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NY L81081




December 15, 2004

CLA-2-RR:NC:TA:349 L81081

CATEGORY: CLASSIFICATION

Ms. Margaret R. Polito
Neville Peterson LLP
17 State Street, 19th Floor
New York, NY 10004

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for comforters and pillows; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.21(c)(2); tariff shift; NAFTA Preference Override; Article 509

Dear Ms. Polito:

This is in reply to your letter dated November 24, 2004, requesting a classification, status under the NAFTA and country of origin determination for comforters and pillows which will be imported into the United States. This request is made on behalf of WestPoint Stevens Inc.

FACTS:

The subject merchandise consists of comforters and pillows. Samples were not submitted. The comforter shells will be made from 100 percent cotton woven fabric. They will be stuffed with down or polyester fill. For the purpose of this ruling it is assumed that polyester filling is a loose fiberfill rather than a batting fabric. You indicate in your letter that the comforters will not contain any embroidery, lace, braid, edging, trimming, piping or appliqué work. The outer shell of the bed sized pillows will be made from either 100 percent cotton woven fabric or a chief weight man-made fiber fabric. They will be stuffed with down or polyester fibers. You have described two manufacturing scenarios for each product. The manufacturing operations for the comforters and pillows are as follows:

Comforters - Scenario A
CHINA OR PAKISTAN:
-cotton fabric for the comforter shell is woven and finished. -fabric is cut to size and shape.
-components are sewn creating comforter shells that may include internal baffles.
-comforter shells are shipped to Mexico.

MEXICO:
-washed down or polyester fill is inserted into the comforter shells. -comforters are sewn closed and finished. -comforters are inspected, packed and shipped.

Comforters - Scenario B
CHINA OR PAKISTAN:
-cotton fabric for the comforter shell is woven and finished. -fabric is shipped to Mexico.

MEXICO:
-fabric is cut to size and shape.
-components are sewn creating comforter shells that may include internal baffles.
-washed down or polyester fill is inserted into the comforter shells. -comforters are sewn closed and finished. -comforters are inspected, packed and shipped.

Pillows - Scenario A
CHINA OR PAKISTAN:
-cotton fabric or chief weight man-made fiber fabric is woven and finished. -fabric is cut to size and shape.
-components are sewn creating the pillow shells. -pillow shells are shipped to Mexico.

MEXICO:
-washed down or polyester fill is inserted into the pillow shells. -pillows are sewn closed.
-pillows are packed and shipped.

Pillows - Scenario B
CHINA OR PAKISTAN:
-cotton fabric or chief weight man-made fiber fabric is woven and finished. -fabric is shipped to Mexico.

MEXICO:
-fabric is cut to size and shape.
-components are sewn creating the pillow shells. -washed down or polyester fill is inserted into the pillow shells. -pillows are sewn closed.
-pillows are packed and shipped.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the down filled cotton comforters will be 9404.90.8505, 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 springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: other: quilts, eiderdowns, comforters and similar articles with outer shell of cotton. The general rate of duty will be 12.8 percent ad valorem.

The applicable subheading for the polyester filled cotton comforters will be 9404.90.8020, HTSUSA, which provides for mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: of cotton, not containing any embroidery, lace, braid, edging, trimming, piping exceeding 6.35 mm or appliqué work quilts, eiderdowns, comforters and similar articles. The general rate of duty will be 4.4 percent ad valorem.

The applicable subheading for the cotton pillows will be 9404.90.1000, HTSUSA, which provides for mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: pillows, cushions and similar furnishings: of cotton. The general rate of duty will be 5.3 percent ad valorem.

The applicable subheading for the chief weight man-made fiber pillows will be 9404.90.2000, HTSUSA, which provides for mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: pillows, cushions and similar furnishings: other. The general rate of duty will be 6 percent ad valorem.

The comforters fall within textile category designation 362. The pillows with a cotton outer shell fall within textile category designation 369. The chief weight man-made fiber pillows fall under a subheading that is not assigned a textile category number. Quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information as to whether quota and visa requirements apply to this merchandise, we suggest that you check, close to the time of shipment, the “Textile Status Report for Absolute Quotas” available at our web site at www.cbp.gov. In addition, you will find current information on textile import quotas, textile safeguard actions and related issues at the web site of the Office of Textiles and Apparel, at otexa.ita.doc.gov.

