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HQ 959672




September 20, 1996
CLA-2 RR:TC:TE 959672 jb

CATEGORY: CLASSIFICATION

Brian Wavra
Rainfair, Inc.
Box 1647
Racine, Wis 53401

RE: Country of origin determination for bib apron and sleeve protector; 19 CFR ?102.21(c)(2); tariff shift

Dear Mr. Wavra:

This is in reply to your letter, dated July 15, 1996, requesting a country of origin determination for a bib apron and sleeve protector which will be imported into the United States. Samples were submitted to this office for examination and will be returned under separate cover.

FACTS:

The subject merchandise consists of a bib apron and sleeve protector made of 100 percent denim cotton fabric. The bib apron measures approximately 36 inches in length and 26 inches in width at the waist, tapers from the waist to the chest and is tied at the neck by fabric straps which can be affixed to metal grommets on each side at the top of the bib. The apron also features one pocket, chest high and another pocket at the waist. Fabric straps can also be affixed to metal grommets at each side at the waist, allowing the apron to be tied at the waist. This garment provides coverage from the chest to below the knees.

The sleeve protector features elasticized open ends at both ends and when worn, provides coverage from the wrist to the elbow. Our New York office issued to you New York Ruling Letter (NY) A85787, dated August 8, 1996, discussing the proper tariff classification for this merchandise.

The manufacturing operations are as follows:

UNITED STATES

- fabric is formed.

MEXICO or a participating country of the CARIBBEAN BASIN ECONOMIC RECOVERY ACT (CBI)

- cutting of the component pieces (for the apron, cutting to shape the apron shell and pockets; for the sleeve protector, cutting to shape the sleeve shell and elastic); - sewing;
- assembly.

ISSUE:

1. If assembly occurs in Mexico, is the subject merchandise eligible for duty-free treatment under the North American Free Trade Agreement (NAFTA)?

2. If assembly occurs in the CBI country, is the subject merchandise eligible for duty-free treatment as per U.S. Note 2(b), Subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States (HTSUS)?

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

LAW AND ANALYSIS:

NAFTA eligibility

In the situation where the subject bib apron and sleeve protector undergo processing operations in Mexico, Mexico is a party to the North American Free Trade Agreement (NAFTA). General Note 12, HTSUS, incorporates Article 401 of the 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 Mexico 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 "MX" in parentheses, are eligible for such duty rate... . [Emphasis added]

Accordingly, the bib apron and sleeve protector at issue will be eligible for the "Special" "MX" rate of duty provided they are NAFTA originating goods under General Note 12(b), HTSUSA, and they qualify to be marked as goods of Mexico. 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

As the subject bib apron and sleeve protector are constructed in Mexico of materials wholly obtained or produced in the United States, they meet the criteria set out in General Note 12(b)(i). Accordingly, the bib apron and sleeve protector qualify as goods originating in the territory of a NAFTA party. Assuming that the bib apron and sleeve protector qualify to be marked as goods of Mexico, they are entitled to the special "MX" duty rate, provided that a Certificate of Origin is completed and submitted in accordance with 19 CFR 181.11.

Duty Free Treatment for the CBI country pursuant to U.S. Note 2, Subchapter 2, Chapter 98, HTSUS

Section 222 of the Customs and Trade Act of 1990 (Public Law 101-382) amended U.S. Note 2, Subchapter II, Chapter 98, HTSUS, to provide for the duty-free treatment of articles (other than textile and apparel articles, and petroleum and petroleum products) which are assembled or processed in a Caribbean Basin Economic Recovery Act (CBERA) beneficiary country (BC) wholly of fabricated components or ingredients (except water) of U.S. origin.
This amendment was effective with respect to goods entered on or after October 1, 1990.

Note 2(b) provides as follows:

(b) No article (except a textile article, apparel article, or petroleum, or any product derived from petroleum, provided for in heading 2709 or 2710) may be treated as a foreign article, or as subject to duty, if --

(i) the article is--

(A) assembled or processed in whole of fabricated components that are a product of the
United States, or

(B) processed in whole of ingredients (other than water) that are a product of the United
States, in a beneficiary country; and

(ii) neither the fabricated components, materials or ingredients, after exportation from the United States, nor the article itself, before importation into the United States, enters the commerce of any foreign country other than a beneficiary country.

As stated in this paragraph, the term "beneficiary country" means a country listed in General Note 3(c)(v)(A).

Although Note 2(b)(i)(A) and (B) are separated by the word "or", it is our opinion that Congress did not intend to preclude free treatment under this provision to an article which is created in a BC both by assembling and processing U.S. fabricated components and by processing U.S. ingredients.

Note 2(b) specifies four categories of products which are excluded from duty-free treatment under this provision: textile articles; apparel articles; petroleum; and certain products derived from petroleum. In this regard, for purposes of Note 2(b), Customs has held that "textile" and "apparel" articles are classified in provisions of the HTSUS which include a textile category number, i.e., are subject to textile agreements. See T.D. 91-88, dated October 18, 1991.

The subject bib apron and sleeve protector are classifiable in subheadings 6211.42.0081, and 6217.10.9010, HTSUSA, respectively. These provisions include a textile category number, that is, 359 for both garments, and therefore these articles are considered textile or apparel articles for purposes of Note 2(b). Accordingly, the subject bib apron and sleeve protector do not qualify for duty-free treatment.

Country of origin

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

Paragraph (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 is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (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".

Paragraph (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:"

6210-6212 If the good consists of two or more component parts, a change to an assembled good of heading 6210 through 6212 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

6215-6217 If the good consists of two or more component parts, a change to an assembled good of heading 6215 through 6217 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession.

The subject bib apron and sleeve protector are classified in headings 6211 and 6217, HTSUS, respectively. As the subject merchandise consists of multiple component parts (for the apron, the apron shell and pockets; for the sleeve protector, the sleeve shell and elastic) which are assembled in a single country into the finished goods, the country of origin of the subject bib apron and sleeve protector is the single country where that assembly occurs, that is, Mexico or the CBI country.

HOLDING:

The country of origin of the subject bib apron and sleeve protector is Mexico or the CBI country.

In the case where assembly occurs in Mexico, the bib apron is eligible for the NAFTA "MX" special duty rate of "Free", and the sleeve protector is eligible for the NAFTA "MX" special duty rate of 7.8 percent ad valorem.

In the case where assembly occurs in the CBI country, the merchandise is not eligible for duty-free treatment.

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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