CLA-2: CO:R:C:T 956423 PR

Mr. Mervyn Taub
Advanced Apparel Associates
51 Magazine Street
Bedford, NH 03110 -4810

Re: Reconsideration of NY 896271 Concerning the Applicability of NAFTA to Men's Jackets

Dear Mr. Taub:

This is in reply to your letter of May 9, 1994, in which you requested that we reconsider the portion of New York Ruling Letter (NY) 896271 which concerned the applicability of the North American Free Trade Agreement (NAFTA). Our ruling on that matter follows.

FACTS:

According to NY 896271, the garment in question is man's jacket with an outer shell of 100 percent cotton denim fabric and is classifiable in subheading 6201.92, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). When imported, it will consist of 98 percent United States fabric. The remaining two percent is a cotton flannel fabric from Taiwan. Both fabrics will be cut and assembled into the garment in Mexico. The cotton flannel fabric is used as a lining for the yoke.

In NY 896271, the goods were classified it was stated:

The merchandise does not qualify for preferential treatment under the NAFTA because one of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 12(t)/62.1(B), HTSUSA. The material which comprises the visible lining is cut from Taiwanese fabric. -2-

ISSUE:

It is your belief that the de minimis rule contained in General Note 12(f)(vi), HTSUSA, is applicable to the subject garment and, therefore, the New York ruling erroneously applied General Note 12(t)/62.1(B), HTSUSA. Accordingly, you contend that the subject garment is entitled to preferential tariff treatment under the NAFTA.

LAW AND ANALYSIS:

General Note 12(b), HTSUSA, provides, in pertinent part:

(b) 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-- * * * (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 * * *

As the inquirer has correctly pointed out, General Note 12(t)/62.1(B), HTSUSA, is applicable to goods classifiable in subheadings 6201.11 through 6201.13, HTSUSA, not to goods classifiable under subheading 6201.92, HTSUSA. General Note 12(t)/62.3(B), HTSUSA, is the note that should have been cited since that is the note which is applicable to goods classifiable in subheading 6201.92, The tariff shift rule in that note provides, in pertinent part:

3. A change to subheadings 6201.91 through 6201.93 from any other chapter, except from . . . 5204 through 5212, . . . provided that: * * * (B) the visible lining fabric listed in chapter rule 1 for chapter 62 satisfies the tariff change requirements provided therein. -3-

Chapter rule 1 for chapter 62 provides, in pertinent part:

A change to any of the following headings or subheadings for visible lining fabrics:

. . . 5208.31 through 5208.59, 5209.31 through 5209.59, 5210.31 through 5210.59, 5211.31 through 5211.59, 5212.13 through 5212.15, 5212.23 through 5212.25 . . . from any other heading outside [sic] that group.

In view of the specific reference in NY 896271 to General Note 12(t)/62.1(B), and the conclusion in that rule that the goods did not qualify for preferential treatment under the NAFTA, we assume that the cotton fabric from Taiwan is classifiable under one of the subheadings mentioned in rule 1 to chapter 62. We also note that the request for reconsideration does not contain any information which would indicate otherwise.

The request for reconsideration hinges on the applicability of the de minimis rule contained in General Note 12(f), HTSUSA. That note provides, in pertinent part:

(i) Except as provided in subdivision (f)(iii) through (vi) . . . * * * (vi) A good provided for in chapters 50 through 63, inclusive, of this schedule that does not originate because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification, provided for in subdivisions (r), (s) and (t) of this note, shall nonetheless be considered to originate if the total weight of all such fibers or yarns in that component is not more than 7 percent of the total weight of that component. (underscoring added)

Under the instant factual situation, the goods in question do not qualify for preferential tariff treatment under the NAFTA for two reasons--(1)the cotton fabric from Taiwan does not meet the requisite tariff shift rule contained in General Note 12(t)/62.3(B); and (2) since lining fabrics do not determine the tariff classification of the good, the de minimis rule is not applicable to the subject goods. -4-

HOLDING:

The holding in NY 896271 concerning the applicability of preferential tariff treatment under the NAFTA to the instant goods is affirmed.


Sincerely,

John Durant, Director
Commercial Rulings Division