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NY E82389




June 16, 1999

CLA2-RR:NC:TA:352 E82389

CATEGORY: CLASSIFICATION

Mr. Ross H. Chafe
Flags Unlimited
364 St. Vincent Street
Barrie, Ontario, Canada L4M 4A5

RE: Classification and country of origin determination for flags manufactured in part in Canada from United States knit fabric; 19 CFR 102.21(c)(2); tariff shift

Dear Mr. Chafe:

This is in reply to your letter dated April 23, 1999, requesting a classification and country of origin determination for 100% polyester knit flags either printed, cut and sewn in Canada from fabric knit in the United States or printed in Canada from U.S. knit fabric and finished into a flag In the United States.

FACTS:

The subject merchandise consists of knit flags. The submitted flag measures approximately 58" X 34" and is rectangular in shape. It is manufactured from 100% filament polyester warp knit fabric and has been printed with a company name and logo. The flag will be used for decorative and advertising purposes and features metal grommets to facilitate its attachment to a flag pole.

Your correspondence indicates that you require a ruling based on several manufacturing scenarios. The manufacturing operations for the production of these flags are as follows:

Scenario 1 Greige fabric is warp knit in the United States. The fabric is shipped to Canada where the fabric is printed with the appropriate design. The printed fabric is imported into The United States where it is cut to size, hemmed and assembled with other components such as the metal grommets.

Scenario 2 Greige fabric is warp knit in the United States and shipped to Canada. The fabric is printed with the appropriated design and cut to its approximate rectangular size. The cut rectangle of fabric is shipped to the United States where it is hemmed and finished into a flag by assembly with other components such as the metal grommets.

Scenario 3 Greige fabric is warp knit in the United States. The fabric is shipped to Canada where it is printed, cut to size, hemmed and assembled into a flag. The flags are then bulk packed for export back to the United States.

Scenario 4 Greige fabric is warp knit in the United States. The fabric is shipped to Canada where it is printed with the flag design, cut to size, hemmed and assembled into a flag. Each flag is individually packed in its own container and exported to the United States.

ISSUE:

What are the classification and country of origin of the knit flag?

CLASSIFICATION:

The applicable subheading for the flags 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% ad valorem.

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

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 used to manufacture these flags was 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 United States.

In the case of scenarios 1 and 2, while the goods being imported into the United States would be considered fabric of Canadian origin, the fabric will be further processed in the United States into flags. Under these circumstances pursuant to Section 102.21(c) and (e) the country of origin of the flags would be the United States.

In the case scenario 3 and 4, 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 and 4 the U.S. formed fabric is sent to Canada where it is cut and sewn into flags, pursuant to section 12.130(c), the country of origin of the flags under these conditions is Canada.

HOLDING:

The country of origin of the flags in scenario 1 and 2 is the United States. The country of origin of the of the flags in scenario 3 and 4 is Canada.

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 177.9(b)(1). 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 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), 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 in accordance with 19 CFR 177.2.

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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