NY D89792 - Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for a pillow cover and a pillow shell; 19 CFR 102.21(c)(2); tariff shift; Article 509 - United States International Trade Commision Rulings

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May 6, 1999

CLA?2-RR:NC:TA:349 D89792

CATEGORY: CLASSIFICATION

Mr. Arnold Damsky
Dynamite Enterprises, Inc.
3535 Hiawatha Ave., Unit B112
Coconut Grove, FL 33133

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for a pillow cover and a pillow shell; 19 CFR 102.21(c)(2); tariff shift; Article 509

Dear Mr. Damsky:

This is in reply to your letter dated April 5, 1999, received by this office on April 13, 1999, requesting a classification, status under the NAFTA and country of origin determination for a pillow cover and pillow shell which will be imported into the United States.

FACTS:

The subject merchandise consists of a pillow cover and a pillow shell made from 100 percent polyester jacquard woven fabrics. The submitted pillow shell sample measures approximately 21 inches square. The front and back panels of the shell are sewn together along their edges leaving a 15 inch unfinished opening on one side. The pillow cover will be identical to the shell except that a 15 inch zipper will be added in place of the unfinished opening. After importation, both items will be filled with pillow forms and then either sewn closed or zippered closed. The manufacturing operations for the pillow cover and pillow shell are as follows:

Korea:
-The fabric is woven and finished.
-The 44 inch wide by 60 yard long fabric rolls are shipped to Mexico.

Mexico:
-The fabric is cut into 22 inch square panels. -The edges of the panels are over stitched to prevent unraveling. -Two panel are sewn along their edges leaving a 15 inch opening on one side. -A 15 inch zipper is sewn to those shells that are to be converted into covers. -The covers and shells are shipped to the United States.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the pillow cover will be 6304.93.0000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for other furnishing articles, excluding those of heading 9404: other: not knitted or crocheted, of synthetic fibers. The rate of duty will be 10 percent ad valorem. The pillow cover falls within textile category designation 666.

The applicable subheading for the pillow shell will be 6307.90.9989, HTSUSA, which provides for other made up articles, including dress patterns: other: other: other. The rate of duty will be 7 percent ad valorem. This subheading is not assigned a textile category designation.

The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the U.S. Customs Service Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web Site at WWW.CUSTOMS.USTREAS.GOV. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment.

NAFTA ELIGIBILITY:

The subject pillow cover and pillow shell undergo processing operations in Mexico, which is a country 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 blanket at issue will be eligible for the "Special" "MX" 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 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

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 Mexico so that the non?originating material undergoes a change in tariff classification as described in subdivision (t).

The pillow cover is classified in subheading 6304.93.0000, HTSUSA, and the pillow shell is classified in subheading 6307.90.9989, HTSUSA. For headings 6301 and 6307, HTSUS, 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 of more of the NAFTA parties.

When the 100 percent polyester woven fabric for the cover and shell leaves Korea, it is classified in Chapter 55, HTSUS. As fabrics of Chapter 55, HTSUS, are excepted from meeting the tariff change to headings 6304 through 6310, HTSUS, the non?originating material from Korea does not undergo the requisite change in tariff classification. Accordingly, the merchandise is not eligible for the NAFTA preference.

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." 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

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.

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 pillow cover and the pillow shell is formed in a single country, that is, Korea, as per the terms of the tariff shift requirement, the country of origin of the pillow cover and pillow shell is conferred in Korea.

HOLDING:

The subject pillow cover is classified in subheading 6304.93.0000, HTSUSA, which provides for other furnishing articles, of synthetic fibers. The subject pillow shell is classified in subheading 6307.90.9989, HTSUSA, which provides for other made up articles.

The country of origin of the pillow cover and the pillow shell is Korea. Based upon international textile trade agreements products of Korea which fall within textile category designation 666 are subject to quota and the requirement of a visa.

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.

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.

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 212-637-7078.

Sincerely,

Robert B. Swierupski
Director,

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