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HQ 960955





November 5, 1997
CLA-2 RR:TC:TE 960955 jb

CATEGORY: CLASSIFICATION

TARIFF NO. : 6307.90.9989

Harry H. Reed
Tower Group International
205 West Service Road
Champlain, NY 12919

RE: Country of origin determination for sleeping bag shells; Section 102.21(c)(5); last country in which an important assembly or manufacturing process occurs; NAFTA

Dear Mr. Reed:

This is in reply to your letter dated April 10, 1997, on behalf of Canadian Recreation Products Inc., requesting a classification and country of origin determination for sleeping bag shells which will be imported into the United States. Samples were submitted to this office for examination.

FACTS:

The subject merchandise consists of two styles of shells used to manufacture sleeping bags. Neither styles have fillings and both are rectangular in shape. The first sample, referenced style Polyester TIC, is described by you as being composed of a 100 percent woven polyester fabric outer shell and a woven 65 percent polyester/ 35 percent cotton fabric lining. However, an examination by our New York Laboratory reveals the following composition: outer shell- plain woven fabric composed of 100 percent filament nylon; lining- knit fabric composed of 100 percent filament polyester. The manufacturing operations for this style are as follows:

Indonesia outer shell fabric is woven

China lining is knit

Canada the fabrics are cut, sewn and packaged

Referenced style Nylon TIC, is described by you as being composed of a 100 percent woven nylon fabric outer shell and a woven 65 percent polyester/ 35 percent cotton fabric lining. An examination by our New York Laboratory confirms this composition. The manufacturing operations for this style are as follows:

Indonesia outer shell fabric is woven

China lining is woven

Canada the fabrics are cut, sewn and packaged

ISSUE:

1. What is the tariff classification of the subject merchandise

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

3. Does the subject merchandise qualify for NAFTA treatment?

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). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's in the order of their appearance.

General Rule of Interpretation 2(a) states:

Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

Although heading 9404, HTSUS, provides for, among other things, sleeping bags, fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered, this heading does not have a provision for "parts" of a sleeping bag. Provided the sleeping bag shells, as imported, meet the requirements of heading 9404, HTSUS, and have the essential character of sleeping bags, as per GRI 2(a), the sleeping bag shells would not be precluded from classification in that heading. However, as we stated in HQ 084053, dated August 31, 1989, classifying similar merchandise:

...Where the heading specifies the type of merchandise, the product must, at the time of importation, meet those specifications even if otherwise incomplete. A sleeping bag shell without being stuffed or fitted with springs, even if it has the essential character of a sleeping bag, cannot be classified in a heading for articles of bedding fitted with springs or stuffed. GRI 2 cannot be introduced to modify what is required in the heading.

As such, the subject merchandise which is not stuffed or fitted with springs, cannot be classified in heading 9404, HTSUS.

Heading 6307, HTSUS, provides for, among other things, other made up articles. Note 7 to Section XI provides, in pertinent part:

For the purposes of this Section, the expression "made up"means:

(e) Assembled by sewing, gumming or otherwise (other than piece goods consisting of two or more lengths of identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded);

This is a "basket provision" for those articles not elsewhere more specifically enumerated in the tariff. Accordingly, the subject merchandise, comprised of two pieces of fabric sewn together on three sides, is properly classified in subheading 6307.90.9989, HTSUSA, which provides for, other made up articles, including dress patterns: other: other: other: other.

NAFTA Eligibility

The subject sleeping bag shells undergo processing operations in Canada which is a party to the North American Free Trade Agreement (NAFTA). General Note 12, Harmonized Tariff Schedule of the United States Annotated (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 sleeping bag shells 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

(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 materials (the outer shell and lining fabrics) undergo a change in tariff classification as described in subdivision (t).

The subject merchandise is classified in heading 6307, HTSUS. Subdivision (t), Chapter 63, rule 1, states that the tariff shift applies only for the component which determines the classification of the good. In the case of the subject sleeping bag shells, both the outer shell and lining fabrics are determinative of the classification. As such, for the sleeping bag shells, subdivision (t), Chapter 63, rule 4, states that:

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.

Both the foreign outer shell and lining fabrics are crucial to the identity of this merchandise. In the case of style "Polyester TIC", the outer shell and lining fabrics are classified in headings 5407 and 6002, HTSUS, respectively. In the case of style "Nylon TIC", the outer shell and lining fabrics are classified in headings 5407 and 5513, HTSUS, respectively. As fabrics of chapter 54, 55, and heading 6002, HTSUS, are excepted by rule 4, cited above, from meeting the tariff change to headings 6304 through 6310, HTSUS, the non-originating material 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"), codified at 19 U.S.C. 3592, Public Law 103-465, 108 Stat. 4809, 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 sleeping bag shells are classified in heading 6307.90, HTSUS, a textile article identified by ?102.21(b)(5), the ?102.21 rules take precedence over any other 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":

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.

As the fabric comprising the subject sleeping bag shells are formed in more than one country, the merchandise does not meet the terms of the tariff shift.

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.

As the subject merchandise is not knit and subheading 6307.90, HTSUS, is excepted by provision (ii), Section 102.21(c)(3) is inapplicable.

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 merchandise, the most important manufacturing process occurs at the time of the fabric-making. The fabric for the subject sleeping bag shells are sourced from more than one country. In the opinion of this office both the fabrics for the outer shell and lining are of equal importance. The outer shell fabric provides the user with protection from the elements, while the lining provides the user with a degree of comfort. Given the particular identity of this commodity, the finished sleeping bags could not perform their designated use without either the outer shell or the lining. As no one fabric is more important than the other, Section 102.21(c)(4) cannot readily be used to make a determination.

Section 102.21(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 merchandise Canada is the last country in which an important assembly and manufacturing process occurs.

HOLDING:

The subject merchandise, referenced styles Polyester TIC and Nylon TIC, are properly classified in subheading 6307.90.9989, HTSUSA, which provides for, other made up articles, including dress patterns: other: other: other: other. The applicable rate of duty is 7 percent ad valorem

The subject sleeping bag shells are not eligible for the NAFTA preference.

The country of origin of the subject sleeping bag shells is Canada.

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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