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HQ 959882




November 1, 1996
CLA-2 RR:TC:TE 959882 jb

CATEGORY: CLASSIFICATION

Joseph Giumentaro
PBB Group
434 Delaware Ave.
Buffalo, NY 14202

RE: Country of origin determination for a drain net; Section 102.21(c)(2); tariff shift; Article 509; not eligible for NAFTA

Dear Mr. Giumentaro:

This is in reply to your letter dated September 17, 1996, on behalf of your client, Ropak Canada Inc., requesting classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) and a country of origin determination for a drain net which will be imported into the United States. Our New York office issued to you A87786, dated October 17, 1996, addressing the proper classification of this merchandise in subheading 6307.90.9989, HTSUSA. Accordingly, this letter will only address the proper country of origin determination for the subject merchandise. A sample was submitted to this office for examination.

FACTS:

The subject merchandise is made of a 100 percent polypropylene warp knit open work fabric and features a « inch braided elastic band which has been assembled into the knit fabric by way of a hem sewn around the periphery of a cut to shape piece of the knitted fabric. This creates a net in the shape of a half sphere with an opening measuring 12 inches in diameter.

You state that this merchandise is used to drain off the brine from a brine and roe mixture, trapping the roe for subsequent packaging and shipment.

The manufacturing operations for the subject merchandise are as follows:

JAPAN

- polypropylene knit fabric is formed.

TAIWAN

- elastic braid is formed by braiding a textile yarn around rubber thread.

* You state that the elastic braid weighs 13.6 percent of the overall product weight and thus does not meet the terms of De Minimis as per Section 102.13.

CANADA

- fabric is cut to shape;
- fabric covered elastic braid is sewn along the periphery of the polypropylene knit fabric.

ISSUE:

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

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

LAW AND ANALYSIS:

NAFTA Eligibility

The subject drain net undergoes 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:

(i) Goods that originate in the territory of a NAFTA party under the terms of 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 drain net at issue will be eligible for the "Special" "CA" rate of duty provided it is a NAFTA "originating" good under General Note 12(b), HTSUSA, and it qualifies to be marked as a good 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 polypropylene fabric formed in Japan and the fabric covered elastic band formed in Taiwan) undergo a change in tariff classification as described in subdivision (t).

Subdivision (t), Chapter 63, chapter rule 1, states that:

For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good.

For the subject drain net, subdivision (t), Chapter 63, rule 4, states:

A change to headings 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6002, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.

The component which determines the tariff classification of the subject drain net is the warp knit fabric from Japan, classifiable in heading 6002, HTSUS. As the non-originating material, that is, the warp knit fabric of heading 6002, HTSUS, is excepted by subdivision (t), Chapter 63, rule 4, it does not undergo the requisite change in tariff classification. Accordingly, the merchandise is not eligible for the NAFTA preference.

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, codified at 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 heading 6307, HTSUS, a textile article identified by ?102.21(b)(5), the 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 is not wholly obtained or produced in a single country, territory, or insular possession, paragraph (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":

6307.90 The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

The subject merchandise is classified in subheading 6307.90.9989, HTSUSA. As the fabric comprising the submitted drain net is made up of fabric from Japan (warp knit fabric) and flat braid from Taiwan, the terms of the tariff shift are met. Accordingly, the country of origin of the subject drain net is Japan.

HOLDING:

The country of origin of the subject drain net is Japan.

The subject drain net is not eligible for the NAFTA preference.

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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