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HQ 559736




April 11, 1996

MAR-2 RR:TC:SM 559736 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; NAFTA Marking Rules; 19 U.S.C. 1304; Article 509; T.D. 95-69; 19 CFR 102.19

Dear Ms. Polito:

This is in response to your letter dated March 7, 1996, 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 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), which will be in effect on July 1, 1996.

In HQ 559625 dated January 19, 1996, Customs ruled that section 334, supra, applies for purposes of determining the country of origin for marking under 19 U.S.C. 1304 and that under section 334 rules of origin the country of origin of the down comforters manufactured in the U.S. from imported shells, would be the country of origin of the fabric of the shells (China). You now request Customs to determined whether any of the proposed markings "Made in China", "Made in China Sewn and Stuffed in the U.S.", or "Sewn and Stuffed in the U.S./Made in China" are acceptable country of origin markings for the down comforters which are manufactured in the U.S. from comforter shells of Chinese origin.

ISSUES:

1. What is the country of origin of the NAFTA qualifying down comforters produced in Canada, in the manner described above, for purposes of country of origin marking and visa requirements under the context of section 334 of the URAA. 2. On or after the effective date of section 334 of the URAA, will the proposed markings, "Made in China", "Made in China Sewn and Stuffed in the U.S.", or "Sewn and Stuffed in the U.S./Made in China" be acceptable country of origin markings for down comforters produced in the U.S. from Chinese origin comforter shells?

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 determined 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.

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.

Country of Origin of NAFTA Originating Comforters

You submit that the NAFTA-originating down comforters manufactured in Canada, in the manner described above, should be marked "Made in Canada" and that such comforters would not be subject to quota restrictions upon importation into the U.S. Thus, you request Customs verification as to the proper country of origin marking and visa requirements applicable to the subject NAFTA-originating down comforters under the context of the URAA textile rules of origin. In T.D. 95-69 published in the Federal Register on September 5, 1995 (60 Fed. Reg. 46194), Customs stated in part that:

As regards the alleged ambiguity between section 102.19 and 102.21, Customs does not believe that any change to the proposed regulatory texts is appropriate in this regard. Section 102.19 was originally adopted in a strictly NAFTA context in order to clarify the relationship between the Part 102 NAFTA marking rules and the separate rules of origin that apply under the NAFTA for duty preference purposes. Proposed section 102.21(c) included section 102.19 among the existing Part 102 provisions that may apply for purposes of the section 102.21(c) general rules because a failure to mention section 102.19 in this context might incorrectly give the impression, contrary to the express terms of section 334 as discussed in the preceding comment response, that the rules of origin applicable to "originating goods" under the NAFTA do not take precedence over the section 102.21 provisions. (Emphasis added).

Thus, in this case, assuming that the down comforters manufactured in Canada in the manner described above are considered to be "originating goods" under the rules of origin for the NAFTA (19 U.S.C. 3332) and the conditions set forth in section 102.19 are satisfied, the country of origin of the down comforters for quota and marking purposes is Canada. If in such instances, a non-NAFTA country is determined to be the origin of the down comforters under 19 CFR 102.21, section 102.19 (which implements 19 U.S.C. 3332) will "override" that origin determination and the country of origin of the down comforters will be Canada. Thus, marking these down comforters "Made in Canada" or "Canada" is acceptable under 19 U.S.C. 1304.

Marking of the Comforters Manufactured in the U.S.

You have requested Customs to rule on whether the proposed markings "Made in China", "Made in China Sewn and Stuffed in the U.S.", or "Sewn and Stuffed in the U.S./Made in China" are acceptable country of origin markings for the down comforters covered by HQ 559625, supra.

The proposed markings "Made in China", "Made in China Sewn and Stuffed in the U.S.", or "Sewn and Stuffed in the U.S./Made in China", each indicate that the country of origin of the finished down comforters is China (the country of origin of the fabric) which is consistent with the origin rules set forth in section 334 of the URAA. Accordingly, the proposed markings would satisfy the country of origin marking requirements of 19 U.S.C. 1304 and would be acceptable country of origin markings for the down comforters which are produced in the U.S. from Chinese origin shells.

HOLDING:

Assuming that the down comforters produced in Canada in the manner described above are considered to be "originating goods" under the NAFTA and the conditions set forth in section 102.19 are satisfied, the country of origin of the down comforters for quota and marking purposes is Canada. Marking the down comforters "Made in Canada" is an acceptable country of origin marking for the down comforters under 19 U.S.C. 1304.

Pursuant to the origin rules set forth in section 334 of the URAA (implemented under 19 CFR 102.21) and the country of origin marking requirements of 19 U.S.C. 1304 the proposed country of origin markings "Made in China", "Made in China Sewn and Stuffed in the U.S.", or "Sewn and Stuffed in the U.S./Made in China" are acceptable country of origin markings for the down comforters produced in the U.S. from Chinese origin shells.

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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