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HQ 559625




Janaury 19, 1996

MAR-2 RR:TC:SM 559625 AT

CATEGORY: MARKING

Margaret R. Polito, Esq.
Neville, Peterson & Williams
80 Broad Street
34th Floor
New York, New York 10004

RE: Country of origin of NAFTA qualifying down comforters and proper country of origin marking requirements for imported down comforter shells to be further processed into finished down comforters in the U.S.; Section 334 of the Uruguay Round Agreements Act; Annex 401 of the NAFTA; 19 U.S.C. 1304; Article 509

Dear Ms. Polito:

This is in response to your letter on behalf of your client Pillowtex Corporation ("Pillowtex") requesting a ruling on the country of origin of North American Free Trade Agreement ("NAFTA") qualifying down comforters to be imported into the U.S. and the proper country of origin marking requirements for imported down comforter shells which are to be further processed into finished down comforters in the U.S.

FACTS:

According to your submission, Pillowtex intends to import into the U.S. either finished down comforters manufactured in Canada from foreign down comforter shells or down comforter shells to be used in the manufacture of finished down comforters in the U.S. You state that production operations performed in Canada or the U.S. to make the finished down comforters are identical and are described as follows:

Down comforter shells of foreign origin which are produced from a specialty fabric known as "down proof", a fabric that is woven very tightly in order to prevent down and feathers from escaping, is to be imported into either Canada or the U.S. You state that for purposes of this ruling the fabric used in the construction of the comforter shells is woven in China and that the comforter shells are also produced in China.

The foreign origin comforter shells after importation into Canada or the U.S. are filled with down which has been produced by refining raw feathers. After the down is blown into the shells, the shells are sewn shut, producing the finished down comforters. You state that some of the comforters may be quilted in order to impart certain characteristics.

You state that with respect to the finished down comforters which are produced in Canada, in the manner described above, and then imported into the U.S., Customs in HQ 897005 (May 4, 1994) determined that the Canadian produced comforters are considered to be NAFTA-originating goods pursuant to Annex 401 of the NAFTA. You seek a determination as to whether the NAFTA qualifying down comforters produced in Canada, are subject to any visa requirements when imported into the U.S. You have requested Customs to based this determination in the context of the rules of origin for textile and apparel products set forth in Section 334 of the Uruguay Round Agreements Act ("URAA") (Pub. L. 103-465).

With respect to your request as to the applicability of the origin rules of section 334 of the URAA to NAFTA-originating goods, Customs has already clearly expressed its position on this matter in T.D. 95-69, published in the Federal Register on September 5, 1995 (60 Fed. Reg. 46194). Thus, we see no reason to reiterate our position on this issue.

You also seek a determination as to the proper country of origin marking requirements for the finished down comforters which are to be produced in the U.S. from Chinese origin comforter shells, in the manner described above. This determination is also requested to be based in the context of the rules of origin for textile and apparel products set forth in Section 334 of the Uruguay Round Agreements Act ("URAA") (Pub. L. 103-465).

ISSUE:

What are the proper country of origin marking requirements for finished down comforters produced in the U.S. from imported Chinese origin comforter shells, in the manner described above, under the context of section 334 of the URAA?

LAW AND ANALYSIS:

On December 8, 1994, President Clinton signed into law URAA, Public Law 103-465, 108 Stat. 4809. Subtitle D of Title III of URAA deals with textiles and includes section 334 (codified at 19 U.S.C. 3592) which concerns rules of origin for textile and apparel products.

Paragraph (a) of section 334 provides that the Secretary of the Treasury shall prescribe rules implementing the principles contained in paragraph (b) for determining the origin of "textiles and apparel products".

Section 334(b)(1) of the URAA sets forth general principles concerning how the origin of textile and apparel products should be determined. That section provides in pertinent part as follows:

Except as otherwise provided for by statute, a textile or apparel product, for purposes of the customs laws and the administration of quantitative restrictions, originates in a country, territory, or insular possession, and is the growth, product, or manufacture of that country, territory, or insular possession, if-

(A) the product is wholly obtained or produced in that country, territory or insular possessions;

(B) the product is a yarn, thread, twine, cordage, rope, cable or braiding and-

(i) the constituent staple fibers are spun in that country, territory, or possession, or

(ii) the continuous filament is extruded in that country, territory, or possession,

(C) the product is a fabric, including a fabric classified under chapter 59 of the HTS, and the constituent fibers, filaments or yarns are woven, knitted, needled, tufted, felted, entangled or transformed by any other fabric-making process in that country, territory, or possession from its component pieces; or

(D) the product is any other textile or apparel product that is wholly assembled in that country, territory, or possession from its component pieces.

