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August 11, 1999

CLA-2:RR:NC:TA:349 E85533

CATEGORY: CLASSIFICATION

Mr. Steve MacDonald
The Power of Dreams Inc.
99 Fifth Avenue, Suite 189
Ottawa, Ontario
Canada K1S 5P5

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

Dear Mr. MacDonald:

This is in reply to your letter dated July 28, 1999, requesting a classification, status under the NAFTA and country of origin determination for a pillowcase which will be imported into the United States.

FACTS:

The subject merchandise is referred to as "The Inspirational Pillowcase". The submitted sample is a standard size pillowcase and it measures 20 x 30 inches. An inspirational design is screen printed on both sides of the pillowcase. The open end of this item is finished with a simple hem. The pillowcase will be made from either a 100 percent cotton woven fabric or a 50 percent polyester and 50 percent cotton woven fabric.

You have detailed three different manufacturing scenarios. The manufacturing operations for the pillowcases are as follows:

Scenario 1
United States:
-fabric is woven.
-fabric is shipped to Italy.

Italy:
-fabric is printed.
-fabric is shipped to Canada.

Canada:
-fabric is cut sewn and hemmed creating a pillowcase. -pillowcase is packed and shipped.

Scenario 2
Italy:
-fabric is woven.
-fabric is printed.
-fabric is shipped to Canada.

Canada:
-fabric is cut sewn and hemmed creating a pillowcase. -pillowcase is packed and shipped.

Scenario 3
Pakistan:
-fabric is woven.
-fabric is shipped to Italy.

Italy:
-fabric is printed.
-fabric is shipped to Canada.

Canada:
-fabric is cut sewn and hemmed creating a pillowcase. -pillowcase is packed and shipped.

ISSUE:

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

CLASSIFICATION:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Heading 6302, HTSUSA, provides for among other things, bed linen. The Explanatory Notes to heading 6302, HTSUSA, include sheets, pillowcases, bolster cases, eiderdown cases and mattress covers as examples of bed linen. Please note, due to the fact that in one version the pillowcase is to be constructed of a 50/50 blend of fibers, it is classified using Section XI Subheading Note 2(A) and Section Note 2(A). The pillowcase will be classified as if it consisted wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration. Even a slight change in the fiber content may result in a change of classification, as well as, visa and quota requirements. The pillowcase may be subject to U.S. Customs' laboratory analysis at the time of import and if the fabric is other than a 50/50 blend it may be reclassified by Customs at that time.

The applicable subheading for the printed pillowcase made from 100 percent cotton fabric will be 6302.21.9010, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of cotton: other: not nappedĀ pillowcases, other than bolster cases. The general duty rate will be 7.2 percent ad valorem.

The applicable subheading for the printed pillowcase made from 50 percent polyester and 50 percent cotton fabric will be 6302.22.2010, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of man-made fibers: pillowcases. The general duty rate will be 12.2 percent ad valorem.

The cotton pillowcase falls within textile category designation 360 and the 50/50 blend pillowcase falls within textile category designation 666. 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.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 pillowcase undergoes processing operations in the United States and Canada, 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:

(i) 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 Canada 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 "CA" in parentheses, are eligible for such duty rate... .

Accordingly, the pillowcase at issue will be eligible for the "Special" "CA" 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 Canada. 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; orĀ.

In all three scenarios, the pillowcases are not wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States nor are they produced entirely in the territory of a NAFTA party exclusively from originating materials. 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 that the non-originating material undergoes a change in tariff classification as described in subdivision (t).

The pillowcase is classified in subheading 6302.21.9010 or 6302.22.2010, HTSUSA. For heading 6302, HTSUS, subdivision (t), Chapter 63, rule 1, states that:

A change to headings 6301 through 6302 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.

In Scenario 1, when the U.S. woven fabrics are printed in Italy they are no longer considered to be an originating good. When the cotton woven fabric or the 50/50 blended fabric for the pillowcase leaves Italy or Pakistan, they are classified in either heading 5208 or Chapter 55, HTSUSA. As fabrics of heading 5208 and Chapter 55, HTSUSA, are excepted from meeting the tariff change to headings 6301 through 6302, HTSUSA, the non-originating material from Italy and Pakistan 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. As the fabric comprising the pillowcase is formed in a single country in each scenario, following the terms of the tariff shift requirement, the country of origin of the pillowcase in Scenario 1 is conferred in the United States, the country of origin in Scenario 2 is conferred in Italy and the country of origin in Scenario 3 is conferred in Pakistan.

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 pillowcase in Scenario 1 made from U.S. woven fabric is Canada, for quota, marking, and duty purposes.

HOLDING:

The subject cotton pillowcase is classified in subheading 6302.21.9010, HTSUSA, which provides for printed cotton pillowcases. The pillowcase made from the 50/50 blended fabric is classified in subheading 6302.22.2010, HTSUSA, which provides for printed pillowcases of man-made fibers.

The country of origin of the pillowcase in Scenario 1 is Canada, the country of origin for the pillowcase in Scenario 2 is Italy and the country of origin for the pillowcase in Scenario 3 is Pakistan. The pillowcases are not entitled to the NAFTA "CA" special duty rate. Based upon international textile trade agreements products of Pakistan which fall within textile category designation 360 or 666 are subject to quota and the requirement of a visa.

In Scenario 2, the general rate of duty for the cotton pillowcases would be 7.2 percent ad valorem. However, the United States Trade Representative has imposed a 100 percent ad valorem rate of duty on specific articles that are the products of certain member States of the European Communities (EC). Bed linen from Italy classified under subheading 6302.21.90, HTSUSA, is subject to this 100 percent ad valorem rate of duty. For further information, refer to the Customs Web Site at WWW.CUSTOMS.GOV.

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 212-637-7078.

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.

Sincerely,

Robert B. Swierupski
Director,

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