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NY N018529





October 26, 2007

CLA-2-OT:RR:E:NC:TA:349

CATEGORY: CLASSIFICATION

Mr. Glen C. Greenwood
Maholi Inc.
42 Hollinger Rd.
Toronto, M4B 3G6
Canada

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for comforters, featherbeds 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 Mr. Greenwood:

This is in reply to your letter dated October 15, 2007, requesting a classification, status under the NAFTA and country of origin determination for comforters, featherbeds and pillows which will be imported into the United States.

FACTS:

The subject merchandise consists of comforters, featherbeds and pillows. Samples were not submitted. The outer shells of the comforters, featherbeds and pillows will be made from 100 percent cotton woven fabric. They will be stuffed with white goose down, down/feather blend or white goose feathers. The comforters and featherbeds will contain piping that does not exceed 6.35 millimeters. You have described two manufacturing scenarios for these products. The manufacturing operations for the comforters, featherbeds and pillows are as follows:

Scenario A
CHINA OR TAIWAN:
-cotton fabric is woven and finished.
-fabric is cut to size and shape.
-components are sewn creating comforter, featherbed and pillow shells -shells, down and feathers are shipped to Canada.

CANADA:
-down, down/feather blend or feathers are stuffed into the various shells. -shells are sewn closed and finished.
-comforters, featherbeds and pillows are packed and shipped.

Scenario B
CHINA OR TAIWAN:
-cotton fabric is woven and finished.
-fabric, down and feathers are shipped to Canada.

CANADA:
-fabric is cut to size and shape.
-components are sewn creating comforter, featherbed and pillow shells -down, down/feather blend or feathers are stuffed into the various shells. -shells are sewn closed and finished.
-comforters, featherbeds and pillows are packed and shipped.

ISSUE:

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

CLASSIFICATION:

In your letter you suggest that the comforters and featherbeds should be classified under subheading 9404.90.80, HTSUS, as articles of bedding and similar furnishings, of cotton. The courts (Pillow Tex Corp. v. U.S. Slip-Op 97-146, affirmed in USCAFC Slip-Op 98-1227) have determined that the essential character of a down-filled cotton comforter was the down filling rather than the cotton shell. It is also the belief of Customs and Border Protection (CBP) that pursuant to that decision, the essential character of a feather-filled featherbed is the feather filling.

The applicable subheading for the down filled cotton comforters will be 9404.90.8505, 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 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 feather filled cotton featherbeds will be 9404.90.9505, 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: other with outer shell of cotton. The general rate of duty will be 7.3 percent ad valorem.

The applicable subheading for the cotton pillows will be 9404.90.1000, 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: pillows, cushions and similar furnishings: of cotton. The general rate of duty will be 5.3 percent ad valorem.

The comforters fall within textile category designation 362. Featherbeds and pillows fall within textile category designation 369. With the exception of certain products of China, quota/visa requirements are no longer applicable for merchandise which is the product of World Trade Organization (WTO) member countries. Quota and visa requirements are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information on quota and visa requirements applicable to this merchandise, we suggest you check, close to the time of shipment, the “Textile Status Report for Absolute Quotas” which is available on our web site at www.cbp.gov. For current information regarding possible textile safeguard actions on goods from China and related issues, we refer you to the web site of the Office of Textiles and Apparel of the Department of Commerce at otexa.ita.doc.gov.

NAFTA ELIGIBILITY:

In both scenarios the comforters, featherbeds and pillows undergo processing operations in Canada. Canada 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 Canada and if they are 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 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, featherbed shells and pillow shells from Taiwan or China enter Canada, they are 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, featherbeds and pillows qualify for NAFTA preference.

In Scenario B when the cotton fabric leaves China or Taiwan, it is classified in heading 5208 or 5209, HTSUS, depending on the weight. As fabrics of those headings are excepted from meeting the tariff change to subheading 9404.90, HTSUS, it would initially appear that the non-originating material from China or Taiwan 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, featherbed and pillow shells, which are manufactured in Canada prior to the completed comforters, featherbeds and pillows, are considered a “self-produced material.” On the basis of the foregoing, the producer of the comforters, featherbeds 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, featherbed and pillow shells (classifiable under subheading 6307.90, HTSUS) 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, featherbeds and pillows under Scenario A and B 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 9404.90.10 is not included in the paragraph (e)(2) exception to the above tariff shift rule. In Scenario A and B the pillows are made from a fabric that was formed in a single country. As the fabric comprising the pillows is formed in a single country, that is, China when the fabric is woven in China and Taiwan when the fabric is woven in Taiwan, 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 Taiwan when the shell fabric is woven in Taiwan. Subheadings 9404.90.85 and 9404.90.95 are included in paragraph (e)(2) however, goods classified in those subheadings as of cotton or which consist of fiber blends containing 16 percent or more by weight cotton are excepted from paragraph (e)(2). The featherbeds and comforters are made from a fabric that was formed in a single country. As the fabric comprising the featherbeds and comforters is formed in a single country, that is, China when the fabric is woven in China and Taiwan when the fabric is woven in Taiwan, 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 Taiwan when the shell fabric is woven in Taiwan.

However, the comforters, featherbeds 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, featherbeds and pillows qualify as a NAFTA originating good, applying the terms of Section 102.19(a), the country of origin of the comforters, featherbeds and pillows is Canada. The comforters, featherbeds and 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, featherbeds and pillows in Scenario A is Canada. The Scenario A comforters, featherbeds and pillows will be entitled to the NAFTA “CA” duty rate of Free upon compliance with all applicable laws, regulations and agreements.

If the producer in Canada opts to identify the “self-produced material” (the comforter, featherbed and pillow shells) in Scenario B as a non-originating material, the country of origin of the finished comforters, featherbeds and pillows is Canada and they will be entitled to the NAFTA “CA” 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,

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