NAFTA ELIGIBILITY:

In both scenarios the comforters and pillows 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 state 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.

In Scenario A when the non-originating comforter shells and pillow shells from Pakistan or China enter Mexico, they are classified in heading 6307, HTSUSA. As heading 6307, HTSUSA is not excepted by subdivision (t), the merchandise undergoes the requisite change in tariff classification and the comforters and pillows qualify for NAFTA preference.

In the B Scenarios when the cotton and chief weight man-made fiber fabrics leave China or Pakistan, they are classified in heading 5208 or 5209, HTSUSA, depending on the weight and 5512 through 5516, HTSUSA, depending on the weight and fiber. As fabrics of these headings are excepted from meeting the tariff change to subheading 9404.90, HTSUSA, it would initially appear that the non-originating material from China or 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 comforter and pillow shells, which are manufactured in Mexico prior to the completed comforters and pillows, are considered a “self-produced material.” On the basis of the foregoing, the producer of the comforters and pillows ("the good") has the option of identifying the shells ("the self-produced material") as non-originating materials. If this choice is made, the comforter and pillow shells (classifiable under subheading 6307.90, HTSUSA) fall within a tariff provision that is not excepted by the tariff shift rule set forth in subdivision (t). Accordingly, the comforters and pillows would be deemed as undergoing the requisite change in tariff classification.

Pursuant to the analysis set forth above, the comforters and pillows under Scenario A and B 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:

Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the 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.

Subheadings 9404.90.10, 9404.90.20 (pillows) and 9404.90 80 (polyester filled comforters) are not included in the paragraph (e)(2) exception to the above tariff shift rule. In Scenario A and B the pillows and fiber filled comforters are made from a fabric that was formed in a single country. As the fabrics comprising the pillows and fiber filled comforters are formed in a single country, that is, China when the fabric is woven in China and Pakistan when the fabric is woven in Pakistan, as per the terms of the tariff shift requirement, country of origin is conferred in China when the shell fabric is woven in China and Pakistan when the shell fabric is woven in Pakistan. Subheading 9404.90.85 (down filled comforters) is included in paragraph (e)(2) however, goods classified in that subheading as of cotton or which consist of fiber blends containing 16 percent or more by weight cotton are excepted from paragraph (e)(2). The down filled comforters are made from a fabric that was formed in a single country. As the fabrics comprising the down filled comforters are formed in a single country, that is, China when the fabric is woven in China and Pakistan when the fabric is woven in Pakistan, as per the terms of the tariff shift requirement, country of origin is conferred in China when the shell fabric is woven in China and Pakistan when the shell fabric is woven in Pakistan.

However, the comforters and pillows qualify as a NAFTA originating good. As stated in Section 102.19(a):

Except in the case of goods covered by paragraph (b) of this section, if a good which is originating within the meaning of §181.1(q) of this chapter is not determined under §102.11(a) or (b) or §102.21 to be a good of a single NAFTA country, the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing, provided that a Certificate of Origin (see §181.11 of this chapter) has been completed and signed for the good.

As the comforters and pillows qualify as a NAFTA originating good, applying the terms of Section 102.19(a), the country of origin of the comforters and pillows is Mexico. The pillows in both scenarios will be entitled to the special "MX" duty rate, provided that all other requirements of the NAFTA are met.

HOLDING:

The country of origin of the comforters and pillows in Scenario A is Mexico. The Scenario A comforters and pillows 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.

If the producer in Mexico opts to identify the “self-produced material” (the comforter and pillow shells) in Scenario B as a non-originating material, the country of origin of the finished comforters and pillows is Mexico and they will be entitled to the NAFTA “MX” duty rate of Free upon compliance with all applicable laws, regulations and agreements. The comforters and pillows would not be subject to quota or visa restrictions.

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.

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 John Hansen at 646-733-3043.

Sincerely,

Robert B. Swierupski
Director,

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