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HQ 959395

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August 6, 1996
CLA-2 RR:TC:TE 959395 jb

CATEGORY: CLASSIFICATION

Sharron A. Lintner
F.W. Myers & Co., Inc.
P.O. Box 188
Champlain, NY 12919

RE: Country of origin determination for a cape and scarf; Section 102.21(c)(2); tariff shift;
Section 102.21(c)(4); most important manufacturing process; NAFTA not applicable

Dear Ms. Lintner:

This is in reply to your letter dated May 21, 1996, on behalf of your client, Scarves and Allied Arts, requesting a country of origin determination for a cape and scarf which will be imported into the United States. Samples were submitted to this office for examination.

FACTS:

The first item, referred to as a shawl, style 520/260, is made of 100 percent acrylic woven fabric. It is rectangular in shape and measures approximately 71 inches by 45 inches and is slit lengthwise in the center for approximately 37 inches. It is worn around the shoulders and extends to cover much of the body.

The second item, style 600/260, is a woven polyester scarf measuring approximately 53 inches by 10.5 inches.

The manufacturing operations for the subject merchandise are as follows:

COUNTRY X (not the United States, Canada or Mexico)

- fabric is formed.

CANADA

- fabric is cut;
- fabric is sewn.

* We will assume that the non-originating fabric also does not originate in Israel. Should this be an incorrect assumption this ruling will not be binding and a new ruling should be requested.

ISSUE:

1. What is the proper tariff classification and duty rate for the subject merchandise?

2. Whether the subject merchandise is eligible for duty free treatment under the North American Free Trade Agreement (NAFTA)?

3. What is the country of origin of the subject merchandise?

LAW AND ANALYSIS:

Tariff Classification

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated is in accordance with the General Rules of Interpretation (GRI). GRI 1 requires that classification be determined according to the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied, in the order of their appearance.

Heading 6202, HTSUS, provides for, among other things, women's or girls' capes and cloaks. Although you describe style 520/260 as a shawl, the submitted item provides much more coverage than a shawl and is more similar to the capes, cloaks, and ponchos provided for in heading 6202, HTSUS. Additionally, we refer you to three Customs rulings which classified similar merchandise as capes in heading 6202, HTSUS: HQ 087172, dated November 19, 1990; HQ 086974, dated August 3, 1990; and 085416, dated November 30, 1989. Accordingly, based on the body coverage, the garment's function, and the above stated rulings, style 520/260 is classifiable as a cape in subheading 6202.13.4020, HTSUSA, which provides for women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: overcoats, carcoats, capes, cloaks and similar coats: of man-made fibers: other: other; other: women's.

Heading 6214, HTSUS, provides for, among other things, scarves. Style 600/260 is properly classified in subheading 6214.30.0000, HTSUSA, which provides for, shawls, scarves, mufflers, mantillas, veils and the like: of synthetic fibers.

NAFTA Eligibility

The subject cape and scarf undergo processing operations in Canada which is a country provided for under the North American Free Trade Agreement (NAFTA). General Note 12, HTSUSA, incorporates Article 401 of the North American Free Trade Agreement (NAFTA) into the HTSUSA. Note 12(a) provides, in pertinent part:

(ii) Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules... and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate... . [Emphasis added]

Accordingly, the cape and scarf at issue will be eligible for the "Special" "CA" rate of duty provided they are NAFTA "originating" goods under General Note 12(b), HTSUSA, and they qualify to be marked as goods of Canada. 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; or

The subject merchandise qualifies for NAFTA treatment only if the provisions of General Note 12(b)(ii)(A) are met, that is, if the merchandise is transformed in the territory of Canada so that the non-originating material (the fabric formed in Country X) undergoes a change in tariff classification as described in subdivision (t).

For the cape, subdivision (t), Chapter 62, rule 5, states that:

A change to subheadings 6202.11 through 6202.13 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6002, provided that:

(A) the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties, and

(B) the visible lining fabric listed in chapter rule 1 for chapter 62 satisfies the tariff change requirements provided therein.

For the scarf, subdivision (t), Chapter 62, rule 38, states:

A change to headings 6213 through 6217 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6002, provided that the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.

When the fabric for the subject cape and scarf leaves Country X, it is classifiable as goods made from woven synthetic fabrics of Chapter 54 or headings 5508 through 5516. As fabrics of Chapter 54 and headings 5508 through 5516 are excepted by subdivision (t) for both headings 6202 and 6214, HTSUS, the non-originating material from Country X does not undergo the requisite change in tariff classification. Accordingly, the merchandise is not eligible for the NAFTA preference.

Additionally, it should be noted that even if the fabric had undergone the requisite change in tariff classification, the subject merchandise would not be eligible for the NAFTA preference. Subdivision (t) for both heading 6202, HTSUS, and 6214, HTSUS, requires not only a change in tariff classification but also that the good be cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties. Assembly has generally been interpreted to consist of the joining of components. Hemming is the only form of sewing that is performed at the assembly process of the subject merchandise. As hemming alone does not conform to the definition of "sewing" or otherwise "assembly", the manufacturing process undergone in Canada does not qualify as a sewing or assembly process.

