United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2007 NY Rulings > NY N004142 - NY N004196 > NY N004158

Previous Ruling Next Ruling
NY N004158





December 26, 2006

CLA-2-RR:NC:TA:349

CATEGORY: CLASSIFICATION

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

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for a bed-in-a-bag set; 19 CFR 102.21(d); sets; 19 CFR 102.21(c)(1); wholly obtained or produced in a single country; 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.21(c)(4); most important assembly or manufacturing process; 19 CFR 102.19(a); NAFTA Preference Override; Article 509

Dear Ms. Polito:

This is in reply to your letter dated December 1, 2006, requesting a classification, status under the NAFTA and country of origin determination for a bed-in-a-bag set, which will be imported into the United States. This request is made on behalf of WestPoint Home, Inc.

FACTS:

The subject merchandise consists of a bed-in-a-bag set. A sample of the set was not submitted. The bed-in-a-bag set contains a comforter, bed skirt, flat sheet, fitted sheet and pillowcases. The outer shell of the comforter, the bed skirt, sheet and pillowcases will be made from 60 percent cotton and 40 percent polyester woven fabric. The comforter will be stuffed with a polyester batting. The comforter may or may not contain embroidery, lace, braid, edging, trimming, piping or appliqué work. The components of the set are packed together for retail sale. The manufacturing operations for the bed-in-a-bag set are as follows:

PAKISTAN:
-fabric is woven, dyed and finished.
-fabric is cut to size and shape.
-components are sewn on 3 sides creating the comforter shell. -components are sewn creating the finished shams, bed skirt, sheets and pillowcases.
-comforter shell, shams, bed skirt, sheets and pillowcases are shipped to Mexico.

MEXICO:
-polyester batting fabric is formed .
-batting is cut to size and stuffed into the comforter shell. -comforter is sewn closed.
-comforter, shams, bed skirt, sheets and pillowcases are packed for retail sale and shipped.

ISSUE:

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

CLASSIFICATION:

Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

The comforter is classifiable in subheading 9404.90 as articles of bedding and similar furnishing that are stuffed or fitted. The fitted sheet, flat sheet and pillowcases are classifiable in heading 6302 as bed linen, the bed skirt is classifiable under the provision for curtain and bed valances in heading 6303 and the pillow sham under the provision for other furnishing articles in 6304. Since classification of the submitted merchandise in a single heading cannot be determined by applying GRI 1, we must apply the other GRI's.

GRI 3 provides for goods that are, prima facie, classifiable in two or more headings. GRI 3(b) provides that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. According to the Explanatory Notes, the official interpretation of the HTSUS at the international level, “goods put up in sets for retail sale” refers to goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings; (b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking.

The bed-in-a-bag set meets 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 comforter is the component that gives the set its essential character.

The applicable subheading for the bed-in-a-bag set that contains a non-decorated comforter will be 9404.90.8020, HTSUS, 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: 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 duty rate will be 4.4 percent ad valorem.

The applicable subheading for the bed-in-a-bag set that contains a decorated comforter will be 9404.90.8505, HTSUS, that 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: other: quilts, eiderdowns, comforters and similar articles with outer shell of cotton. The duty rate will be 12.8 percent ad valorem.

NAFTA ELIGIBILITY:

The comforter undergoes processing operations in Mexico. Additionally, the comforter is packaged with a sham, bed skirt, sheets and pillowcases 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, HTSUS. In addition, all of the components of the two sets, not just the item that imparts the essential character to the set, must meet the terms of General Note 12(b). 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 non-originating comforter shell from Pakistan enters Mexico, it is classified in heading 6307, HTSUS. As heading 6307, HTSUS is not excepted by subdivision (t), the merchandise undergoes the requisite change in tariff classification and the comforters qualify for the NAFTA preference.

The bed skirt, pillow sham, sheets and pillowcases are finished products when they leave Pakistan and are imported into Mexico. The bed skirt is classifiable under heading 6303, HTSUS, the pillow sham is classifiable under heading 6304, HTSUS, and the sheets and pillowcases under heading 6302, HTSUS. As none of these headings are excepted by subdivision (t), each of these items undergoes the requisite change in tariff classification and they qualify for NAFTA preference.

The fact that the bed skirt, pillow sham, sheets and pillowcases are merely packaged together with the originating comforter in Mexico does not disqualify the bed-in-a-bag set from being considered as originating goods. The issue was addressed in Headquarters Ruling letter (HQ) 561326, dated April, 26, 1999. In that ruling, Customs and Border Protection explained that there is no language in General Note 12, HTSUS, which would disqualify a good from obtaining originating status by virtue of merely having undergone simple packaging or combining operations. Thus, non-originating items may undergo the requisite tariff shift under General Note 12 (t), HTSUS, when packaged in Mexico with originating items.

Pursuant to the analysis set forth above, all of the items in the bed-in-a-bag set qualify as originating goods. 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.

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 bed-in-a-bag set, as per an essential character determination, is based on the comforter, 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." The bed skirt, pillow sham, sheets and pillowcases were wholly obtained or produced in Pakistan. Thus the country of origin initially appears to be Pakistan for those items. Since the comforter was not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable for those items.

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 9404.90.85 is included in (e)(2) however, goods classified in that subheading which consist of blends containing 16 percent or more by weight of cotton are excepted. As the fabrics comprising the comforter 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 comforter is 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 comforters, the fabric making process of the outer shell constitutes the most important manufacturing process. The outer shell of the comforter is made from fabrics formed in a single country. Accordingly, the fabric making process in Pakistan, where the fabric for the outer shell is formed, constitutes the most important manufacturing process and the country of origin for the comforters is Pakistan.

However, the bed-in-a-bag set qualifies 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.

We have previously determined that the items in the bed-in-a-bag set are "originating" for purposes of the NAFTA preference rule applicable to the sets. It is the belief of Customs and Border Protection that Section 102.19(a) operates as an override for all of the items in the set and that all of the items are entitled to be marked as country of origin Mexico. Although packing is considered a non-qualifying operation under Section 102.17, the assembly of the comforter in Mexico meets the requirement that the good underwent production other than minor processing. Customs and Border Protection has previously stated that as long as one item in the set undergoes production other than minor processing, the remaining items in the set will receive the benefit of the NAFTA override. See HQ 559421, dated September 16, 1996; HQ 560577, dated August 4, 1997; HQ 560456, dated September 26, 1997; and HQ 560992, dated July 6, 1998. Thus, each item in the bed-in-a-bag set qualifies to be marked as country of origin Mexico.

As each item in the bed-in-a-bag set has been found to be originating and qualifies to be marked Mexico, the bed-in-a-bag set is entitled to the special "MX" duty rate, provided that all other requirements of the NAFTA are met.

HOLDING:

The country of origin of the bed-in-a-bag set is Mexico. The bed-in-a-bag set will be entitled to the NAFTA “MX” duty rate of Free upon compliance with all applicable laws, regulations and agreements.

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,

Previous Ruling Next Ruling

See also: