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NY M84201




June 26, 2006

CLA-2-RR:NC:TA:349 M84201

CATEGORY: CLASSIFICATION

Mr. Barry E. Cohen
Crowell & Moring LLP
1001 Pennsylvania Ave., NW
Washington, D.C. 20004-2595

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for table linen; General Note 12(b)(iii); 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.19(b); NAFTA Preference Override; Article 509

Dear Mr. Cohen:

This is in reply to your letter dated May 23, 2006, requesting a classification, status under the NAFTA and country of origin determination for table linen which will be imported into the United States. The request is made on behalf of Milliken & Company.

FACTS:

The subject merchandise consists of table linen. A sample was not submitted. The linens will be made from man-made fiber woven fabric. The table linen may be dyed but it will not be both printed and dyed. The manufacturing operations are as follows:

NON-NAFTA COUNTRY:
-polyester fiber is extruded and cut.
-polyester staple fibers are shipped to the United States.

UNITED STATES:
-synthetic filament is extruded (stated to be U.S. origin). -filament and foreign polyester fibers are spun into a yarn. -yarn is woven into a fabric.
-fabric is shipped to Mexico.

MEXICO:
-fabric is cut and sewn to form the table linen. -linens are packed and shipped.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the table linen will be 6302.53.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for bed linen, table linen, toilet linen and kitchen linen: other table linen: of man-made fibers. The general rate of duty will be 11.3 percent ad valorem.

The table linen falls 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 table linen undergoes processing operations in the United States and Mexico which are countries provided for under the North American Free Trade Agreement. General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials;

The table linen at issue will be eligible for the NAFTA preference if they qualify to be marked as a good of Mexico and if they are transformed in Mexico so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUS. For heading 6302, HTSUS, subdivision (t), Chapter 63, rule 1, 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 6002, 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 the polyester staple fibers leave the unspecified non-NAFTA country they are classified in subheading 5503.20, HTSUS. As products of chapter 55, HTSUS, are excepted from meeting the tariff change to heading 6302, HTSUS, it would initially appear that the non-originating material from the unspecified non-NAFTA country does not undergo the requisite change in tariff classification. It is noted however, that the staple fibers from the non-NAFTA country are spun into a yarn with originating synthetic filaments and woven into a fabric in the United States. The man-made fiber yarn is classified in heading 5509, HTSUS, while the fabric is classified in subheading 5515.12, HTSUS. For heading 5515, HTSUS, the appropriate subdivision (t) Change in Tariff Classification Rules states that:

A change to headings 5512 through 5516 from any heading outside that group, except from headings 5106 through 5110, 5205 through 5206, 5401 through 5404 or 5509 through 5510.

As heading 5503, HTSUS is not excepted by subdivision (t), the non-originating staple fibers undergo the requisite change in tariff classification and the woven fabric qualifies as an originating material. The table linen is made exclusively from originating materials and following General Note 12(b)(iii), HTSUS, qualify for the NAFTA preference. 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

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.

Subheading 6302.53 is included in paragraph (e)(2) exception to the above tariff shift rule. Paragraph (e)(2)(i) is not applicable as the fabric comprising the table linen is not dyed and printed. Paragraph (e)(2)(ii) states that "If the country of origin cannot be determined under (i) above, 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." As the fabric comprising the table linen is formed in a single country, that is, the United States, per the terms of the tariff shift requirement, country of origin is conferred in the United States.

However, the sheet sets qualify as a NAFTA originating good. As stated in Section 102.19(b):

If, under any provision of this part, the country of origin of a good which is originating within the meaning of § 181.1(q) of this chapter is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.

Based on the facts presented, the linens are an originating good under NAFTA and have been determined under section 102.21(c)(2) to be a good of U.S. origin. Because the articles were returned to the U.S. after having been advanced in value or improved in condition in Mexico by virtue of cutting and sewing into finished table linen, the country of origin of the table linen for Customs duty purposes is Mexico, pursuant to Section 102.19(b). Accordingly, the “MX” NAFTA rate will be applicable to the table linen.

As the origin of the table linen for the purposes of marking has been determined to be the United States, the linens are not required to be marked as a foreign article for the purposes of 19 U.S.C. 1304. However, separate Federal Trade Commission marking requirements exist regarding country of origin, fiber content and other information that must appear on many textile items. For more information on the applicability of the requirements under the Textile Fiber Products Identification Act (TFPIA), you should contact the Federal Trade Commission, Textile Program, Division of Enforcement, Bureau of Consumer Protection, 600 Pennsylvania Avenue, N.W., Washington, D.C., 20580.

HOLDING:

The country of origin of the table linen is the United States for marking purposes. By virtue of the NAFTA override in 19 CFR 102.19(b), the country of origin of the table linen is Mexico for duty purposes and they are entitled to the NAFTA “MX” special duty rate of Free upon compliance with all applicable laws, regulations and agreements. The linens are not subject to the marking requirements of 19 U.S.C. 1304.

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.

Sincerely,

Robert B. Swierupski
Director,

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