Country of origin

On September 5, 1995, Customs published in the Federal Register (60 FR 46188) T.D. 95-69 which set forth final amendments to the Customs Regulations to implement the provisions of section 334 (b) of the Uruguay Round Agreements Act ("the Act"), Public Law 103-465, 108 Stat. 4809, hereinafter 19 U.S.C. 3592, regarding the country of origin of textile and apparel products. These final regulations apply to goods entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. The regulatory provisions in T.D. 95-69 that implement the basic origin principles of section 334(b) of the Act are contained in a new ?102.21 of the Customs Regulations (19 CFR 102.21).

The final rule for the rules for determining country of origin of a good for purposes of Annex 311 of the NAFTA was published by Customs on June 6, 1996, in the Federal Register (61 FR 28932). Therein it was stated, in pertinent part:

New ?102.21 was modeled on the approach taken in the interim Part 102 texts as published in T.D. 94-4 and thus incorporates a general statement of applicability (paragraph (a)), various definitions (paragraph (b)), general origin rules (paragraphs (c) and (d)), and specific tariff shift and/or other requirements (paragraph (e)) that apply under the second general rule. Of particular note for purposes of the present document is the definition of "textile or apparel product" in ?102.21(b)(5) which delineates the class of goods covered by the ?102.21 rules. That definition identifies those goods with reference to classification in the HTSUS and refers to Chapters 50 through 63 (that is, all of Section XI) of the HTSUS as well as to specific headings and 6-, 8- or 10-digit subheadings of the HTSUS that fall outside Section XI. Thus, if a good is classifiable in an HTSUS provision listed in ?102.21(b)(5), precedence must be given to the ?102.21 rules over any other regulatory provision with regard to that good, including any origin rules contained elsewhere in part 102.

Accordingly, as the subject merchandise is classified in headings 6202, HTSUS, and 6214, HTSUS, textile articles identified by rules of origin to determine the appropriate country of origin.

Section 102.21(c)(1) states that, "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced". As the subject merchandise was not wholly obtained or produced in a single country, Section 102.21(c)(1) is not applicable.

Section 102.21(c)(2) states that, "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."

Section 102.21(e) states that, "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":

6201-6208 If the good does not consist of two or more component parts, a change to heading 6201 through 6208 from any heading outside that group, except from heading 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5602 through 5603, 5801 through 5806, 5809 through 5811, 5903, 5906 through 5907, and 6217, and subheading 6307.90, and provided that the change is the result of a fabric- making process.

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.

Section 102.21(e) states that for heading 6202, HTSUS, fabrics of Chapter 54 and headings 5512 through 5516 are excepted by Section 102.21(c)(2). As the fabric for the subject cape does not undergo the requisite change in tariff classification, Section 102.21(c)(2) is inapplicable. In the case of the subject scarf, Section 102.21(e) states that for heading 6214, HTSUS, country of origin is conferred by the country in which the fabric comprising the good was formed by a fabric-making process. As such, for the scarf, the country of origin is Country X.

Section 102.21(c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

Section 102.21(b)(6) defines "wholly assembled" as:

The term "wholly assembled" when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets) will not affect the status of a good as "wholly assembled" in a single country, territory, or insular possession.

The subject cape is not knit and therefore provision (i) of Section 102.21(c)(3) is not applicable. Provision (ii) of Section 102.21(c)(3) is also not applicable because the subject cape does not meet the definition of "wholly assembled" which requires that the good consist of at least two components.

Section 102.21(c)(4) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred. In the case of the subject cape, the most important manufacturing process occurs at the time of the fabric making. Consequently, the country of origin of the subject cape is Country X.

HOLDING:

The subject cape, referenced style 520/260, is properly classified in subheading 6202.13.4020, HTSUSA, which provides for, women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: overcoats, carcoats, capes, cloaks and similar coats: of man-made fibers: other: other; other: women's. The applicable rate of duty is 29.1 percent ad valorem. The quota category is 635.

The subject scarf, referenced style 600/260, is properly classified in subheading 6214.30.0000, HTSUSA, which provides for, shawls, scarves, mufflers, mantillas, veils and the like: of synthetic fibers. The applicable rate of duty is 8.5 percent ad valorem. The quota category is 659.

The country of origin of the subject cape and scarf is Country X and should be marked accordingly to reflect that origin, such as "Made in Country X".

The subject merchandise is not eligible for the NAFTA preference and does not qualify for the tariff preference level provided for in Additional U.S. Note 3(a) to Section XI, HTSUS.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

Sincerely,

John Durant, Director

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See also:

• Tariff No.: 6202.13.40 - Women's or girls' overcoats, carcoats, capes, cloaks and similar articles, not knitted or crocheted, of man-made fibers, nesoi
• Tariff No.: 6209.20.50 - Babies' garments & clothing acc. nesoi, of cotton, incl. sunsuits & sim app, sets & parts of sets, & diapers, not knitted or crocheted
• Tariff No.: 6214.30.00 - Shawls, scarves, mufflers, mantillas, veils and the like, not knitted or crocheted, of synthetic fibers