(2) Special Rules - Notwithstanding paragraph (1)(D)-

(A) the origin of a good that is classified under one of the following HTS headings or subheadings shall be determinant in accordance with paragraph (A),(B), or (C) of paragraph (1), as appropriate: 5609, 5807, 5811, 6209.20.50.40, 6213, 6214, 6301, 6302, 6303, 6304, 6305, 6306, 6307.10, 6307.90, 6308, or 9404.90; ...

On September 5, 1995, Customs published in the Federal Register the final regulations implementing section 334 of the URAA. (60 Fed. Reg. 46188). These regulations are set forth in 19 CFR 102.21.

You have requested the proper country of origin marking requirements for finished down comforters which are manufactured in the U.S. in the manner described above.

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Section 334(b)(1) of the URAA provides, in part, that the origin rules set forth in section 334 apply
for purposes of the customs laws and the administration of quantitative restrictions ... (Emphasis added).

There is no dispute that section 1304 of the Tariff Act of 1930 is a Customs law. Thus, in order to determine the proper country of origin marking requirements under 19 U.S.C. 1304 for the finished down comforters that are to be manufactured in the U.S. in the manner described above, section 334 of the URAA must be applied.

You state that the finished down comforters are classified in subheading 9404.90, HTSUS. The applicable rule set forth in in 102.21 provides that: 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.

Thus, assuming that the comforter shells are of Chinese origin the proper country of origin of the finished down comforters for purposes of the marking requirements of 19 U.S.C. 1304, is China, where the fabric of the shell was formed (woven).

You assert that marking the finished down comforters with the phrase "Made in China" in satisfaction of the origin determination of section 334 of the URAA and the country of origin marking requirements of 19 U.S.C. 1304 violates the labeling requirements of the Textile Fiber Products Identification Act ("Fiber Act") (15 U.S.C. 70 et. seq.). The Fiber Act is administered by the Federal Trade Commission ("FTC") and prohibits the sale of textile products that are marked in a false or deceptive manner. You state that the FTC requires that each textile product made in the U.S. either in whole or in part of imported material, shall disclose this fact. You contend that marking the finished down comforters "Made in China" violates the Fiber Act because the marking would mislead or deceive an ultimate purchaser of the comforter into believing that the entire down comforter was of Chinese origin, when in fact only the comforter shell is of Chinese origin. Based on this, you contend that the down comforters should be marked in a manner which indicates that the down comforter is assembled into a finished down comforter in the U.S. You believe that marking the finished down comforters with the phrase "Comforter Assembled in U.S. From Fabric Made in China" would satisfy both the marking requirements of 19 U.S.C. 1304 and the labeling requirements of the Fiber Act and have requested Customs determination as to whether the proposed marking "Comforter Assembled in U.S. From Fabric Made in China" would be an acceptable country of origin marking for the finished down comforters.

The proposed marking "Comforter Assembled in U.S. From Fabric Made in China" is not an acceptable country of origin marking for the finished down comforters under the marking requirements 19 U.S.C. 1304.

The origin rules of section 334 of the URAA, which apply for determining the proper country of origin marking requirements under 19 U.S.C. 1304, indicate that the country of origin of the finished down comforter is China, where the fabric for the comforter shell is formed. However, the proposed marking "Comforter Assembled in U.S. From Fabric Made in China" only indicates that the fabric is of Chinese origin, not that the down comforter is of Chinese origin, which is in direct conflict with the origin determination made under section 334 of the URAA. Since the proposed marking is in direct conflict with the origin determination made pursuant to section 334 of the URAA, we find that the proposed marking "Comforter Assembled in U.S. From Fabric Made in China" does not satisfy the marking requirements of 19 U.S.C. 1304 and, thus, is not an acceptable country of origin marking for the finished down comforters.

However, phrases such as "Comforter Made in China Further Processed in U.S." or "Comforter Made in China Sewn in the U.S." are consistent with the origin rules for down comforters under section 334 of the URAA and will satisfy the marking requirements of 19 U.S.C. 1304. Thus, these phrases would be acceptable country of origin markings for the finished down comforters.

HOLDING:

Pursuant to the origin rules set forth in section 334 of the URAA and the country of origin marking requirements of 19 U.S.C. 1304 the proposed country of origin marking "Comforter Assembled in U.S. From Fabric Made in China" is not an acceptable country of origin marking for finished down comforters manufactured in the U.S. in the manner described above. However, markings such as "Comforter Made in China Further Processed in U.S." or "Comforter Made in China Sewn in the U.S." satisfy the marking requirements of 19 U.S.C. 1304 and are acceptable country of origin markings for the finished down comforters.

A copy of this ruling should be attached to the entry documents filed at the time this merchandise is entered. 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

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