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NY K87806





July 22, 2004

CLA-2-94:RR:NC:TA:349 K87806

CATEGORY: CLASSIFICATION

TARIFF NO.: 9404.90.9522

Mr. Ignacio De La Miyar
Speed System International
14405 Industry Avenue
Laredo, TX 78045

RE: The tariff classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for quilted bedspreads; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; Article 509

Dear Mr. De La Miyar:

This is in reply to your letter dated June 30, 2004, requesting a classification, status under the NAFTA and country of origin determination for quilted bedspreads which will be imported into the United States.

FACTS:

The subject merchandise consists of quilted bedspreads. You submitted a sample of a twin-size bedspread. The face side is made from a printed 50 percent polyester and 50 percent cotton woven fabric. The back is made from a 100 percent polypropylene nonwoven fabric and the bedspread is filled with a 100 percent polyester batting. It is quilted through all three layers. The top two corners are square while the bottom corners are rounded. The bedspread is sized to cover a bed and extend to near the floor. It will be made in twin, full, queen and king sizes. Based on the submitted sample, it appears that the three fabrics were first quilted together forming a fabric and then cut to size and shape. The manufacturing operations for the quilted bedspreads are as follows:

PAKISTAN:
-50/50 polyester and cotton fabric is woven. -greige fabric is shipped to Mexico.

MEXICO:
-nonwoven polypropylene fabric is formed. -polyester batting fabric is formed.
-50/50 polyester and cotton fabric is printed and finished. -fabrics are layered and quilted forming a quilted fabric. -quilted fabric is cut to size and shape. -bedspreads are hemmed and finished.
-bedspreads are packed and shipped.

ISSUE:

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

CLASSIFICATION:

The applicable tariff provision for the bedspreads will be 9404.90.9522, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with any material or of cellular rubber or plastics, whether or not covered: other: other: other with outer shell of man-made fibers. The general rate of duty will be 7.3 percent ad valorem.

Due to the fact that the bedspreads are made from a 50/50 blend of fibers, they are classified using HTSUSA Section XI Note 2(A) and Subheading Note 2(A). Additional U.S. Rule of Interpretation 1(d) states that the principles of Section XI regarding mixtures of two or more textile materials shall apply to the classification of goods in any provision in which a textile material is named. The blended fabrics will be classified as if they consisted wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration. Even a slight change in the fiber content may result in a change of classification, as well as visa and quota requirements. These products may be subject to U.S. Customs and Border Protection (CBP) laboratory analysis at the time of importation, and if the fabric is other than the stated blend they may be reclassified by CBP at that time.

The bedspreads fall within textile category designation 666. 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 Textile Status Report for Absolute Quotas, which is available at our Web site at www.cbp.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 bedspreads undergo processing operations in Mexico. Mexico 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 Mexico and if they are wholly obtained or produced in the NAFTA territories or transformed in Mexico so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUSA. For heading 9404, HTSUSA, the appropriate subdivision (t) rule states that:

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.

When the 50/50 polyester and cotton woven fabric for the face of the bedspreads leaves Pakistan, it is classified in heading 5513 or 5514, HTSUSA, depending on the weight. As fabrics of headings 5513 and 5514, HTSUSA, are excepted from meeting the tariff change to subheading 9404.90, HTSUSA, it would initially appear that the non-originating material from Pakistan does not undergo the requisite change in tariff classification.

It is noted, however, that the Appendix to Part 181 of the Customs Regulations (19 CFR Part 181), which sets forth the NAFTA rules of origin regulations, specifies rules for determining whether certain non-originating materials undergo an applicable change in tariff classification when used in self- made goods. The Appendix to Part 181, Part II, Section 4 ("Originating Goods")(8), states:

For purposes of determining whether non-originating materials undergo an applicable change in tariff classification, a self-produced material may, at the choice of the producer of the good into which the self-produced material is incorporated, be considered as an originating material or non-originating material, as the case may be, used in the production of that good.

The quilted fabric, which is manufactured in Mexico prior to the completed bedspreads, is considered a “self-produced material.” On the basis of the foregoing, the producer of the bedspreads ("the good") has the option of identifying the quilted fabric ("the self-produced material") as non-originating materials. If this choice is made, the quilted fabric (classifiable under subheading 5811.00, HTSUS) falls within a tariff provision that is not excepted by the tariff shift rule set forth in subdivision (t). Accordingly, the bedspreads would be deemed as undergoing the requisite change in tariff classification.

Pursuant to the analysis set forth above, the bedspreads qualify as an originating good. Accordingly, they will be entitled to the special "MX" rate of duty if they qualify to be marked as a good of Mexico and provided that all other NAFTA requirements are met.

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 Except for goods of subheading 9404.90 provided for in paragraph (e)(2) of this section, 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.

Subheading 9404.90.95 is included in the paragraph (e)(2) exception to the above tariff shift rule. Paragraph (e)(2)(i) is not applicable as the fabrics comprising the bedspreads are not dyed and printed. Paragraph (e)(2)(ii) states that “If the country of origin cannot be determined under paragraph (e)(2)(i) of this section, except for goods of HTSUS subheading 6117.10 that are knit to shape or consist of two or more component parts, the country of origin is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.” The bedspreads are made from three fabrics. As the fabrics comprising the bedspreads are formed in more than one 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 bedspreads are 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) and Part 102.21(c)(3)(ii). The fabrics that make up the bedspreads 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 bedspreads, country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Mexico.

HOLDING:

The country of origin of the bedspreads is Mexico. If the producer in Mexico opts to identify the “self-produced material” (the quilted fabric) as a non-originating material, the bedspreads will be entitled to the NAFTA “MX” duty rate of Free upon compliance with all applicable laws, regulations and agreements. These products are not subject to quota or visa restrictions.

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 and Border Protection, 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.

Sincerely,

Robert B. Swierupski
Director,

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