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NY L89272




January 19, 2006

CLA2-RR:NC:TA:349 L89272

CATEGORY: CLASSIFICATION

Ms. Sophia Spoltore
Milgram Freight Services Limited
407 McGill Street, Suite 700
Montréal (Québec) Canada, H2Y 2G3

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for mattress pads; General Note 12; Appendix to Part 181, Part II, Section 4(8); Self Produced Materials; 19 CFR 102.21(c)(4); most important assembly or manufacturing process; NAFTA Preference Override; Article 509

Dear Ms. Spoltore:

This is in reply to your letter dated December 19, 2005, requesting a classification, status under the NAFTA and country of origin determination for mattress pads which will be imported into the United States. This request is made on behalf of Marimac.

FACTS:

The subject merchandise consists of mattress pads. You submitted a piece of quilted fabric and a sample of the finished mattress pad. The pads have a quilted main panel and an elasticized fabric skirt. The main panel is composed of two outer layers made from 65 percent polyester and 35 percent cotton woven fabrics and a middle layer made from a polyester batting fabric. The three layers are quilted together. The skirt, which secures the pad to the mattress, is made from the 65 percent polyester and 35 percent cotton woven fabric. The mattress pads will be made in various bedding sizes. The manufacturing operations for the mattress pads are as follows:

CHINA or PAKISTAN:
-polyester/cotton fabrics are woven.
-fabrics are shipped to Canada.

SOUTH KOREA:
-polyester fibers are formed.
-fibers are shipped to Canada.

CANADA:
-polyester fibers are formed into a nonwoven batting. -polyester/cotton fabrics and batting fabric are sewn together forming a quilted fabric.
-quilted fabric is cut to the required size for the main panel. -poly/cotton fabric is cut to size for the skirt panel. -an elastic strip is sewn to the edge of skirt panel and the ends of the panel are sewn together.
-quilted main panel and elasticized skirt panel are sewn together. -mattress pad is packaged and shipped.

For the purpose of this ruling, it is assumed that the polyester/cotton fabrics used for the main panel and the skirt will be sourced in the same country.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the mattress pads will be 9404.90.9522, Harmonized Tariff Schedule of the United States (HTSUS), 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.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

The mattress pads fall within textile category designation 666. 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:

The mattress pads undergo processing operations in Canada. Canada is a country provided for under the North American Free Trade Agreement. This product will be eligible for the NAFTA preference if it qualifies to be marked as a good of Canada and if it is 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, HTSUS. For heading 9404, HTSUS, 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 65/35 polyester and cotton woven fabrics for the main panel and skirt leaves China or Pakistan, they are classified in heading 5513, HTSUS, since you have indicated that the fabrics do not exceed 170 grams per square meter. As fabrics of headings 5513, HTSUS, are excepted from meeting the tariff change to subheading 9404.90, HTSUS, 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 quilted fabric and the elasticized skirt panel, which are manufactured in Canada prior to the completed mattress pads, are considered a “self-produced material.” On the basis of the foregoing, the producer of the mattress pads ("the good") has the option of identifying the quilted fabric and skirt panels ("the self-produced material") as non-originating materials. If this choice is made, the quilted fabric (classifiable under subheading 5811.00, HTSUS) and the skirt panels (classifiable under 6307.90, HTSUS, as a made up article) fall within tariff provisions that are not excepted by the tariff shift rule set forth in subdivision (t). Accordingly, the mattress pads would be deemed as undergoing the requisite change in tariff classification.

Pursuant to the analysis set forth above, the mattress pads qualify as an originating good. Accordingly, they will be entitled to the special "CA" rate of duty if they qualify to be marked as a good of Canada 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.

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 mattress pads 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 mattress pads are made from two fabrics (poly/cotton blended fabric and batting fabric). As the fabrics comprising the mattress pads 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 mattress pads are not knit and subheading 9404.90, HTSUS, 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). In the case of the subject mattress pad, it is our opinion that the fabric making process of the outer fabric shell constitutes the most important manufacturing process. Accordingly, the fabric making process in China or Pakistan, where the fabric for the outer shell of the mattress pad is formed, constitutes the most important manufacturing process and the country of origin of the subject mattress pad is China when the poly/cotton fabric is formed in China or Pakistan when the poly/cotton fabric is formed in Pakistan

However, the mattress pads 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.

Assuming that the producer opts to identify the quilted fabric and skirt panels as a "self-produced material," the mattress pads qualify as a NAFTA originating good and applying the terms of Section 102.19(a), the country of origin of the mattress pads is Canada. They will be entitled to the special "CA" duty rate, provided that all other requirements of the NAFTA are met.

HOLDING:

If the producer in Canada opts to identify the “self-produced material” (the quilted fabric and skirt panels) as a non-originating material, the country of origin of the finished mattress pads is Canada and they will be entitled to the NAFTA “CA” duty rate of Free upon compliance with all applicable laws, regulations and agreements.

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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