HQ 959018 - Country of origin determination for a hat and scarf set; Section 102.21, Customs Regulations - United States International Trade Commision Rulings

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HQ 959018

April 12, 1996
CLA-2 RR:TC:TE 959018 CAB

CATEGORY: CLASSIFICATION

Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway
43rd Floor
New York, NY 10036-8901

RE: Country of origin determination for a hat and scarf set; Section 102.21, Customs Regulations

Dear Sirs:

This is in response to your inquiry of March 7, 1996, requesting a country of origin determination, on behalf of your client, Liz Claiborne, Inc., (LCI) pursuant to Section 102.21, Customs Regulations, for a hat and scarf set. No sample was submitted for examination.

FACTS:

LCI intends to import a set consisting of a hat and scarf. It is requested that for the purposes of this country of origin request that Customs assume that the hat and scarf are classifiable under Heading 6505.90 of the Harmonized Tariff Schedule of the United States Annotated and Heading 6214, (HTSUSA), respectively.

The proposed manufacturing begins with the weaving of fabric in Country "A". The fabric for each article will then be shipped to Country "B" where: 1) all of the hat components will be cut to size and shape and then sewn together to form a finished hat; and 2) all manufacturing operations (e.g. cutting and hemming) necessary to form a finished scarf will be completed. The completed hat and scarf will then be exported to the United States. Countries "A" and "B" will not include Israel or a signatory of the North American Free Trade Agreement (NAFTA). Customs will assume that the finished scarf consists of one piece of fabric which is simply cut and hemmed in Country "B".

ISSUES:

1. Will one origin determination collectively govern for the hat and scarf set or will a separate origin determination be made for each article of the set?

2. a) If one country of origin determination is made, will the set be considered a product of Country "A" or Country "B"?
b) If the country of origin for the hat and scarf will be determined separately, what will be the respective countries of origin under the new rules?

3. If we conclude that the origin of either article is Country "A", would a visa from Country "A" (the country in which the fabric was formed) or Country "B" (the country in which all further manufacturing operations were performed) be required?

4. If we conclude that the origin of either article is Country "A", would the applicable quota category for that article be the category associated with the woven fabric produced in Country "A" or that associated with the finished article completed in Country "B"?

LAW AND ANALYSIS:

Pursuant to Section 334 of the Uruguay Round Agreements Act, new rules of origin will be effective on textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. These rules were published in the Federal Register, 60 Fed. Reg. 46188 (September 5, 1995). Section 102.21, Customs Regulations (19 CFR Section 102.21), sets forth the general rules to determine country of origin. Thus, the country of origin of a textile product will be determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21. Section 102(c)(1) sets forth the general rule for determining the country of origin of a textile or apparel product in which the good was wholly obtained or produced. Section 102.21(c)(2) provides for instances where the country of origin of a textile or apparel product cannot be determined under Section 102.21(c)(1).

Section 102.21(c)(2) provides, in pertinent part:

Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section.

1. Will one origin determination collectively govern for the hat and scarf set or will a separate origin determination be made for each article of the set?

In this instance, the importer states that a hat and scarf will be imported as part of a set. Thus, for reasons of determining the country of origin of the subject articles, Customs is assuming these articles meet the requirements necessary for classification as a set pursuant to the General Rules of Interpretation (GRI).

Section 102.21(d) addresses the treatment of sets for country of origin purposes. Section 102.21(d) provides the following:

Treatment of sets. Where a good classifiable in the HTSUS as a set includes one or more components that are textile or apparel products and a single country of origin for all of the components of the set cannot be determined under paragraph (c) of this section, the country of origin of each component of the set that is a textile or apparel product shall be determined separately under paragraph (c) of this section.

Specific rules by tariff classification. The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:

6213-6214 The country of origin of a good classifiable under heading 6213 through 6214 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

6505.90 (1) If the good consists of two or more components, a change to subheading 6505.90 from any other heading, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

The fabric used to construct the subject articles will be woven in Country "A". The fabric will then be shipped to Country "B", where all of the hat pieces will be cut to size, shape, and then sewn into a finished hat. All of the manufacturing operations required to form the finished scarf including cutting and hemming will also occur in Country "B". The finished hat is classifiable in subheading 6505.90 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), while the finished scarf is classifiable under Heading 6214, HTSUSA. In accordance with the tariff shift rule which applies to goods classifiable in subheading 6505.90, the finished hat undergoes a change in tariff classification as a result of the hat being wholly assembled in Country "B". The fabric used to construct the finished scarf is woven in Country "A"; therefore, the fabric comprising the scarf is formed by a fabric-making process in Country "A". In this case, each article of the set undergoes a tariff shift in two separate countries. A single country of origin cannot be determined for both the hat and scarf. Pursuant to Section 102.21(d), the country of origin of each component of the set shall be determined separately. Accordingly, the country of origin of the scarf is Country "A" and the country of origin of the hat is Country "B".

2. a) If one country of origin determination is made, will the set be considered a product of Country "A" or Country
b) If the country of origin for the hat and scarf will be determined separately, what will be the respective countries of origin under the new rules?

In this case, the country of origin of each component of the set is determined separately. Therefore, no country of origin decision is made for the set as a whole. This conclusion is in accordance with Section 102.21(d) and Customs long held position that tariff treatment of textile articles as a set is not determinative for country of origin purposes. As stated above, the country of origin for the hat and scarf is countries "B" and "A", respectively.

3. If we conclude that the origin of either article is Country "A", would a visa from Country "A" (the country in which the fabric was formed) or Country "B" (the country in which all further manufacturing operations were performed) be required?

Since we have determined that the country of origin of the scarf is Country "A" a visa from Country "A" is required for the scarf. The visa is required from the country determined to be the country of origin.

4. If we conclude that the origin of either article is Country "A", would the applicable quota category for that article be the category associated with the woven fabric produced in Country "A" or that associated with the finished article completed in Country "B"?

Each article of the set is subject to the quota category applicable to that particular finished article.

HOLDING:

The country of origin of the hat is Country "B". The country of origin of the scarf is Country "A".

This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). If the specific factual situation is not as described above, this ruling may not be valid. In such an event, it is recommended that a new ruling request be submitted.

Sincerely,

John Durant, Director
Tariff Classification Appeals

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