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NY D83542




October 29, 1998

CLA-2-RR:NC:TA:349 D83542

CATEGORY: CLASSIFICATION

Mr. Mark S. Greenberg
American Shipping Company, Inc.
140 Sylvan Avenue
Englewood Cliffs, NJ 07632

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for infant's car seat pads; 19 CFR 102.21(c)(2); tariff shift; 19 CFR 12.130(c); Article 509

Dear Mr. Greenberg:

This is in reply to your letter dated October 1, 1998, on behalf of Evenflo Corporation, requesting a classification, status under the NAFTA and country of origin determination for infant's car seat pads which will be imported into the United States.

FACTS:

The subject merchandise consists of infant's car seat pads which may also be referred to as a car seat cushion covers. These pads or cushion covers fit over the plastic car seat providing cushioning and comfort to an infant. You have submitted two types of seat pads, styles 83404634 and 83406058, which are representative of the different styles that will be manufactured. All of the various components that are used to make the different styles of seat pads are wholly produced in the United States. Both submitted items are contoured to fit an infant's car seat and contain several openings through which seat restraints will protrude. The cushion covers will be attached to the seats by elastic loops, plastic clips, elasticized edges or plastic fasteners. Style 83406058 consists of a woven, 51 percent polyester and 49 percent cotton shell fabric, a nonwoven backing and it is filled with a layer of polyester batting. Style 83404634 is made from a man-made fiber flocked fabric, laminated to a polyurethane foam and backed with a knit fabric. The manufacturing operations for the infant's car seat pads are as follows:

UNITED STATES
-51 polyester/49 cotton fabric and binding fabrics are woven;
-polyurethane foam and polyester batting is formed; -man-made fiber flocked fabric and backing fabrics are formed;
-various plastic components, fasteners, elastic, labels are made;
-rolls of fabrics and all components are shipped to Mexico.

MEXICO
-fabrics, batting, etc. are cut to size and shape; -the various components are assembled into a finished car seat pad.

ISSUE:

What are the classification, eligibility under NAFTA and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for the infant's car seat pads will be 9404.90.2000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: pillows, cushions and similar furnishings: other. The general rate of duty will be 6 percent ad valorem.

NAFTA ELIGIBILITY:

The subject car seat pad undergoes processing operations in the United States and Mexico which are countries 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:

(ii) Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of Mexico 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 "MX" in parentheses, are eligible for such duty rate... .

Accordingly, the car seat pads at issue will be eligible for the "Special" "MX" rate of duty provided they are NAFTA "originating" goods under General Note 12(b), HTSUSA, and they qualify to be marked as goods of Mexico. 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

As the subject car seat pads are constructed in Mexico of materials wholly obtained or produced in the territory of the United States (a NAFTA signatory), it meets the criteria set out in General Note 12(b)(i). Accordingly, the car seat pads qualify as a good originating in the territory of a NAFTA party. Assuming that the car seat pads qualify to be marked as a good of Mexico, they are entitled to the special "MX" duty rate, provided that a Certificate of Origin is completed and submitted in accordance with 19 CFR 181.11.

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.

We note that as written, the listed headings and subheadings under 19 CFR 102.21(b)(5) fail to include subheading 9404.90.20, HTSUS, for purposes of the section 102.21 rules of origin. The omission of that subheading was recently addressed in Headquarters Ruling Letter (HQ) 962122 dated October 1, 1998 which stated that: "...it is Customs position that the omission of subheading 9404.90.20, HTSUS, was an oversight. In that respect we direct your attention to the statute pertaining to the rules of origin, 19 U.S.C. section 3592, which states explicitly under (b)(2), Special rules, that:

(A) the origin of a good that is classified under one of the following HTS headings or subheadings shall be determined under subparagraph (A),(B), or (C) of paragraph (1), as appropriate: 5609, 5807, 5811, 6209.20.5040, 6213, 6214, 6301, 6302, 6303, 6304, 6305, 6306, 6307.10, 6307.90, 6308, or 9404.90; and (Emphasis added)

As the statute does not break out subheading 9404.90, HTSUS, it is Customs position that the statute takes precedence over the regulation. That is to say, Customs cannot exclude by regulation what is specifically included by statute. Accordingly, in determining the origin of the subject cushions, the 102.21 rules of origin are applicable."

Paragraph (c)(1) of section 102.21 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 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 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

9404.90 The country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

As the fabrics comprising the car seat pads were formed by a fabric-making process in a single country, that is, the United States, as per the terms of the tariff shift requirement, country of origin is conferred in the United States.

However, there is an exception to products from the United States that are sent abroad for processing. Section 12.130(c), Customs Regulations, provides that any product of the United States which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article.

Section 12.130 which remains in effect was originally intended to be used to determine the country of origin of textiles and textile products for quota/visa requirements. In T.D. 90-17, issued February 23, 1990, Customs announced a change in practice and position. This change resulted in Customs using Section 12.130 for quota, duty, and marking purposes when making country of origin determinations for textile goods. Therefore, in accordance with T.D. 90-17 and Section 12.130(c), the country of origin of the subject comforter set is Mexico, for quota, marking, and duty purposes.

HOLDING:

The subject infant's car seat pads are classified in subheading 9404.90.2000, HTSUSA, which provides for other pillows, cushions and similar furnishings.

The country of origin of the infant's car seat pads is Mexico. They will be entitled to the NAFTA "MX" special duty rate of Free upon compliance with all applicable laws, regulations and agreements.

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 section 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. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted.

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 John Hansen at 212-466-5854.

Sincerely,

Robert B. Swierupski
Director,

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