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NY F86443

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May 19, 2000

CLA-2-RR:NC:TA:349 F86443

CATEGORY: CLASSIFICATION

Ms. Ann Williams
Tower Group International Inc.
205 West Service Road
Champlain, NY 12919

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for comforters; 19 CFR 102.21(c)(4); most important assembly or manufacturing process; 19 CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; Article 509

Dear Ms. Williams:

This is in reply to your letter dated April 25, 2000, on behalf of Beco Industries, requesting a classification, status under the NAFTA and country of origin determination for comforters which will be imported into the United States.

FACTS:

The subject merchandise consists of comforters. The instant comforters are made from a quilted comforter form enclosed by an outer non-quilted shell. The outer shell and the shell of the comforter form are stated to be made from 60 percent cotton and 40 percent polyester woven fabrics. The form is filled with a polyester batting fabric. You submitted samples of the comforter in various stages of manufacture. Sample 1 is the outer shell made from a printed fabric. The top and bottom panels are sewn together on three sides and left unfinished on the fourth. The second sample is the comforter form. It is essentially a quilted comforter with a plain white woven fabric shell and a filling. The final sample is the completed comforter. The comforter form is sewn to the outer shell at one end. The opposite end will either be sewn closed or, as in the submitted sample, made to resemble a duvet cover with a buttoned opening. The outer shell and the form can not be separated. The samples will be returned as requested.

You have detailed two different manufacturing scenarios. The manufacturing operations for the comforters are as follows:

Scenario 1
Pakistan:
-fabric for the outer shell is woven and printed. -fabric for the shell of the form is woven and finished. -outer shell fabric is cut and sewn to form a shell with an unfinished opening. -shells and form fabric are shipped to Canada.

United States:
-polyester batting fabric is made.
-fabric is shipped to Canada.

Canada:
-outer fabric for the comforter form is cut to size. -batting fabric is cut to size.
-comforter form is sewn, stuffed and quilted. -comforter form is sewn to the inside end of the outer shell. -open end of the outer shell is either sewn closed or made to resemble a duvet cover. -comforters are packed and shipped.

Scenario 2:
Pakistan:
-fabric for the outer shell is woven and printed. -outer shell fabric is cut and sewn to form a shell with an unfinished opening. -shells are shipped to Canada.

United States:
-fabric for the shell of the form is woven from originating fiber and finished. -polyester batting fabric is made.
-fabrics are shipped to Canada.

Canada:
-outer fabric for the comforter form is cut to size. -batting fabric is cut to size.
-comforter form is sewn, stuffed and quilted. -comforter form is sewn to the inside end of the outer shell. -open end of the outer shell is either sewn closed or made to resemble a duvet cover. -comforters are packed and shipped.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the comforters will be 9404.90.8020, HTSUSA, which provides for mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: other: of cotton, not containing any embroidery, lace, braid, edging, trimming, piping exceeding 6.35 mm or applique work quilts, eiderdowns, comforters and similar articles. The general rate of duty will be 4.6 percent ad valorem. The comforters fall within textile category designation 362.

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 comforters undergo 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 comforters at issue will be eligible for the "Special" "CA" rate of duty provided they are NAFTA "originating" goods under General Note 12(b), HTSUSA, and they qualify to be marked as goods 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;

As the outer fabric shells in both scenarios and the shell fabric for the form in Scenario 1 are made in Pakistan, the comforters do not meet the eligibility requirements of General Note 12(b)(i) or 12(b)(iii), HTSUSA. Therefore, we must ascertain whether the non-originating components qualify for NAFTA eligibility under General Note 12(b)(ii), HTSUSA. In order to qualify, the Pakistani shells and fabric must undergo the change in tariff classification required in General Note 12(t), HTSUSA. The applicable subdivision (t) rule for Chapter 94 provides the following:

7. A change to subheading 9404.90 from any other chapter, except from headings 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408 or 5512 through 5516.

In Scenario 1, when the comforter form shell fabric from Pakistan is sent to Canada, the fabric is classified in heading 5210, HTSUSA. As fabrics of heading 5210, HTSUSA are excepted from meeting the tariff change to subheading 9404.90, HTSUSA, the non-originating material from Pakistan does not undergo the requisite change in tariff classification. Accordingly, the Scenario 1 comforters are not eligible for the NAFTA preference.

In Scenario 2, when the outer fabric shells from Pakistan are sent to Canada, the shells are classified in heading 6307, HTSUSA. As this heading is not excepted by subdivision (t) for subheading 9404.90, HTSUSA, the non-originating materials from Pakistan do undergo the requisite change in tariff classification. Accordingly, the Scenario 2 comforters are eligible for the NAFTA preference. Assuming that the comforters qualify to be marked as a good of Canada, they are entitled to the special "CA" duty rate, provided that a Certificate of Origin is completed and submitted in accordance with 19 CFR 181.11.

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

9404.90 The country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

Accordingly, as the fabrics comprising the comforters are not formed in a single country, Section 102.21(c)(2) is inapplicable.

Section 102.21(c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

As the subject merchandise is not knit and subheading 9404.90, HTSUSA, is excepted from provision (ii), Section 102.21 (c)(3) is inapplicable.

Section 102.21 (c)(4) states, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred". In the case of the subject merchandise, the most important manufacturing process occurs at the time of fabric making. Basing the country of origin determination on the fabric making process as opposed to the assembly process carries out the clear intent of Section 334 as expressed in Section 334(b)(2). In the case of the subject comforters, the fabric making process of the outer fabric shell and the comforter form shell constitute the most important manufacturing process. It is these shells which actually form the merchandise. Accordingly, in Scenario 1, the fabric making process in Pakistan, where the fabrics for the shells of the comforter are formed, constitutes the most important manufacturing process and the country of origin for Scenario 1 is Pakistan.

In the case of the comforters in Scenario 2 however, the fabric for the shells of the comforters are sourced in more than one country. As no one fabric is more important than the other, a single country of origin determination cannot be made based on Section 102.21(c)(4).

Paragraph (c)(5) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory or insular possession in which an important assembly or manufacturing process occurred". Accordingly, in the case of the comforters made following Scenario 2, the country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Canada.

HOLDING:

The subject comforters are classified in subheading 9404.90.8020, HTSUSA, which provides for quilts, comforters and eiderdowns of cotton.

The country of origin for the comforters in Scenario 1 is Pakistan. Based upon international textile trade agreements products of Pakistan which fall within textile category designation 362 are not subject to quota or visa restrictions. The country of origin for the comforters in Scenario 2 is Canada. They will be entitled to the NAFTA "CA" special duty rate of Free upon compliance with all applicable laws, regulation and agreements.

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.

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 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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See also:

• Tariff No.: 6209.20.50 - Babies' garments & clothing acc. nesoi, of cotton, incl. sunsuits & sim app, sets & parts of sets, & diapers, not knitted or crocheted
• Tariff No.: 9404.90.80 - Arts. of bedding & similar furnishings stuffed or internally fitted w/any material nesoi, of cotton, w/o embroidery/lace/braid/edging,etc