HQ 562202 - NAFTA Eligibility – Women’s Wool Coat - United States International Trade Commision Rulings

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HQ 562202

May 29, 2002

MAR-05 RR:CR:SM 562202 NL

CATEGORY: CLASSIFICATION

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

RE: NAFTA Eligibility – Women’s Wool Coat

Dear Mr. Cavanaugh:

This is in reply to your letter dated July 5, 2001, on behalf of Macmor of Canada Ltd., concerning the eligibility for preferential duty treatment under the North American Free Trade Agreement (NAFTA) of a women’s wool coat.

FACTS :

The submission states that the coat is 100% woven wool designated as style 16803R. The coat is manufactured (cut and assembled) in Canada. Materials used to assemble the coat are specified as including: 1) fabric for the wool outer shell woven in the U.S. from yarn of Mexican origin; 2) fabric for the 90% acrylic/10%wool zip-out liner woven in Korea; 3) fabric for the 80% polyester /20% cotton sleeve warmers woven in Taiwan; 4) fabric for the 100% polyester body lining woven in the U.S.; and 5) minor parts including buttons, zippers, buckle and shoulder pads made in China, U.S. and Italy.

It is your understanding that the coat is classified in subheading 6202.11, HTSUS. It is also your understanding that the woven wool fabric is classified in subheading 5112.19, HTSUS.

ISSUE:

Whether the coat qualifies as an originating good for the purposes preferential duty treatment under the NAFTA.

LAW & ANALYSIS:

A good is eligible for the duty rate provided for it in the “Special” subcolumn followed by the symbol “CA” if, under General Note (GN)12(b), HTSUS (19 U.S.C. §1202), it meets the criteria for treatment as a good that originates in the Territory of a NAFTA party. Eligibility also requires that, pursuant to GN12(a)(i), the good qualifies to be marked as a good of Canada under the marking rules set forth in the Customs Regulations. Accordingly, the coat at issue will be eligible for the “Special” “CA” rate of duty provided it is a NAFTA originating good under the relevant rules of origin of GN 12 and it is a good of Canada under the marking rules of 19 CFR Part 102.

The woolen outer shell fabric, by reason of being woven in the U.S. of originating Mexican yarn, is considered an originating material. The yarn is a material originating in Mexico by reason of undergoing the tariff shift specified in GN 12(t)/51.2 for goods classified in headings 51.06 through 51.10.

Originating status for the assembled coat as a whole depends upon whether each of the remaining non-originating materials used in the assembly of the coat is transformed in Canada so that, pursuant to GN 12(b)(ii), the non-originating materials undergo the change in tariff classification specified and the good otherwise satisfies the requirements of GN 12.

Assuming the coat is properly classified in subheading 6202.11, HTSUS, the GN 12 tariff shift rule for goods of subheading 6202.11 requires that non-originating materials undergo:

A change to subheadings 6202.11 through 6202.13 from any other chapter, except from headings 5106 through 5112, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or heading 5508 through 5516, 5801 though 5802 or 6001 through 6006, provided that:

(A) the good is both cut and sewn or otherwise assembled in the territory of one or more NAFTA countries, and (B) the visible lining fabric listed in chapter rule 1 for chapter 62 satisfies the tariff change requirements provided therein.

GN12(t)/62.5, HTSUS.

Also, Chapter rule 3, GN 12(t)/62, HTSUS, which is applicable to goods classifiable in Chapter 62, HTSUS, and therefore to the subject coats provides:

For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. If the rule requires that the good must also satisfy the tariff change requirements for visible lining fabrics listed in chapter rule 1 for this chapter, such requirement shall only apply to the visible lining fabric in the main body of the garment, excluding sleeves, which covers the largest surface area, and shall not apply to removable linings.

On the facts provided, the garment satisfies section A of GN12(t)/62.5, HTSUS, in that it is cut, sewn or otherwise assembled in the territory of Canada, a NAFTA party.

With respect to the requirement in section B of the same rule that the non-originating visible lining fabric undergo specified tariff shifts, here the Korean origin zip out liner is exempted from the requirement under Chapter Rule 3. The polyester body lining satisfies the requirement in section B of GN12(t)/62.5, as it is woven in the U.S. and therefore meets the tariff shift requirements of Chapter Rule 1 of Chapter 62. Also, under Chapter Rule 3, the sleeve warmers originating in Taiwan are not subject to the tariff shift requirements of section B of GN12(t)/62.5, HTSUS.

The shoulder pads of Chinese origin, also under Chapter Rule 3, are not subject to any tariff shift requirement. Buttons, buckles and zippers, to the extent they are non-originating, also are not subject to tariff shift requirements.

As all the non-originating materials have been accounted for under the applicable rules and exceptions, it may be concluded that the wool coat cut, sewn or otherwise assembled in Canada is a NAFTA originating good.

Although you have not inquired, we note that the country of origin marking for the coat will be determined pursuant to section 102, Customs Regulations (19 CFR §102, the NAFTA Marking Rules). We find that the coat is wholly assembled in a single country from more than two component parts pursuant to the rules for headings 6201 through 6208 (§102.21(c)(2), §102.21(e)), and is therefore to be marked as a good of Canada.

HOLDING:

Based on the facts provided, the coat is an originating good for the purposes of duty treatment under the NAFTA, and is to be marked as a good of Canada under the NAFTA Marking Rules.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents are filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant
Director

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