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NY N023632




March 3, 2008

CLA-2-63:OT:RR:E:NC:TA:349

CATEGORY: CLASSIFICATION

TARIFF NO.: 6302.60.0020; 6302.60.0030

Mr. Maurice J. Deslauriers
Norman G. Jensen, Inc.
199 East Orvis Street, Suite 2
Massena, NY 13662

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of cotton terry towels and facecloths from Canada; Article 509

Dear Mr. Deslauriers:

In your letter dated February 21, 2008 you requested a ruling on the status of cotton terry towels and facecloths from Canada under the NAFTA. This request is made on behalf of Cambridge Towel.

The subject merchandise consists of towels and facecloths or washcloths. Samples were not submitted. They are made from 100 percent cotton terry fabric. You have described two manufacturing scenarios. In the “fiber” scenario, cotton fibers from Egypt are shipped to the United States where they are spun into a yarn. The yarn is exported to Canada, woven into a terry fabric and cut and sewn to form the towels and facecloths. They are then exported to the United States. In the “yarn” scenario, cotton fibers are spun into a yarn in Egypt and shipped to Canada. The yarn is woven into a terry fabric, cut and sewn to form towels and facecloths and exported to the United States.

The applicable tariff provision for the towels will be 6302.60.0020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for bed linen, table linen, toilet linen and kitchen linen: toilet linen and kitchen linen of terry toweling or similar terry fabrics, of cotton... towels: other. The general rate of duty will be 9.1 percent ad valorem.

The applicable tariff provision for the facecloths will be 6302.60.0030, HTSUS, which provides for bed linen, table linen, toilet linen and kitchen linen: toilet linen and kitchen linen of terry toweling or similar terry fabrics, of cotton... other. The general rate of duty will be 9.1 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 towels fall within textile category 363 and the facecloths fall within textile category 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 With the exception of certain products of China, quota/visa requirements are no longer applicable for merchandise which is the product of World Trade Organization (WTO) member countries.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.

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;

Based on the facts provided, the goods described in the “fiber” scenario qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). For subsection 6302.60, HTSUS, the appropriate subdivision (t) change in tariff classification rule requires:

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 exported from Egypt the cotton fibers are classifiable in heading 5201 or 5203 depending on whether the cotton is or is not carded or combed. Those fibers are transformed within the NAFTA territories into terry fabric and then into towels and facecloths. The “fiber” scenario goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

The “yarn” scenario merchandise does not qualify for preferential treatment under the NAFTA because none of the above requirements are met. When exported from Egypt the cotton yarns are classifiable under heading 5205, HTSUS. As yarns of that heading are excepted from meeting the tariff change to heading 6302, HTSUS, the non-originating material from Egypt does not undergo the requisite change in tariff classification.

However, the “yarn” scenario towels and facecloths may be subject to a reduced rate of duty based upon the Tariff Preference Levels (TPL) established in Section XI, Additional U.S. Note 4(a), up to the annual quantities specified in subdivision (c) of Note 4. Upon completion of the required documentation and up to the specified annual quantities, the “yarn” scenario towels and facecloths may be eligible for the preferential rate of Free.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

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.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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