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July 7, 1999

CLA-2-63:RR:NC:TA:352 E81996

CATEGORY: CLASSIFICATION

TARIFF NO.: 6307.90.9989

Mr. Robert L. Follick
Follick & Bessich
One Exchange Place, Suite 915
Jersey City, NJ 07302

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of wine bottle gift bag from Mexico or China; Article 509; country of origin marking.

Dear Mr. Follick:

In your letter dated June 3, 1999, on behalf of your client Wrap-Art Ltd., you requested a ruling on the status of a wine bottle gift bag from Mexico under the NAFTA. You also requested a classification, country of origin and marking ruling on the same bag if wholly produced in China.

The submitted sample is a wine bottle bag made by sewing together several panels of 100% staple polyester plain woven fabric. Measuring approximately 16" X 6", the bag is constructed with two layers of woven fabric which have been sewn together. The outer fabric has been printed with a reindeer motif while the fabric that forms the interior of the bag has been dyed red. Both the fabrics are constructed with fine yarns, are very light in weight and will afford little or no protection from breakage to the wine bottle which it is designed to contain. The top 2.5 inches of the bag has been folded down exposing the red lining fabric. Approximately 1/3 down from the top of the bag a plied cord has been sewn to the bag which functions both as a decorative accent and as a mechanism for tightening the bag around the neck of a bottle of wine. This bag is designed as a gift wrap for a bottle of wine.

Your correspondence presents three scenarios of how and where these bags will be manufactured. In scenario 1 the all the fabric will be woven and finished in China. The fabric will be cut and sewn in China creating the bag. The cord closure will also be manufactured in China, by extruding the fiber, twisting the fibers into yarns and plying the yarns into a cord. Scenario 2 contemplates extruding the fiber for all the fabric in Mexico, chopping it into staple fiber and spinning the fiber into yarns in Mexico and weaving the yarns into woven fabric in Mexico. The woven fabrics will then be printed or dyed and finished in Mexico and finally the fabric will be cut and sewn into the bag in Mexico. It should be noted that the cord closure will be produced in China in a manner identical to the process outlined in scenario 1.

Scenario 3 proposes to extrude the fiber, chop the fiber into staple fiber, spin the fiber into yarn, weave the yarn into fabric and dye or print and finish the fabric in the United States. The fabric will then be shipped to Mexico where it will be cut and sewn into the wine bottle bag. As in all the scenarios, the cord will be produced in China in the same manner as described in scenario 1.

The applicable tariff provision for the wine bottle bag will be 6307.90.9989, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for other made up articles, including dress patterns, other, other, other, other, other. The general rate of duty will be 7 percent ad valorem.

NAFTA ELIGIBILITY

For scenario 2 each of the non-originating materials used to make the wine bottle bag has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/63. The wine bottle bag will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. It should be noted that the cord was not considered since chapter rule 1 to chapter 63 directs that only components that determine the tariff classification of the good must satisfy the rule under General Note 12(t)/63.

For scenario 3 each of the non-originating materials used to make the wine bottle bag has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/63. The wine bottle bag will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. It should be noted that the cord was not considered since chapter rule 1 to chapter 63 directs that only components that determine the tariff classification of the good must satisfy the rule under General Note 12(t)/63.

COUNTRY OF ORIGIN

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 (C.R.), 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

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 wine bottle bag in scenario 1 is comprised of fabric formed in a single country, that is, China, as per the terms of the requirement specified for the good in paragraph (e) of Section 102.21, C.R., country of origin is conferred in China.

As the wine bottle bag in scenario 2 is comprised of fabric formed in a single country, that is, Mexico, as per the terms of the requirement specified for the good in paragraph (e) of Section 102.21, C.R., country of origin is conferred in Mexico.

For scenario 3, where the fabric comprising the good was formed in the United States, the rule in section 102.21(c)(2) and (e) would appear to determine that the country of origin of this good is the U.S. However, Section 12.130(c), C.R., provides that any product of the United States which is returned after being advanced in value or improved in condition abroad, shall be considered a foreign article. In TD 90-17 of February 23, 1990, Section 12.130 C.R. was extended to cover the determination of the country of origin of textile goods for quota, duty and marking purposes. Since in scenario 3 the U.S. formed fabric is sent to Mexico where it is cut and sewn into the wine bottle bag, pursuant to section 12.130(c), the country of origin of the wine bottle bag under these conditions is Mexico.

Marking

Your letter also requests a ruling on whether the proposed marking “Made in China” for scenario 1 and “Made in Mexico” for scenarios 2 and 3 are acceptable country of origin markings for imported wine bottle bags if another marking "Englewood NJ" appears on the article which is a country or locality other than the actual country of origin of the article. A marked sample was not submitted with your letter for review.

Your client contemplates importing wine bottle bags which will be sealed in retail packaging. The packaging has a cardboard header on which the name and address of the distributor will be printed. In close proximity, legibly and conspicuously in lettering at least as large as the distributors address, the header will be printed with the country of origin preceded by the words “Made in ___”.

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. In this case, the ultimate purchaser of the wine bottle bags is the consumer who purchases the product at retail.

An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. Accordingly, if Customs is satisfied that the article will remain in its container until it reaches the ultimate purchaser and if the ultimate purchaser can tell the country of origin of the wine bottle bag by viewing the container in which it is packaged, the individual wine bottle bag would be excepted from marking under this provision.

The wine bottle bags which are imported in containers that are marked in the manner described above, are excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d). Accordingly, marking the container in which the wine bottle bags are imported and sold to the ultimate purchaser in lieu of marking the article itself is an acceptable country of origin marking for the imported wine bottle bags provided the port director is satisfied that the article will remain in the marked container until it reaches the ultimate purchaser.

Section 134.46, Customs Regulations (19 CFR 134.46), deals with cases in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or locality in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appears on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin. In such a case, there shall appear, legibly and permanently, in close proximity to such words, letters, or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," Product of," or other words of similar meaning.

In order to satisfy the close proximity requirement, the country of origin marking must generally appear on the same side(s) or surface(s) in which the name or locality other than the actual country of origin appears.

The proposed marking of imported wine bottle bags , as described above, satisfies the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134 and is an acceptable country of origin marking for the imported wine bottle bags.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.

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 Alan Tytelman at 212-637-7092.

Sincerely,

Robert B. Swierupski
Director,

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