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NY H89845




April 12, 2002

CLA-2-58:RR:NC:TA:350 H89845

CATEGORY: CLASSIFICATION

TARIFF NO.: 5811.00.3000

Mr. Brian Kavanaugh
Deringer Logistics Consulting Group
1 Lincoln Blvd., Suite 225
Rouses Point, NY 12979

RE: Classification, status under the North American Free Trade Agreement (NAFTA), and country of origin determination for quilted fabric produced in Canada from raw materials the product of the United States and/or Pakistan and Estonia. 19 C.F.R. §102.21(c)(5); Article 509.

Dear Mr. Kavanaugh:

In your letter dated March 19, 2002, on behalf of Deitsch Plastic Company, West Haven, CT, you requested a tariff classification ruling. No samples were furnished, only a fabric description.

FACTS:

Your correspondence indicates that a needleloom felt (Heading 5602) of U.S. origin which is composed of polyester man-made fibers will be shipped to Canada along with either a woven fabric of Pakistani or Estonian manufacture. Specifically, the technical composition of these woven materials was given as:

Pakistan (Ibex style) Estonia (Spectra)

80% cotton/20% polyester 50% cotton/50% polyester 38 x 30 yarn count 78 x 54 yarn count
5.5 oz/sq.yd. 4.5 oz/sq.yd

In a recent telephone conversation with this office, you stated that the polyester felt batting portion will weigh either 7.5 or 9.5 oz/sq.yd.

You indicate that in Canada the needleloom felt of U.S. origin and one of the above woven fabrics will be quilted together before being returned to the United States. The woven fabric will be on one surface only. We presume the quilting will be in a standard quilt stitch pattern. After the reimportation of the quilted piece goods into the United States, the material will be cut to size, and then a waterproof sheet of unspecified construction and content will cover the other surface of the felt and be sewn to the edges, forming a finished product, i.e., a incontinent pad.

ISSUE:

What is the classification, eligibility under NAFTA and country of origin of the subject merchandise?

CLASSIFICATION:

This quilted fabric is classifiable under subheading 5811.00.3000, Harmonized Tariff Schedule of the United States (HTS), which provides for quilted products in the piece, composed of one or more layers of textile materials assembled with padding by stitching or otherwise, of man-made fibers. The rate of duty will be 9.6 percent ad valorem.

NAFTA ELIGIBILITY:

For the purposes of NAFTA, 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; or

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).

Specifically, such note sets out the tariff shift rule applicable to goods classified in heading subheading 5811.00.3000 and it reads as follows:

Chapter 58. A change to heading 5801 through 5811 from any other chapter, except from heading 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, or chapters 54 through 55.

The non-originating (either Pakistan or Estonia) material used to make the quilted fabric has not satisfied the change in tariff classification required under HTSUSA General Note 12(t)/58. Specifically, the Ibex style fabric from Pakistan is classifiable in the tariff range 5204 through 5212 and the Spectra fabric from Estonia is a product of Chapter 55. Therefore, the quilted material does not meet the criteria of NAFTA and, therefore, will not be entitled to a Free rate of duty under the NAFTA. The general rate of duty is 9.6 percent ad valorem.

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, 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

The country of origin of a good classifiable under heading 5811 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

A fabric making process is defined as “any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarns, twin, cordage, rope or fabric and results in a textile fabric.” Accordingly, the operations performed in Canada do not meet such definition.

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 neither knit, nor is wholly assembled in only one country, Section 102.21 (c)(3) is inapplicable.

We, therefore, turn to Section 102.21 (c)(4) which 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 the fabric-making. The fabric for the subject quilted piece goods is sourced from more than one country. In the opinion of this office all of the fabrics comprising the piece goods are of equal importance. As no one fabric is more important than the other, Section 102.21(c)(4) cannot readily be used to make a determination.

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 subject merchandise, it is the country where the quilting together of the two materials actually takes place, i.e., Canada, that becomes the country of origin of this product.

HOLDING:

The country of origin of the quilted fabric is Canada. 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 George Barth at 646-733-3044.

Sincerely,

Robert B. Swierupski
Director,

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