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NY I87420




November 18, 2002

CLA-2-56:SRR:NCTA:350 I87420

CATEGORY: CLASSIFICATION MARKING COUNTRY OF ORIGIN

TARIFF NO.: 5602.10.9090; 6307.90.9889

Ms. Wendy L. Burns
Northern Custom Services
P.O. Box 331
Lewiston, NY 14092

RE: The tariff classification, origin, status under the North American Free Trade Agreement (NAFTA), and the proper country of origin marking of needleloom felt products, from Canada. 19 C.F.R. §102.21(c)(2) and (c)(4), Article 509.

Dear Ms. Burns:

In your letter dated October 16, 2002, on behalf of The Brand Felt Ltd., Mississauga, Ontario, Canada, you requested a ruling on the status of felt pads cut to various sizes and configurations from Canada under the NAFTA, and the proper country of origin and marking for these products.

According to your letter, 100% viscose rayon needleloom felt material of German manufacture is shipped to Canada. In Canada, this material is dot-coated on both sides with an unspecified plastics adhesive substance. After this coating has been applied, the material is cut to various sizes and configurations based on the requirements of the individual American customers. These shapes will include rectangular strips as evidenced by the instant samples and, additionally, may include panels, squares, rectangles, circles, animal shapes, and many others. These adhesive pads are to be applied like tape to the back of various articles which can then be adhered to walls and household appliances such as furniture, etc., without staining or leaving a sticky or tacky residue when removed. Additionally, these pads have application in picture framing, bulletin boards, hobby mats and jewelers mats, to name just a few. A non-stick release paper is applied to both sides of the finished pads; it is considered packing.

The applicable subheading for any of these pads which are imported into the United States in the form of squares or rectangles will be 5602.10.9090, Harmonized Tariff Schedule of the United States (HTS), which provides for needleloom felt and stitch-bonded fiber fabrics, ..., of other than wool or fine animal hair. The general rate of duty rate will be 11 percent ad valorem.

Those cut into circles, animal shapes, or any shape other than a square or rectangle fall within the tariff definition of “made up” found in Note 7 to Section XI, HTS. The applicable subheading for any of these pads which are imported into the United States in any form other than squares or rectangles will be 6307.90.9889, HTS, which provides for other made up textile articles. The general rate of duty rate will be seven percent ad valorem.

NAFTA:

This material, as it arrives in Canada from its German supplier, is classifiable as a needleloom felt under tariff subheading 5602.10.9090. That is the same classification as the finished items imported into the United States in the shape of squares or rectangles. As such, this non-originating needleloom felt material produced in Germany does not qualify for preferential treatment under the NAFTA because, according to General Note 12(t)/56, HTS, Change in Tariff Classification Rules, the applicable tariff shift requirement has not been met. Specifically, GN 12(t)/56 reads:

A change to headings 5601 through 5609 from any other chapter, [emphasis added] except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, or chapters 54 through 55.

Since the tariff shift requirement has not been met, no reduction in duty can be made under the terms of NAFTA.

The applicable rule for the merchandise classifiable in subheading 6307.90.9889, GN 12(t)/63, states

A change to heading 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5308 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 or more of the NAFTA parties.

The felt pads are cut in Canada, but there is no sewing in the manufacturing process. Assembly has generally been interpreted to consist of the joining of components, and dot-coating with an adhesive does not qualify as an assembly process. Thus, no assembly takes place on these pads. Since the felt is neither cut and sewn nor assembled in Canada, it does not meet the requirement of GN 12(t)/63 and the pads cut into circles and animal shapes, or any shape other than a square or rectangle, do not qualify for NAFTA.

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.” Since, the finished products are produced in more than one country, this provision 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 the 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

5602 - 5603 A change to heading 5602 through heading 5603 from any heading outside that group, provided that the change is the result of a fabric-making process.

These materials do not under go the requisite tariff shift requirement as outlined above and, therefore, Section 102.21 (c)(2) is not applicable.

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 goods are neither knit, nor wholly assembled in a single country, 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 [emphasis added].”

We deem that the manufacture of the needleloom felt material in Germany is the most important manufacturing operation in producing what becomes the finished product, that is, the square or rectangular felt pads. Therefore, Germany is considered to be the correct country of origin.

Regarding the country of origin of the merchandise classifiable under subheading 6307.90.9889, we must refer to Section 102.21(c)(2); paragraph (e) states:

HTSUS Tariff shift and/or other requirements

The country of origin of a good classifiable under 6307.90 is the country, territory or insular possession in which the fabric comprising the good was formed by a fabric-making process.

Since the country in which the fabric was formed is Germany, the country of origin of the merchandise classifiable under subheading 6307.90.9889 is Germany.

With respect to your question concerning the marking of these products, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container imported into the U.S. shall be marked in a conspicuous place as legible, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

For marking purposes, “Made in Germany” or “Product of Germany” would be acceptable according to the applicable regulations.

This ruling is being issued under the provisions of Parts 177 and 181 of the Customs Regulations (19 C.F.R. 181).

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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