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HQ 960524




October 22, 1997
CLA-2 RR:TC:TE 960524 jb

CATEGORY: CLASSIFICATION

TARIFF NO.: 6302.32.2060

Thomas Penksa
PBB Group
434 Delaware Ave.
Buffalo, NY 14202

RE: Classification and country of origin determination for a mattress and pillow cover; 19 CFR ?102.21(c)(5); last country in which an important assembly or manufacturing process occurs; NAFTA eligibility; Article 509

Dear Mr. Penksa:

This is in reply to your letter dated March 18, 1997, supplemented by additional information on April 10, 1997, on behalf of your client, Bay Street Manufacturing, requesting a classification and country of origin determination for mattress and pillow covers which will be imported into the United States. Samples were submitted to this office for examination.

FACTS:

The subject merchandise consists of a waterproof mattress cover and a pillow cover which are stated to be specifically designed to help asthma and allergy sufferers by forming a barrier between them and the dust mites, bacteria and other allergens which embed themselves in mattresses and pillows. Both the mattress and pillow cover consist of an outer surface made of 50 percent polyester and 50 percent cotton woven fabric, a thin polyester batting which is quilted to the outer surface, and an inner surface made of a knit polyester fabric coated or laminated with vinyl. The inner layer, which is attached to the outer quilted layer only at the side seams, creates a solid barrier between the sleeper and the bedding by preventing the penetration of mites, allergens and certain liquids which might be spilled on the surface of the covers. The pillow cover features a zippered opening along one end to allow the insertion of the pillow. The mattress cover is attached to the mattress by a fabric skirt (made of the same fabric as the outer surface) with elasticized edges.

The manufacturing operations are as follows:

Pakistan
50 percent polyester/50 percent cotton woven fabric for the outer surface is formed

United States polyester batting is made knit portion of the coated fabric for the inner surface is formed

Canada knit portion of the coated fabric for the inner surface is coated or laminated fabrics are cut, sewn and assembled into the completed articles

ISSUE:

1. What is the proper classification 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 submitted merchandise?

4. Can the merchandise be entered with a certificate of eligibility under the NAFTA tariff preferential level (TPL) rate of duty?

LAW AND ANALYSIS:

Classification

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is in accordance with the General Rules of Interpretation. 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 6302, HTSUS, provides for, among other things, bed linen. The Explanatory Notes to the Harmonized Commodity Description and Coding System (EN) to heading 6302, HTSUS, in enumerating the types of articles classified therein, state:

These articles are usually made of cotton or flax, but sometimes also of hemp, ramie or man-made fibres, etc.; they are normally of a kind suitable for laundering. They include:

(1) Bed linen, e.g., sheets, pillowcases, bolster cases, eiderdown cases and mattress covers.

Accordingly, the subject merchandise is properly classified in heading 6302, HTSUS.

NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) ELIGIBILITY

The subject merchandise 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 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 merchandise 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 undergoes a change in tariff classification as described in subdivision (t).

The mattress cover and pillow cover are classified in subheading 6302.32.2060, HTSUSA. For heading 6302, HTSUS, subdivision (t), Chapter 63, rule 1, states that:

A change to headings 6301 through 6302 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 of more of the NAFTA parties.

In the case of the subject merchandise the 50 percent polyester/50 percent cotton fabric for the outer surface is classified in heading 5513, HTSUS. As the fabric is formed in Pakistan, it is considered a non-originating material. As chapter 55, HTSUS, is excepted by rule 1 to chapter 63, the fabric from Pakistan does not undergo the requisite change in tariff classification. Accordingly, the merchandise is not eligible for the NAFTA preference.

As per Additional U.S. Note 4(a) to Section XI, HTSUS, goods of chapter 63, HTSUS, that are woven or knit in the territory of a NAFTA party from yarn produced or obtained outside the territory of one of the NAFTA parties, or knit in the territory of a NAFTA party from yarn spun in the territory of a NAFTA party from fiber produced or obtained outside the territory of one of the NAFTA parties, are eligible for the rate of duty in the "Special" column of rates of duty column 1 followed by the symbol "CA" in parentheses. In the case of the subject merchandise, the fabric is not woven or knit in the territory of a NAFTA party from yarn produced outside the NAFTA parties or knit in the NAFTA territory from yarn spun in the NAFTA territory from fiber produced outside the NAFTA territory. Accordingly, the covers do not meet the terms of Additional U.S. Note 4(a) to Section XI and thus do not qualify for the NAFTA tariff preferential level rate of duty.

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 heading 6302, HTSUS, textile articles identified by ?102.21(b)(5), the determine the appropriate country of origin.

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":

6301-6306 The country of origin of a good classifiable under heading 6301 through 6306 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

As the subject merchandise is comprised of fabric sourced in more than one country, Section 102.21(c)(2) is not applicable to this merchandise.

Paragraph (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.

As this merchandise is not knit to shape and heading 6302, HTSUS, is excepted from provision (ii), paragraph (c)(3) is inapplicable.

Paragraph (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 merchandise the most important manufacturing operation occurs at the time of fabric formation. As the fabric formation for this merchandise occurs in more than one country, and no one fabric is more important than the other, paragraph (c)(4) is not applicable to this merchandise.

Paragraph (c)(5) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory or insular possession in which an important assembly or manufacturing process occurred". Accordingly, in the case of the subject mattress cover and pillow cover, the country of origin is conferred in the last country in which an important assembly or manufacturing process occurred, that is, Canada.

HOLDING:

The subject merchandise, mattress cover and pillow cover, are classified in subheading 6302.32.2060, HTSUSA, which provides for, bed linen, table linen, toilet linen and kitchen linen: other bed linen: of man-made fibers: other: other: other. The applicable rate of duty is 12.5 percent ad valorem and the quota category is 666.

The country of origin of the subject merchandise is Canada.

The subject merchandise does not qualify for preferential duty treatment under the NAFTA. The Tariff Preference Levels do not apply to this merchandise.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories applicable to textile merchandise, you should contact your local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements.

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
Commercial Rulings Division

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