United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 956912 - HQ 956975 > HQ 956936

Previous Ruling Next Ruling
HQ 956936




January 10, 1995

CLA-2 CO:R:C:T 956936 GG

CATEGORY: CLASSIFICATION

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

RE: Eligibility of featherbeds for preferential duty treatment under NAFTA; country of origin marking under NAFTA; Article 509

Dear Ms. Polito:

This is in response to your ruling request of September 8, 1994, regarding the eligibility of a featherbed for preferential duty treatment under the North American Free Trade Agreement (NAFTA). Your client is Pillowtex Corporation of Dallas, Texas ("Pillowtex").

FACTS:

Pillowtex is a manufacturer and importer of bedding products. The company plans to produce featherbeds at its Torfeaco facility in Canada. The featherbeds will be constructed from a 100% cotton woven shell that is filled with feathers. They will contain no embroidery, lace, braid, edging, trimming, piping exceeding 6.35 mm or appliques. Although no sample was submitted, counsel for the importer states that the featherbeds will be identical to those classified under subheading 9404.90.8040 of the Harmonized Tariff Schedule of the United States (HTSUSA) in New York Ruling Letter (NY) 895597, dated June 1, 1994. NY 895597 was upheld upon reconsideration in Headquarters Ruling Letter (HRL) 956409, dated December 22, 1994.

The actual manufacturing operation will consist of washed and processed feathers being blown into the shells, which will then be closed. The feathers will be washed and processed either in Canada after importation, or in the United States prior to being sent to Canada. Both the shells and the feathers will be imported by Pillowtex into Canada as non-originating materials. At the time of importation into Canada, the feathers and cotton shells reportedly are classifiable under subheadings 0505.10 and 6307.90 of the Customs Tariff. (The Customs Tariff is the Canadian implementation of the Harmonized System).

ISSUE:

Do the featherbeds qualify for NAFTA duty preference and what is the country of origin for NAFTA marking purposes?

LAW AND ANALYSIS:

The North American Free Trade Agreement (NAFTA) eliminates tariffs on most goods originating in Canada, Mexico, and the United States over a maximum transition period of fifteen years. Generally, tariffs only will be eliminated on goods that "originate", as defined in Article 401 of the NAFTA and General Note 12, HTSUSA. Article 401 defines "originating" in four ways: (a) goods wholly obtained or produced in the NAFTA region; (b) goods produced in the NAFTA region wholly from originating materials; (c) goods meeting the Annex 401 origin rule; and (d) unassembled goods and goods classified with their parts which do not meet the Annex 401 rule of origin but contain 60 percent regional value content using the transaction value method (50 percent using the net cost method).

The components which comprise the assembled featherbeds, i.e., the cotton shells and the feathers, are imported into Canada as non-originating materials. Therefore, the featherbed is not an originating good through methods (a) or (b) above. Article 401(b) of the NAFTA indicates that goods may "originate" in Canada, Mexico, or the United States, even if they contain non-originating materials, if the materials satisfy the rules of origin specified in Annex 401 of the NAFTA. The Annex 401 rules of origin, as implemented by General Note 12 of the HTSUSA, are based on a change in tariff classification under the Harmonized Tariff Schedule, a regional value content requirement, or both.

The featherbeds are classifiable under subheading 9404.90.8040, HTSUSA. To secure preferential duty treatment under the NAFTA, General Note 12(t)/94.7 requires 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. At the time of importation into Canada, the feathers are classifiable in heading 0505, and the cotton shells in heading 6307, of the Customs Tariff. This merchandise, therefore, undergoes the required tariff shift to be considered an originating good. Consequently, duty preference under the NAFTA is granted.

You have also requested a country of origin marking determination. Part 102 of the Customs Regulations (19 CFR Part 102), published in the Federal Register on January 3, 1994 (59 FR 110), establishes marking rules to determine when a good should be marked as a good of a NAFTA country, i.e., the United States. Canada, or Mexico.

Section 102.11 of the Customs Regulations sets out general rules of origin. Section 102.11(a) states that 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 of the Customs Regulations.

Clearly, methods (1) and (2) are not satisfied in Canada for the subject featherbeds. Therefore, an examination of the third method is necessary. Section 102.20 requires a change to subheading 9404.90 from any other heading for goods classifiable under subheading 9404.90, HTSUSA, to be considered goods of a NAFTA party for country of origin marking purposes. At the time of their importation into Canada, the feathers and cotton shells are classifiable in headings 0505 and 6307 of the Customs Tariff, respectively. The featherbeds thus undergo the required tariff shift under Section 102.20 of the Customs Regulations to be considered goods of Canada for country of origin marking purposes.

HOLDING:

The merchandise at issue is eligible for duty preference under the NAFTA. The featherbeds qualify for marking under 19 CFR Part 102 as goods of a NAFTA country, i.e., Canada.

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

Previous Ruling Next Ruling

See also: