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HQ 960016





April 1, 1997

CLA-2 RR:TC:TE 960016 CAB

CATEORY: Classification

Ms. Kathy Young
Panalpina, Inc.
310 Interstate Blvd.
Greenville, SC 29615

RE: Country of origin of certain pile fabric; Section

Dear Ms. Young:

This is in response to your inquiry of November 20, 1996, requesting a country of origin determination for certain knitted pile fabric used to make automobile carpets and coverings. Upon a request from Customs, a fabric sample was submitted for examination in early February 1997, in addition to supplemental information concerning the processing operations.

FACTS:

There are two manufacturing operations at issue. In the first manufacturing operation, polypropylene fibers will be purchased from Amoco. Amoco produces the polypropylene fibers from pellets sourced in the United States. The fibers will be used in the production of polypropylene yarn. Polyester yarn will also be produced in Austria. The polyester yarn and polypropylene yarn will be knitted together into fabric with circular knitting machines in Austria. The fabric will be used to produce carpets and coverings for speakers and doors. The production of the carpets and coverings will occur in Austria and the finished goods will be exported to the United States for sale.

In the second manufacturing operation, Amoco will produce polypropylene fibers from pellets sourced in the United States. The fibers will then be exported to Austria to be used in the manufacturing of sliver. The sliver is then sent to Hungary for further processing. Yarn will be exported from Germany. In Hungary, the sliver and yarn will be combined to produce fabric. The fabric will be exported to the United and used in automobiles.

ISSUE:

What is the country of origin of the subject merchandise? LAW AND ANALYSIS:

Pursuant to Section 334 of the Uruguay Round Agreements Act (codified at 19 USC Section 3592), new rules of origin were effective for textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996.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 is determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21.

Section 102.21(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. As the subject merchandise has not been wholly obtained or produced in a single country, this section is inapplicable.

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.

Section 102.21(e) provides, in pertinent part:

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:

5701-5705 A change to heading 5701 through 5705 from any other chapter.

Heading 5705 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is the provision for other carpets and other textile floor coverings, whether or not made up. The subject textile carpet and coverings are classifiable under Heading 5705, HTSUSA.

In this instance, pursuant to Sections 102.21(c)(2) and 102.21(e), origin is conferred in the country where the change to heading 5705 occurred. In the first manufacturing scenario, the change to heading 5705 occurred due to yarn being knitted into fabric which results in textile carpets and coverings being produced in Austria. Consequently, the country of origin of the carpets and coverings in the first manufacturing scenario is Austria. In the second manufacturing scenario, the change to heading 5705 occurred due to sliver and yarn being knitted into automobile carpet in Hungary. Consequently, the country of origin of the automobile carpets in the second manufacturing scenario is Hungary.

HOLDING:

In Scenario I, the country of origin of the carpets and coverings is Austria. In Scenario II, the country of origin of the carpets and coverings at issue is Hungary.

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
Tariff Classification Appeals
Division

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