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NY C81627




May 28, 1998

CLA-2-RR:NC:TA:350 C81627

CATEGORY: CLASSIFICATION

Mr. Marc Shannon
Starber Fritz Inc.
410 St. Nicolas
Bureau 300
Montreal, Canada H2Y 2P5

RE: Classification, country of origin and NAFTA status for two multilayered fabrics to be imported into the United States, from Canada and further processed in the U.S.. 19 CFR ?12.130(c), ?102.21.

Dear Mr. Shannon:

This is in reply to your letter dated October 15, 1997, on behalf of Bennett Fleet, Inc. and subsequent correspondence, in essence asking a two part question. One part is requesting a classification, country of origin and NAFTA status for two multilayered fabrics to be imported from Canada and further processed in the U.S. The second, the status of this material, sent to the Dominican Republic to be cut and sewn into safety boot liners then shipped back to the United States for finishing.

FACTS:

You submitted two different sample swatches of material ( 707-124 and 707-126 ) representing their final processed state as piece goods. You provided the following information for both materials.

Style 707-124:

A needleloomed felt material as piece goods, of U.S. origin (presumably NAFTA originating), is shipped to Canada. This felt, referred to as 170 grams "Ultrafibre" is stated to be composed of 82% polyester man-made fiber and 18% aluminum. Regarding the aluminum, it is not clear from your letter or sample in what form or state the aluminum is present in the needle felt, i.e., in powder, thin filaments or is of metalized man-made fibers. It is not in the form of foil nor is it apparent from visual examination. Accordingly, the "ultrafibre" is still considered a needlefelt of man-made fibers classifiable under HTS subheading 5602.10.

The referred to "peat paper" (Mostech - Absorbec) is a thin layer of processed peat of Canadian manufacture (presumably NAFTA originating) classifiable under HTS subheading 6815.20 as articles of peat.

Two layers of the felt with a middle layer of the peat are needled together forming a three plied needle felt material

A brushed polyester knit fabric (HTS heading 6002) of Canadian manufacture (presumably NAFTA originating) is laminated (by glue) to, what will be, the top surface of the needle felt. The glue is not considered significant in the overall classification of the product.

This four layered material is then shipped to the U.S. where a thin ( approximately 0.3 mm) layer of U.S. made rayon spunbonded nonwoven fabric (HTS 5603) is laminated to the bottom of this plied material. The overall thickness of the final material is approximately 7 mm.

The following charts, giving component weight percentages, outline the above manufacturing steps.

Style 707-124

Layer

Composition
Origin
% by weight

1-green knit
100% polyester, knit
Canada
12

2- 170 grs
Ultrafibre
82% polyester,
18% aluminum, needled
USA
26

3- Mostech
(Absorbec)
100% peat paper
Canada
27

4- 170 grs
Ultrafibre
82% polyester,
18% aluminum, needled
USA
26

Processing in Canada: 1) Layers 2, 3 and 4 are needled together.
2) Layer 1 is laminated to the combined layers 2, 3 and 4 using an adhesive of German origin.

Layer
Composition
Origin
Percentage by weight of whole

5-Maslan
100% spunbonded rayon
USA
5

Processing in the U.S.A: 1) Layer 5 is laminated to the imported fabric (layers 1-4) using an adhesive of unspecified origin.

The adhesive represents a total of 4% by weight of the finished 5-layer fabric.

This four-layered material, produced in Canada (prior to adding the 5th layer in the U.S.), is considered to be of a needleloom felt construction because of the amount and function of the Ultrafibre layers compared to the peat and knit layers. As a product unto itself it is classifiable under 5602.10 as a needleloom felt, whether or not impregnated, coated, covered or laminated, the essential character is imparted by the felt.

The applicable subheading for style 707-124, as imported from Canada (prior to adding the 5th layer in the U.S.), is 5602.10.1000, Harmonized Tariff Schedule of the United States, which provides for needleloom felt and stitch-bonded fiber fabrics, . . ., of other than wool or fine animal hair. This fabric being produced entirely in the territory of NAFTA from originating materials meets the requirements of HTSUSA General Note 12 (b) (iii), and will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

Since style 707-124 involves U.S made goods exported, advanced in value and returned. The country of origin of such a transaction is governed by CR ? 12.130 (c) (1) which reads:

?12.130 Textiles and textile products country of origin.

(c) Articles exported for processing and returned -- (1) Applicability to U.S. articles sent abroad. Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, provides that any product of the U.S. which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article for the purposes of the Tariff Act of 1930, as amended. In order to have a single definition of the term ``product of'' and, therefore, a single country of origin for a textile or textile product, notwithstanding paragraph (b), merchandise which falls within the purview of Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, may not, upon its return to the U.S., be considered a product of the U.S.

Consequently, this returned good ( the four layer 707-124 prior to adding the 5th layer the U.S. ) is considered a product of Canada.

Style 707-126:

A 100% polyester man-made fiber knit mesh fabric (black) and a 100% polyurethane plastic foam material are laminated together in Canada. Both portions are of Canadian origin (presumably NAFTA originating). This material is then imported into the United States. The laminate measures about 6.5 mm in thickness.

