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NY K87707




July 29, 2004

CLA-2-RR:NC:TA:349 K87707

CATEGORY: CLASSIFICATION

Ms. Beverley Quinn
Sweet Kyla Inc.
330 Trillium Drive, Unit D
Kitchener, Ontario N2E 2K6

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

Dear Ms. Quinn:

This is in reply to your letter dated July 12, 2004 requesting a classification, status under the NAFTA and country of origin determination for duvet cover and pillow sham sets which will be imported into the United States.

FACTS:

You submitted samples of two sets, identified as Style 1 “Lemonade” and Style 2 “See Saw”. Each set consists of a duvet cover and pillow sham. The Style 1 “Lemonade” duvet cover is comprised of two panels sewn along the edges. The face panel is predominately made from a 100 percent polyester woven suede fabric. The top end of the panel (approximately one sixth) is made from 100 percent cotton woven fabric. That fabric contains a yarn dyed plaid pattern. It features tufts that are created by cutting laid in yarns. Below the top end is a flap made from 100 percent cotton woven fabric. This yarn dyed fabric has a green stripe pattern. Underneath the flap is a zipper closure. The solid colored back panel is made from a plain100 percent cotton woven fabric. The edges are finished with a strip of woven fabric. The fabric is of the same construction as the flap.

The face side of the pillow sham is made from 100 percent cotton woven yarn dyed fabric. The back is made from 100 percent polyester woven suede fabric. There is an overlapping flap closure on the back and the edges are finished with a flange or picture frame effect. The face of the sham has the same tufts as those at the top end of the duvet cover.

Style 2 “SeeSaw” is made from 100 percent cotton woven fabric. It is comprised of two panels of fabric sewn along the edges. The majority of the front panel is printed with a design showing children in various activities. The top end is yarn dyed fabric with a gingham pattern. Sewn to the bottom of the gingham fabric is a yellow colored flap that is made from 100 percent polyester woven suede fabric. Underneath the flap is a zipper closure. The edges of the cover are finished with a strip of woven fabric that contains a gingham pattern. The back portion of the cover is made from a solid piece of fabric.

The pillow sham is made from 100 percent cotton woven fabric. The fabric is printed with the above design. There is an overlapping flap closure on the back and the edges are finished with a flange or picture frame effect. The flange on the face side has a gingham pattern. The duvet cover and pillow sham in both sets are packaged together in a vinyl bag for retail sale at time of import.

The manufacturing operations for these items are as follows:

Style Lemonade:
INDIA:
-plaid yarn dyed cotton fabric is woven.
-fabric is shipped to Canada.

PORTUGAL:
-green stripe cotton fabric (for flap and trim) is woven. -fabric is shipped Canada.

PAKISTAN:
-cotton fabric (for back panel) is woven. -fabric is shipped to Canada.

CHINA:
-polyester fabric is woven.
-fabric is dyed.
-fabric shipped to Canada.

CANADA:
-fabrics are cut and sewn to form duvet cover and pillow sham. -duvet cover and sham are packed as a retail set and shipped.

Style See Saw:
TURKEY:
-cotton fabric is woven and printed.
-yarn dyed gingham fabric is woven.
-fabric is shipped to Canada.

PAKISTAN:
-cotton fabric (for back panel) is woven. -fabric is shipped to Canada.

CHINA:
-polyester fabric is woven.
-fabric is dyed.
-fabric is shipped to Canada.

CANADA:
-fabrics are cut and sewn to form duvet cover and pillow sham. -duvet cover and pillow sham are packed as a retail set and shipped.

ISSUE:

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

CLASSIFICATION:

The styles “Lemonade” and “See Saw” meet the qualifications of “goods put up in sets for retail sale”. The components of the sets consist of different articles which are, prima facie, classifiable in different headings. They are put up together to carry out the specific activity of furnishing a bed and they are packaged for sale directly to users without repacking. It is our opinion that the duvet covers are the component that gives both sets their essential character.

The applicable subheading for the “Lemonade” set will be 6302.32.2060, Harmonized Tariff Schedule of the United States Annotated, (HTSUSA), which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen: of man-made fibers: other other: other. The general rate of duty will be 11.4 percent ad valorem.

The applicable subheading for the “See Saw” set will be 6302.21.9050, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of cotton: other: not napped other. The general rate of duty will be 6.7 percent ad valorem.

Although classified as a set, the duvet covers and pillow shams are subject to textile category numbers as if they were classified separately. The duvet cover in style “Lemonade” falls within category designation 666. The duvet cover in style “See Saw” falls within textile category designation 362. The pillow shams for both styles fall within textile category designation 369. 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 duvet cover and pillow sham sets undergo processing operations in Canada which is a country provided for under the North American Free Trade Agreement. These products will be eligible for the NAFTA preference if they qualify to be marked as a good of Canada and if they are wholly obtained or produced in the NAFTA territories or transformed in Canada so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUSA. For heading 6302, HTSUSA, the appropriate subdivision (t) rules 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 6006, 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.

When imported into Canada, the cotton fabrics from India, Turkey, Portugal and Pakistan are classifiable under headings 5208 or 5209, HTSUSA, depending on the weight of the fabric. The polyester suede fabric from China is classifiable under chapter 54 or 55. As fabrics of heading 5208 and 5209 and chapter 54 through 55, HTSUSA, are excepted from meeting the tariff change to heading 6302, HTSUSA, the non-originating materials from India, Turkey, Pakistan, Portugal and China do not undergo the requisite change in tariff classification. Accordingly, both sets are 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.

Section 102.21(d) addresses the treatment of sets for country of origin purposes. Section 102.21(d) provides the following:

Where a good classifiable in the HTSUS as a set includes one or more components that are textile or apparel products and a single country of origin for all of the components of the set cannot be determined under paragraph (c) of this section, the country of origin of each component of the set that is a textile or apparel product shall be determined separately under paragraph (c) of this section.

The classification of the subject sets, as per an essential character determination, is based on the duvet cover, however, per the terms of Section 102.21(d), one must determine whether or not a single country of origin exists for the entire set.

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 duvet cover and pillow sham are 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 Except for goods of heading 6302 through 6304 provided for in paragraph (e)(2) of this section, 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.

Subheadings 6302.21 and 6302.32 are not included in the paragraph (e)(2) exception to the above tariff shift rules. As the fabrics comprising the duvet cover and pillow sham sets are formed in more than one country, Section 102.21(c)(2) is inapplicable for those items.

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 duvet cover and pillow sham sets are not knit and headings 6302, HTSUSA, are 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 duvet cover and pillow sham sets, 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) and Part 102.21(c)(3)(ii). The fabrics that make up the duvet cover and pillow sham in both sets 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 subject duvet cover and pillow sham sets, country of origin is conferred by the last
country in which an important assembly or manufacturing process occurred, that is, Canada.

HOLDING:

The country of origin of the duvet cover and pillow sham sets is Canada. The sets are not eligible for the NAFTA preferential rate.

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 646-733-3043.

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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