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June 11, 1999

CLA-2-65:RR:NC:3:353 E82121

CATEGORY: CLASSIFICATION

TARIFF NO.: 6505.90.6090

Ms. Julie Dausman
Ex Officio
1419 Elliot Avenue West
Seattle, WA 98119

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) and Trade Preference Levels (TPL) for a reversible hat.

Dear Ms. Dausman:

In your letter dated February 11, 1999, you requested a ruling regarding tariff classification, status under NAFTA and eligibility for TPL.

FACTS:

The submitted sample is a Style NC270-1420 Reversible Cloche Hat. The hat is constructed of knit 100% polyester fabric. It is made of three pieces, and features a round flat top and four inch brim.

Foreign fibers from a non-NAFTA country are imported into the United States. In the U.S., the fibers are made into a 100% knit polyester fabric. The fabric is shipped to Canada where it is cut to shape and sewn into a hat.

CLASSIFICATION:

The applicable subheading for the Style NC270-1420 Reversible Cloche Hat will be 6505.90.6090, Harmonized Tariff Schedule of the United States (HTS), which provides for AHats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not in strips), whether or not lined or trimmed; hair?nets of any material, whether or not lined or trimmed: Other: Of man-made fibers: Knitted or crocheted or made up from knitted or crocheted fabric: Not in part of braid...Other: Other: Other.@ The general rate of duty will be 29.8 cents per kilogram plus 10.6% ad valorem. NAFTA:

Regarding the North American Free Trade Agreement (NAFTA), General Note (GN) 12(a)(i) states:
a) Goods originating in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided herein. For the purposes of this note??

(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 set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), when such goods are imported into the customs territory of the United States 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, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.

GN 12(b)(ii)(A) states in part:

(b) 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??

(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...

The man-made fibers imported into the United States are classified in Chapters 54 or 55. The knit 100% polyester fabric formed in the United States is classified in Chapter 60. GN 12(t)60 requires “A change to headings 6001 through 6002 from any other chapter, except from headings 5106 through 5113, chapter 52, headings 5307 through 5308, or 5310 through 5311, or chapters 54 through 55.” Therefore the fabric is not considered originating in the United States.

Accordingly, 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 the non-originating materials undergo a change in tariff classification as described in GN12(t)/65 which requires:

Chapter 65.

1. A change to headings 6501 through 6502 from any other chapter.

2. A change to headings 6503 through 6507 from any heading outside that group.

Each of the non-originating materials used to make the Style NC270-1420 Reversible Cloche Hat has satisfied the change in tariff classification required under HTSUSA General Note 12(t)/65.

GN12(a)(i) requires that the goods also qualify to be marked as goods of Canada.

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:"

Copy the tariff shift rule for the applicable subheading: HTSUS Tariff shift and/or other requirements

` 6505.90 (1) If the good consists of two or more components, a change to subheading 6505.90 from any other heading, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

As the caps are wholly assembled in a single country, that is, Canada, as per the terms of the tariff shift requirement, country of origin is conferred in Canada.

The Style NC270-1420 Reversible Cloche Hat will be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

TPL:

Since the goods qualify for NAFTA treatment, there is no reason to address TPL eligibility.

This ruling is being issued under the provisions of Parts 177 and 181 of the Customs Regulations (19 C.F.R. 177 and 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 Kenneth Reidlinger at 212-637-7084.

Sincerely,

Robert B. Swierupski
Director,

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