The specifics of the second sample (707-126), of Canadian origin, are given in the charts below:

Layer
Composition
Origin
% by weight

1-black drop stitch knit mesh.
100% polyester, knit
Canada
42

2-foam
100% polyurethane,
"needled"
Canada
32

Processing in Canada: 1) Layers 1 and 2 are laminated together using adhesive of German origin.

You provided the following technical information which translates into the following weight percentages for the good of Canadian manufacture:
100% polyester black knit layer: 57%
100% polyurethane foam layer: 43%
Total: 100%

The fancy knit mesh (not of plain knit construction) laminated with the plastic foam is considered classifiable as a textile material laminated with plastic under HTS subheading 5903.20.25, due to the nature of the knit and its function as a sock liner. The foam layer shows no signs of any needling process.

This Canadian produced material is shipped to the U.S. where it is similarly processed, as style 707-124, by laminating the under surface with the thin (0.3 mm), light weight U.S. produced nonwoven material (Maslan).

Layer
Composition
Origin
% by weight

3- Maslan
100% spun bonded rayon
USA

Processing in the U.S.A: 1) Layer 3 is laminated to the imported fabric (layers 1-4) using an adhesive of unspecified origin.

The applicable subheading for style 707-126, as imported from Canada ( prior to adding the 3rd layer in the U.S. ), is 5903.20.2500, HTS, which provides for textile fabrics impregnated, coated, covered or laminated with plastics, with polyurethane, of man-made fibers, not over 70 percent by weight of rubber or plastics.

This fabric being produced entirely in the territory of NAFTA from originating materials meets the requirements of HTUSA General Note 12 (b) (iii), and will, therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations and agreements. With respect to style 707-126, as this material is wholly obtained or produced in a single country, i.e., Canada, Canada is the country of origin (CR ? 102.21 (c) (1),noted).

Style 707-124, as a four layer good entering the U.S. ( prior to adding the fifth layer ), is considered classifiable as a needleloom felt under subheading 5602.10.1000. Style 707-126, as a two layer good entering the U.S. ( prior to adding the third layer ), is classifiable as a knit fabric laminated with polyurathane plastic under subheading 5903.20.2500.

After entry, both styles are laminated, on the under surface, with the same weight and thickness spunbonded nonwoven (Maslan) rayon fabric. This material, which appears to act as nothing more than a cover stock, is very thin, light weight, and does not appear to change the essential character of the respective materials or alter their respective classifications. We do not view this nonwoven to be of consequence or significance in determining the classification of the materials in their finished state. With this in mind, the following question is now addressed.

ISSUE:

What is the country of origin of the subject goods after further processing in the U.S.?

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

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."

Since both styles are further processed in the U.S. paragraph (c) (1) is inapplicable since the material is not produced in a single country or territory, etc. 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 of the foreign materials 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), in pertinent part, states that "the following rules shall apply for the purposes of determining the country of origin of a textile or apparel product under paragraph (c) (2) of this section:"

HTSUS Tariff shift and/or other requirements

5602 - 5603 A change to heading 5602 through heading 5603 from any heading outside that group, provided that the change is the result of a fabric-making process.

5901 - 5903 A change to heading 5901 through 5903 from any other heading, including a heading within that group, except from heading 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5803,
5806, 5808, and 6002, and provided that the change is the result of a fabric-making process.

These materials do not under go a tariff shift or meet the definition of fabric making process as outlined in CFR 102.21 (b) (2), which states "a fabric making process is any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarns, twine, cordage, rope, or fabric strips and results in a textile fabric."

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 goods are neither knit, nor wholly assembled in a single country, Section 102.21 (c)(3) is inapplicable.

Section 102.21 (c) (4) states, "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, we consider that the processing, of both the goods, performed in Canada constitutes the most important assembly or manufacturing processes. Accordingly, the country of origin of both styles is conferred in Canada.

HOLDING:

The goods, imported from Canada, are considered classifiable under HTS subheadings 5602.10.1000 as laminated needleloom felt and 5903.20.2500 as knit fabric of man-made fiber, laminated to plastic, under 70 percent by weight plastic for styles 707-124 and 707-126, respectively. They will be entitled to the NAFTA "CA" special duty rate of FREE, for both styles, upon compliance with all applicable laws, regulations and agreements.

And, again, we reiterate, based on 19 CFR ? 102.21 (c) (4) the goods, after being laminated in the U.S. with the nonwoven material are still considered to be of Canadian origin.

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 ? 181.100(a)(2). This sections states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 181.100(a)(2), 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 and the NAFTA eligibility. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted.

Further, in regards to your inquiry regarding the country of origin of the product in its condition after having been cut and sewn in the Dominican Republic, a more detailed description of what the finished product will be is needed in order to provide a determination regarding the country of origin of the finished product. Your statement that "after completion in the U.S. the fabric will be exported, still in rolls, to the Dominican Republic where it will be cut and sewn to form the interior boot of safety boots" is not sufficient to identify the finished product. A representative sample of the finished product will be required to render such a determination.

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling contact National Import Specialist George Barth at 212-466-5884. Any question regarding the manufacture of the safety boots please contact National Import Specialist Richard Foley at 212-466-5890. S

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director

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