94-1 on December 30, 1993 (58 Fed. Reg. 69460).

Section 134.1(b), of the interim Customs Regulations states that for a good of a NAFTA country, the NAFTA marking rules will determine the country of origin. The NAFTA marking rules appear in Part 102 of the interim regulations published as T.D. 94-4. Section 102.11 sets forth the general rules to determine country of origin.

(a) The country of origin of a good is the country in which:

(1) The good is wholly obtained or produced;

(2) The good is produced exclusively from domestic materials; or

(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.

As the down comforter is not wholly obtained or produced in Canada or produced exclusively from domestic materials in Canada, we must determine whether each foreign material incorporated in the finished comforter undergoes an applicable change in tariff classification in accordance with Section 102.11(a)(3) and provided in Section 102.20.

The finished down comforter is classifiable in subheading 9404.90 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Section 102.20(t) provides the applicable tariff shift rule for subheading 9404.90, HTSUSA. Section 102.20(t) states that a change to subheading 9404.90 from any other heading satisfies the tariff classification shift provisions set forth in Section 102.11(a)(3).

The comforter shell which is cut and sewn in China and/or Hong Kong is classifiable in subheading 6307.90, HTSUSA. As stated above, the down used to fill the comforter shell will come from various countries, including China, France, or the United States. In some instances down from various countries will be imported into the United States for the purposes of grading, blending and separating. This down sourced from various countries is classifiable in subheading 0505.10, HTSUSA.

The change in classification pertaining to the down and comforter shell to subheading 9404.90 for the finished down comforter is a definite tariff classification change in accordance with Section 102.20(t). This change satisfies the aforementioned tariff shift rule.

Moreover, as the aforementioned provisions are interim rules which may be subject to change, so that no question should arise as to the appropriate country of origin of the subject comforter for marking purposes, Customs will look to Section 102.19, the NAFTA override provision, which states the following, in pertinent part:

Notwithstanding any provision of these rules other than Section 102.11(a) or (b) or Section 102.14, if a good originates under Chapter Four of the NAFTA, and the country of origin of that good is not determined to be a single NAFTA country under Section 102.11(a) or (b), the country of origin of the good is the last NAFTA country in which the good underwent production other than minor processing. *

General Note 12, HTSUSA, incorporates Article 401 of the North American Free Trade Agreement (NAFTA) into the HTSUSA. Note 12(b) provides, in pertinent part:

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or,

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials.

As the down comforter is made of a comforter shell from Hong Kong/and or China and down from the United States (a NAFTA country), China, or France, it does not meet the eligibility requirements of General Note 12(b)(i) or 12(b)(iii). Therefore, a determination of NAFTA eligibility will be based on General Note 12(b)(ii). To qualify under this provision, we must determine whether the non-originating material (i.e., the down and the comforter shell), undergo the requisite change in tariff classification stipulated in General Note 12(t).

The finished down comforter is classifiable in subheading 9404.90, HTSUSA. The rule applicable to goods of Heading 9404, HTSUSA, is provided for in General Note 12(t), Chapter 94, Subheading rule 7, which states the following:

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.

The comforter shell is classifiable in subheading 6307.90, HTSUSA, and the down feathers are classifiable in subheading 0505.10, HTSUSA. The finished down comforter is classifiable in subheading 9404.90, and therefore, the requisite tariff classification shift requirement of General Note 12(t) has been met. Consequently, the down qualifies for NAFTA preferential treatment.

Finally, since the down is blown into the comforter shell in Canada and this is not considered minor processing, in accordance with Section 102.19, the country of origin marking of the finished down comforter is Canada.

HOLDING:

The down comforter at issue is eligible for NAFTA preferential duty treatment. Also, in accordance with 19 CFR 102, it is a product of Canada for country of origin marking purposes.

This ruling letter is being issued pursuant to Article 509 of the NAFTA and Section 181, Subpart I, of the Customs Regulations.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director
Commercial Rulings Division

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